Dollar weathers the storm despite Trump impeachment

David Hobart

The impeachment of Donald Trump appeared to pose little problem to the dollar in global trading over the course of yesterday and today.

The greenback was noted at 0.1% less than previously as trading got underway in London on Monday morning, suggesting that the historic vote in the House of Representatives has had little effect on the currency.

Trump has been charged with abuse of power and obstruction of congress, making him just the third president in history to be impeached.

However, the dollar’s relative support in the currency market stemmed from the fact that it is highly unlikely that he will be removed from office.

While the impeachment was brought about by the House of Representatives, which is controlled by the Democrats, the trial itself – and the power to remove Trump from office – will lie with the Republican-controlled Senate.

They are expected to exonerate him of the charges.

There was no clear impact on risk, with the Japanese yen – a currency that often rises when risk comes on the agenda – showing no moves compared to the dollar.

Elsewhere around the world, a key mover was the Swedish crown.

This currency was up by a fifth of a percentage point against the single European currency after the local central bank raised interest rates.

The decision of the Riksbank to do so was expected, but it was also significant given that it is one of the first central banks in the world to make a move out of negative interest rates.

There was also a rise on the cards for the Norwegian dollar as it prepared for a day centred around the monetary policy decision of the Norges Bank central bank.

This was widely predicted by analysts to remain firm at 1.5%.

The Australian dollar, meanwhile, saw a significant rise of two-fifths of a percentage point.

This came after the country’s economy received a boost in the form of lower unemployment.

This, in turn, appeared to fuel suggestions that interest rate cuts were off the cards.

The single European currency was celebrating some welcome relief from the bad economic news which has come out of Germany for most of the year.

A data release which showed that the bloc’s largest economy was enjoying a boost in its business morale was welcomed, and the euro went up by 0.2% as a result.

The coming week looks set to mostly hold a slowdown.

Major events with the potential to be market-moving, such as the Trump impeachment case and the British general election, are now well behind the markets.

Most major economies will slow down next week for the Christmas break.

One key event which is due to happen will be the release of an interest rate decision from the Bank of England, which is due at 12pm GMT today (Thursday).

It is widely expected that this will result in no change for the rate – although there are some predictions that two members of the Monetary Policy Committee might choose to vote in favour of a cut.

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David Hobart
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