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Donald Trump wants negative interest rates. Rates in Europe just went to a record low, and this is the effect.
The European Central Bank's base rate has been negative since 2016. It cut a further 10 basis points to -0.5% and announced a fresh round of stimulus.
"We don't have a Tariff problem (we are reigning in bad and/or unfair players), we have a Fed problem," Trump said. "They don't have a clue!"
"We're starting to fear a Q2 GDP crash in Germany," says Pantheon Macroeconomics.
Trump’s right on the money: IMF finds the US dollar is overvalued, the Euro is undervalued for Germany
"Whilst Trump has never been the biggest fan of the IMF, he may very well be now!"
Trump just attacked Mario Draghi — accusing the European Central Bank chief of manipulating the euro
Draghi pledged stimulus if conditions don't improve. The lower euro is "making it unfairly easier for them to compete against the USA," Trump tweeted.
After weeks of wrangling, the two parties agreed to allow Italy to run a budget deficit of 2.04% next year. Stocks and the euro gained on the news.
The budget proposes increasing both Italy's overall government debt and its deficit in the short run, pushing the deficit as high as 2.4% of GDP over the coming years. This means Italy will fall foul of a previously mandated deficit level of 0.8% of GDP maximum.
One analyst said a pattern is starting to emerge showing "the president willing to talk the USD lower whenever it starts to look a bit toppy."
"The fears of a no-deal Brexit have piled the pressure on the pound and the dollar’s rally has come as a sucker punch," Neil Wilson, the chief market analyst at Markets.com, said in an email.
Sterling has hit a fresh 11-month low against the dollar on Thursday amid continued fears over the prospect of a 'no deal' Brexit.