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US Dollar Unfazed by Trump’s WHO, China Announcements

May 29, 2020 at 19:21 by Andrew Moran

A rolled dollar bill with some banknotes on the backgroundThe US dollar was unfazed by President Donald Trump’s press conference on Friday. Global financial markets were on edge as many speculated drastic actions would be taken by the administration regarding China over trade and the situation in Hong Kong. Instead, the announcements were just confirmations of previous reports about his response to the World Health Organization (WHO) and Beijing.

Speaking on the Rose Garden, the president confirmed that he is terminating America’s relationship with the WHO over its mishandling of the coronavirus pandemic. He also spent the first portion of the news conference railing against China for “ripping off” the US for decades, partly blaming the previous administration for allowing it to happen.

He also stated that the US government would suspend entry of certain foreign nationals from China that his administration identifies as potential national security risks. Trump plans to protect American businesses from intellectual property theft, which he says has cost the private sector billions of dollars.

In response to its questionable national security laws that will bypass Hong Kong’s legislature, President Trump announced that the government would sanction Chinese and Hong Kong officials who “suppress Hong Kong’s freedom.”

The leading stock indexes fell throughout the press conference, but when it was learned that the announcements would not impact financial markets, equities rebounded and returned to green.

On the data front, the Bureau of Economic Analysis (BEA) reported that personal income rose 10.5% in April, up from -2.2% in March. The market had penciled in a decline of 6.5%. This is the biggest spike since the government started tracking this metric. Personal spending cratered 13.6% last month, down from -6.9% in March. The median estimate was -12.6%.

According to the US Census Bureau, wholesale inventories rose 0.4% in April, up from -1.1% in March.

The personal consumption expenditure (PCE) price index decreased 0.5% in April as the cost of goods and services fell 0.8%. The core PCE price index, which excludes food and energy, tumbled 0.4%.

The University of Michigan also released its final May readings: consumer expectations fell to 65.9, five-year inflation expectations rose to 2.7%, consumer sentiment jumped to 72.3, and current economic conditions surged to 82.3.

The US Dollar Index, which measures the greenback against a basket of currencies, dipped 0.07% to 98.31, from an opening of 98.38. The index is on track for a weekly plunge of 1.55%.

The USD/CAD currency pair rose 0.1% to 1.3779, from an opening of 1.3763, at 19:16 GMT on Friday. The EUR/USD climbed 0.14% to 1.1094, from an opening of 1.1077.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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