The increasing levels of volatility the Greenback has dished out this month continues to highlight how the currency remains entangled in a fierce tug of war between the Fed hawks and President Trump. Although it may be clear that Trump may want a weaker dollar to help U.S. exports become competitive on the global markets, the heightened expectations of a proposed expansionary fiscal plan which will be supportive of US growth may uplift the Greenback.
Stock markets were explosively volatile this week, with most areas sprinting into record levels as the mixture of stabilizing oil prices and improving economic data across the globe boosted risk appetite.
Global equity markets were set to end the week on a softer footing on Friday, after setting record highs in the previous two sessions, as investors looked for clarity on U.S. President Donald Trump's tax and trade policies.
The first three weeks of the Trump administration had not made much inroads on his pro-growth agenda, favouring instead an "America first" protectionism, which have weakened the U.S. dollar. His comments on Friday put the reflation trade back in focus. A faster pace of economic growth in the U.S. would be accompanied by higher interest rates as the Fed keeps the economy from overheating
The heightened political risks across the globe and persistent Trump uncertainties have sparked a sense of unease which continues to pressure the financial markets. Global stocks remain extremely volatile amid the jitters with gains potentially limited as the era of political uncertainty encourages investors to scatter away from riskier assets.