#weak dollar

Trump spoke to reporters Friday as the Marine One chopper prepared to take him to Andrews Air Force Base, where he would depart for a trip to his golf courses in Scotland. A correspondent asked why the dollar had lost so much value and whether Trump was concerned.

A reporter knocked President Donald Trump off balance during a chaotic press briefing alongside an awaiting helicopter by pointing out that he'd attended the same business school as the president.

We are now experiencing the worst April for US stock markets since the Great Depression.

Trump Tariffs Send Stock Market Plummeting to Great Depression Levels

It’s a pretty bad sign when people start making comparisons to the Great Depression, right?  The Wall Street Journal reported Monday that after the Dow Jones Industrial Average shed nearly 1,000 points, it was “headed for its worst April performance since 1932.” But that wasn’t the only historically significant market drop.  The S&P 500, which has dropped 9 percent since Donald Trump announced his destabilizing “reciprocal tariff” policy earlier this month, has seen the worst performance since Inauguration Day for any president going back to 1928, according to Bespoke Investment Group. Also on Monday, the yield on a 10-year Treasury note rose to 4.89 percent, and the ICE U.S. dollar index—which measures the dollar against foreign currencies—sank more than 1 percent to its lowest level since March 2022. Typically when the market sinks, as it did during the Covid-19 pandemic, the dollar goes up and Treasury yields drop. Now the opposite is true—meaning that the costs of imported goods will be even higher than the boosted prices caused by Trump’s tariffs on nearly every country in the world. This also leaves investors with few safe spots to wait out the volatility caused by Trump’s tariffs.  “It’s the hallmark of the ‘no confidence’ trade,” Scott Ladner, chief investment officer at Horizon Investments, told the Journal. “It’s impossible to commit capital to an economy that is unstable and unknowable because of policy structure.” 

It's not good to have an economy which is seen as "unstable".

This is all because of Trump's asinine and irrational obsession with tariffs – tariff being another word for import tax.

The International Monetary Fund said Tuesday that Trump’s tariffs would slow growth, not only for the U.S. but globally.  The IMF’s chief economist, Pierre-Olivier Gourinchas, told reporters that the odds of a recession in the U.S. had increased from 25 percent in October 2024 to 40 percent. 

If you know somebody who voted for Trump and is now complaining about the direction of the US economy, you have an obligation to say: Well, you voted for all this.

Gold may have posted two straight months of declines, but is set to shrug off the blues and rise in 2019 as the dollar weakens.

The precious metal will start to rebound in the final quarter of this year to average $1,375 an ounce in the last three months of next year and could touch a high of $1,400, said Bart Melek, global head of commodity strategy at TD Securities in Toronto. That’s a level last seen in 2013.

Weighed down by the surging greenback, bullion has dropped about 5 percent since April 11 to trade around $1,293, shrugging off political turmoil in Italy and uncertainties surrounding global trade issues.

“As time moves on, there’ll be less and less reasons to get into the U.S. dollar, which will likely reverse some of the flows,” said Melek, who’s among speakers at a precious metals conference in Singapore this week. “We do ultimately think that as we move into 2019, the U.S. dollar will weaken, which is a very powerful fuel for the gold complex.”

The overall interest rate environment is expected to remain low as the Federal Reserve hikes another two or three times next year before ending its tightening cycle, said Melek by phone on May 31. This, coupled with fully valued equities, geopolitical risks, and a downward trend in mine supply, will see increasing pressure to buy gold, he added.

In the near term, there’s not a lot of reasons to think that gold will climb as the greenback continues to firm up, with the Fed expected to raise interest rates two more times this year, Melek said. Prices are seen averaging $1,290 in the third quarter and $1,300 in the final three months of 2018, he said.

A similar view is expressed by Nicholas Frappell, global general manager at Sydney-based ABC Bullion. In the short term, the stronger dollar is still a headwind and is going to “make life difficult” for gold, but the precious metal will end the year quite firmly, Frappell, who’s also addressing the conference, said in an interview on June 1.

“Looking forward, the conditions for the gold market look more positive as the dollar rally becomes more stale and fiscal factors start to erode the dollar’s strength,” he said, also adding that the tightening cycle may be coming to an end next year.

The post Why Gold May Hit $1,400 in 2019 appeared first on Bloomberg Businessweek Middle East.

(Reuters) - Wall Street was set to open higher on Friday as investors shrugged off weaker-than-expected U.S. economic growth data and focused on strong earnings from blue-chips and a slide in the dollar.