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Donald Trump divisive policies continue to roil global stocks and US dollar

The US currency was recently trading  lower against the euro and the pound

Josie Cox
Business Editor
Tuesday 31 January 2017 10:20 GMT
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Mr Trump has fired the acting US attorney general after she told justice department lawyers not to defend his executive order banning entry for people from seven Muslim-majority countries.
Mr Trump has fired the acting US attorney general after she told justice department lawyers not to defend his executive order banning entry for people from seven Muslim-majority countries. (Saul Loeb/Getty)

The dollar remained under pressure and investors on edge on Tuesday, after US president Donald Trump fired acting US Attorney General Sally Yates in response to her publicly questioning whether his refugee and immigration ban was constitutional.

The US currency was recently trading slightly lower against the euro and the pound and around 0.3 per cent lower against Japan’s yen, which is broadly considered a relatively low-risk asset to hold during times of market uncertainty.

Wall Street opened lower on Tuesday as investors continue to watch political developments.

The Dow Jones industrial average shed 72 points or 0.35 per cent in early trading.

Jameel Ahmad, vice president of market research at FTXM, said in a note: "Although some of the selling momentum experienced yesterday throughout the stock markets has cooled down, the market headlines across the globe continue to be dominated by the executive order from Donald Trump to ban certain nationals from entering the United States."

Earlier, Japan's Nikkei stock index posted its largest daily decline since November. A strong yen tends to weigh on the Nikkei because of the many exporters listed in the index.

“We may only be 11 days into the first 100 days of the new Trump administration but one thing is becoming more apparent and that is that markets are going to be continually tested in the near term by the words and actions of President Trump,” said Craig Nicol, a credit analyst at Deutsche Bank.

Strategists at UniCredit wrote in a note that Mr Trump remains “a wild card”.

Major stock indexes on Wall Street, which had enjoyed a surge in the aftermath of Mr Trump’s election victory thanks to hopes that he would scale back regulation and slash taxes, suffered their biggest fall of the year on Monday.

Stocks in Europe were cautiously higher on Tuesday, having also fallen on Monday, buoyed by some solid corporate earnings from the likes of online retailer Ocado.

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