Following the recent developments connected with the investigation into Russia’s ties with the US presidential election and Trump’s failure to pass the health care bill in Congress for the second time, the uncertainty around Trump’s administration peaked on Friday after Sean Spicer, the White House press secretary, resigned from his role. The dollar saw little immediate reaction to the news on Friday but last week’s events weighed on the currency in forex markets today.
Sean Spicer announced on Friday his decision to leave the position of a press secretary at the White House, which he held for six months. The surprise resignation comes after Trump hired the former Wall Street financier and presidential fundraiser Antony Scaramucci as a director of the communication team. According to people who have an insight knowledge, Spicer refused to stay as secretary, expressing his opposition to the hiring as this would exacerbate uncertainty in the White House. Moreover, other sources suggest that further reshuffles in the media and legal teams have already taken place. Later in the day, Scaramucci, who addressed the daily briefing at the White House, named Sarah Huckabee Sanders as the new press secretary. Previously Sanders served as a deputy press secretary.
Regarding Scarammucci’s new responsibilities, he is said to help the White House develop strategies in an attempt to deal with the Russian scandal. Last week, Special Council Rober Muller who was recently appointed to run the investigation into Russian interference in the 2016 election, questioned for the first time the financial relations between Trump’s business and the Russian government, adding more confusion to the political turmoil. Besides that, on Saturday, Republican and Democrat leaders agreed on imposing additional sanctions on Russia as a punishment for its 2014 annexation of Crimea and its intervention in the US presidential election, putting Trump into a dilemma as any opposition to this would bring him into suspicion. The vote for the legislation, which also includes extra sanctions against Iran and North Korea, is due to take place on Tuesday.
With Trump’s inner-cycle appearing to be falling apart and the president himself facing numerous political obstacles, investors are now far from convinced that Trump’s administration will be able to deliver his promised economic agenda.
The latest troubles engulfing Trump drove the dollar to fresh lows in the forex markets. The dollar index hit a 13-month low of 93.82 earlier today, while against the yen, the greenback slid to a 5-week low of 110.60. Euro/dollar also touched fresh highs, rising to a 23-month top of $1.1684 and even the pound managed to post gains, rising back above the $1.30 level.
