Trump's decision to fire James Comey - FBI Director has been met with suspicion from the currency markets. Investors will be keen to learn who will replace Comey before investing further in the US Dollar. The below GBP/USD exchange rate table shows the difference you could have received when trading between the high and low point of the last 30 days.
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Unless you were very busy yesterday you would have noticed that Trump has made the headlines once more by controversially choosing to fire the current Director of the FBI. The timing is awful. Comey was overseeing the current investigation of links between the Trump Campaign team and Russia. He had just testified to Congress a week ago over the subject stating that the investigation was ongoing. He even requested greater resources to conduct his investigation just two days ago. Without having a replacement lined up to assume his position there is a suspect atmosphere around this very sudden announcement.
It seems everyone was surprised by the development.
So far currency markets have been muted. There has been little trading on the US Dollar, with the difference in the high and the low on GBP/USD at around half a cent yesterday, markets are simply waiting for more information.
The key question is who will replace Comey? Bill Clinton went through a similar saga, but replaced the fired Director with a known Republican to show he was not trying to put a favourable stooge in power. If Trump replaces Comey with an associate of his, the whole situation will begin to completely stink.
This is when you will likely see a reaction from the currency markets. Until they know which direction this volatile Trump administration will take next, the markets should be fairly subdued.
Based on how the Trump administration has acted so far, my personal inclination is that Trump is unlikely to make a concession by appointing a political opponent to the post.
With current calls for independent investigations and the public uproar, will this inhibit focus on the Trump tax plan which financial markets are so keen to see passed?
Whilst it is difficult to second guess an administration of this nature, it seems that Trump’s actions have piled more risk onto anyone holding US Dollars. This situation is unlikely to produce a positive outcome significant enough to improve the Dollar’s value, and with the downside risk outlined above, US Dollar sellers may be wise to secure an exchange rate soon on 01494 725353 before this firing is fleshed out further.
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