The Department of Justice has appointed former FBI head Robert Mueller to investigate whether Russia intervened during the 2016 presidential election. Recent reports from the US are indicating that the probability that Trump’s presidency will end this year is around 29% following the Russia leak scandal. Trump is now facing his biggest political crisis since taking office.
Opinion polls, conducted by Politico and Morning Consult, that were released on Wednesday showed that Trump’s approval rating has hit a new low of 42% with half of the registered voters disapproving of Trump’s performance as a president. Polls, conducted by Public Policy Polling, are showing 48% of All Americans and 81% of Hilary’s voters hope to see Trump’s presidency to end. With the lack of support from his own Republican Party, Trump’s political career and USD prospects become even more gloomy.
Following the firing of FBI director James Comey it was reported that the two candidates to replace him, Judge Merrick Garland and Senate John Cornyn, both showed no interests to take over the position.
The leak scandal hit USD and US stock markets, pushing safe havens up. The VIX index (volatility index) rallied more than 20% on Wednesday.
On Wednesday, the dollar index saw its fourth straight loss hitting a low of 97.30 (last seen November 9 2016). The Index has retraced around 2.22% from May 12 to 17. USD/JPY saw its biggest intra-day loss hitting a 3-week low of 110.51. EUR/USD saw its fourth straight gain hitting a high of 1.1171 (again last seen November 9 2016). Spot gold surged hitting a 2-and-a-half week high of $1263.
The Dow Jones index fell by 1.76%, hitting a low of 20591.80 & the S & P 500 index fell by 1.82%, hitting a low of 2353.33 (both lows not seen since April 21).
During the early European session, on Thursday, the dollar index saw a moderate rebound with bulls attempting to recover the 97.50 level. The disappointment with Trump’s administration, some soft economic data and profit-taking has resulted in USD has giving up almost all its post presidential gain.
Since Trump took office in January, apart from passing the new healthcare bill, there are hardly any other worthy achievements. Instead, most of his policies have caused substantial controversy and turmoil. In addition, lack of enough support from the Republican Party makes Trump’s political career and USD prospects even more gloomy.