Aussie dollar steady as Trump eyed

The local unit was steady in afternoon trade, despite market fixation on Trump’s forex comments.

The Trump administration cranked up the tension in currency markets overnight. Picture: istock

The Australian dollar was little changed in midafternoon trade on Wednesday, with attention focused on the White House and rising currency and trade concerns.

At 4pm (AEDT), the Australian dollar was at US75.60 cents, compared with US75.66c in late on Tuesday.

The Trump administration cranked up the tension in currency markets overnight with remarks suggesting Japan, China and Germany were benefiting from weaker currencies, comments that pushed the US dollar to two-month lows early on Wednesday.

“Every other country lives on devaluation,” President Donald Trump said at a meeting with US pharmaceutical executives. “They play the devaluation market and we sit there like a bunch of dummies.”

Separately, a US trade adviser told the Financial Times that Germany was using a “grossly undervalued” euro to gain an advantage over trading partners, including the US

The comments sent the greenback lower against the yen, euro and other rivals, and prompted responses from officials in Germany and Japan, who rebutted the claims.

News earlier in the week that the US had put in place a temporary travel ban for some countries also weighed on the US dollar.

“The Trump administration’s temporary travel ban and other rapid-fire executive actions suggest he will further inflame tensions with Middle East Muslim countries,” said Greg Gibbs, a currency market analyst at Denver-based Amp GFX.

Mr Gibbs said he believes the president is generating a sense of instability and distracting attention from more-productive reforms, with “the anti-trade message and antagonist approach to Mid-East Muslims, the EU, Mexico and China likely to be viewed as negative for global growth.”

Dow Jones newswires