Less than a week has passed since the New York Times reported about the Comey memo, a report that sent EUR/USD higher. The former FBI Director noted Trump’s request to “let Flynn goâ€, an intervention into the FBI’s investigation against Trump’s first pick as the National Security Adviser.
And now, the Washington Post, the NYT’s big rival, brings a new scoop. According to the report, President Trump asked the Director of National Intelligence Daniel Coats and Michael Rogers, the Director of the National Security Agency to deny the existence of any kind of evidence of collusion between the Trump campaign and the Russians.
Both deemed the requests inappropriate and rejected the requests. The WP has various sources in the current and previous administrations. It is hard to know if Trump didn’t understand his moves were inappropriate or just did not care.
In any case, while Trump continues his trip abroad, the trouble continues chasing him. Robert Mueller, the special counsel, is investigating, and so is the Senate. The Senate committee asked Michael Flynn for documents related to the Russian collusion case and Flynn refused. He invoked the 5th amendment, avoiding a self-incrimination. This does not look good.
Comey is set to testify in front of the Senate committee next week. Trump is scheduled to return to Washington by then.
Trump scandals and the US dollar
The Comey memo sent stock markets down but they recovered quite quickly. This has not been the case for the US dollar. The case for the dollar rally stemmed from hopes for tax cuts and infrastructure spending. In turn, these would result in stronger growth, higher inflation, and an accelerated rate hikes.
If Trump remains embroiled in scandal, his agenda is stuck. This includes the fresh budget proposal presented while Trump is in the Middle East.
So with Trump on the defensive, the US dollar is likely to remain on the defensive as well.
