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US dollar slumps broadly after Trump says currency "getting too strong"

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The US dollar slumped broadly on Thursday (April 13), falling to a five-month low against the yen, after US President Donald Trump helped accelerate its recent decline by saying the currency was too strong.

[TOKYO] The US dollar slumped broadly on Thursday, falling to a five-month low against the yen, after US President Donald Trump helped accelerate its recent decline by saying the currency was too strong.

The greenback took a heavy hit after Mr Trump told the Wall Street Journal that the US dollar "is getting too strong" and that he would prefer the Federal Reserve to keep interest rates low.

The comments were a fresh reminder of the president's protectionist trade rhetoric, which has been a source of concern for US dollar bulls. "Trump's comments came at a time when some had begun to think that perhaps the president was not as supportive of a weak US dollar as initially perceived," said Shin Kadota, senior strategist at Barclays in Tokyo. "But he reiterated his view that a strong currency hurts US competitiveness, adding fresh downward pressure on the US dollar." The US currency was a shade lower at 109.000 yen after stooping to a five-month low of 108.920.

It has shed 1.8 per cent against the yen so far this week, with the safe-haven Japanese currency already on a bullish footing because of a rise in geopolitical tensions.

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There are fresh concerns about the French presidential election and possible US military action against Syria and North Korea.

The euro was steady at US$1.0669, not far from a six-day high of US$1.0675 reached overnight.

The US dollar lost significant ground against the pound and Swiss franc as well, and as a result the US dollar index versus a basket of major currencies was down 0.6 per cent at 100.100 .

The Australian dollar was given some breathing room as the greenback slumped.

It was up 0.2 per cent at US$0.7542, pulling away from a three-month low of US$0.7473 plumbed the previous day when wide-spread risk aversion amid simmering geopolitical concerns took its toll on the Aussie.

The yield on the benchmark US 10-year Treasury note was at 2.244 per cent after touching 2.239 per cent overnight, its lowest in nearly five months.

REUTERS

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