Wells Fargo macro strategist Erik Nelson stated in a report that the bank's long USD/CAD trade recommendation was stopped out after a 0.4% decline, a move triggered by a sharp dollar sell-off following remarks from former President Donald Trump on Tuesday. The Bloomberg Dollar Spot Index plunged over 1% after Trump told reporters that the dollar was doing quite well. Wells Fargo had entered the trade at a level of 1.3680, targeting 1.3890, but the position was stopped out at 1.3620. Nelson had recommended the trade in a report on Monday, citing Trump's threats to impose tariffs on Canadian goods and uncertainty ahead of the USMCA review. According to Nelson's Tuesday report, Wells Fargo expects the dollar's decline to fade or reverse in the near term. "Trump has been publicly against Asian currency devaluation for decades," Nelson wrote, "We believe the more interesting developments would be an explicit change in US Treasury dollar policy and coordinated G-7 intervention, but neither appears to be on the table at the moment."
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Trump's Remarks Rattle Dollar, Triggering Wells Fargo's Stop-Loss on USD/CAD Trade
Deep News01-28
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