US Dollar takes a pounding after GOP flops on healthcare

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The dollar on Tuesday  dropped to its lowest point on the dollar index, which measures U.S. currency against other currencies, since last September after the GOP healthcare bill aimed at replacing Obamacare lost the support of Republican Sens. Jerry Moran (Kan.) and Mike Lee (Utah) — two critical votes which now blocks the legislation and heightens doubts that Trump will reach his goal of repealing ObamaCare.

“The reform momentum of the Trump administration has received another blow,” said strategists at Morgan Stanley, led by Hans Redeker, in a note to clients.

“Clearly, anything that comes along at the moment just corroborates the market’s negative attitude on the dollar,” said Neil Mellor, senior FX strategist at Bank of New York Mellon in London. “There’s just not enough inflation at the moment. And anything like this (defeat for Trump) is liable to push it lower.”

The sinking dollar raises questions about the rest of President Trump’s economic agenda.

“It seems markets are losing confidence that President Trump will be able to deliver on his promised plans,” said FXTM strategist Hussein Sayed. “Six months in office, and with no major legislation signed into law, it seems that the “Art of the Deal” hasn’t worked so far in U.S. politics.”

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