The foreign exchange market, also known as the forex market, is the largest financial market in the world. It is estimated to have a daily turnover of around $5 trillion. Forex trading involves buying and selling currencies with the aim of making a profit. One of the factors that affect the forex market is the political climate. The actions and statements of political leaders can have a significant impact on the forex market. One such leader is the President of the United States, Donald Trump. Trump is known for his prolific use of Twitter, and his tweets can move the forex market significantly. In this article, we will explore how much the forex markets move every time Trump makes a tweet.
Trump’s tweets can move the forex market in two ways. First, his tweets can affect the value of the U.S. dollar. Second, his tweets can affect the value of other currencies. Let us examine these two scenarios in detail.
When Trump tweets about the U.S. dollar, it can have a significant impact on the forex market. For example, in July 2019, Trump tweeted that the U.S. dollar was too strong and that it was hurting American exports. This tweet caused the U.S. dollar to fall against other currencies. Similarly, in August 2019, Trump tweeted that the U.S. Federal Reserve should cut interest rates aggressively. This tweet caused the U.S. dollar to fall against other currencies.
When the U.S. dollar falls, other currencies appreciate against it. The degree to which other currencies appreciate depends on various factors such as the strength of the currency, the state of the economy, and the political climate of the country. For example, if the U.S. dollar falls against the Japanese yen, it means that the yen has appreciated against the U.S. dollar. The degree to which the yen appreciates depends on various factors such as the strength of the Japanese economy, the state of the Japanese stock market, and the political climate of Japan.
Apart from affecting the U.S. dollar, Trump’s tweets can also affect other currencies. For example, in July 2019, Trump tweeted that China was not living up to its promise of buying more American agricultural products. This tweet caused the Chinese yuan to fall against the U.S. dollar. Similarly, in August 2019, Trump tweeted that he would impose tariffs on all remaining Chinese imports. This tweet caused the Chinese yuan to fall against the U.S. dollar.
When a currency falls, it means that it has depreciated against other currencies. The degree to which a currency depreciates depends on various factors such as the strength of the currency, the state of the economy, and the political climate of the country. For example, if the Chinese yuan falls against the U.S. dollar, it means that the yuan has depreciated against the U.S. dollar. The degree to which the yuan depreciates depends on various factors such as the strength of the Chinese economy, the state of the Chinese stock market, and the political climate of China.
So, how much do forex markets move every time Trump makes a tweet? The answer is that it depends on various factors such as the content of the tweet, the time of the tweet, and the state of the forex market at the time of the tweet. However, we can look at some examples to get an idea of how much the forex markets move.
In August 2019, Trump tweeted that he would impose tariffs on all remaining Chinese imports. This tweet caused the Chinese yuan to fall by 0.7% against the U.S. dollar. In September 2019, Trump tweeted that the U.S. would increase tariffs on Chinese goods. This tweet caused the Chinese yuan to fall by 0.5% against the U.S. dollar. In October 2019, Trump tweeted that the U.S. and China were close to a trade deal. This tweet caused the Chinese yuan to rise by 0.5% against the U.S. dollar.
In conclusion, Trump’s tweets can have a significant impact on the forex market. They can affect the value of the U.S. dollar and other currencies. The degree to which the forex markets move every time Trump makes a tweet depends on various factors such as the content of the tweet, the time of the tweet, and the state of the forex market at the time of the tweet. While it is difficult to predict how much the forex markets will move every time Trump makes a tweet, it is clear that his tweets can cause significant volatility in the forex market.
