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Dollar’s sluggish response to State of Union speech

Published: Thursday 01 February 2018

By Adrian Bishop

President Donald Trump declared there has never been a better time to start living the American dream, in last night’s State of the Union address.

But the response of the US Dollar has been far from a dream so far, with falls against most other currencies in early trading following the address.

Halo Financial founding director, David Johnson, says, “The State of the Union address contained an upbeat message on past achievements, but it seems the market wanted more detail on how the infrastructure spend might come together.”

A bullish Mr Trump told lawmakers on Capitol Hill, "This, in fact, is our new American moment.”

He went on to proclaim, “There has never been a better time to start living the American Dream. So, to every citizen watching at home tonight — no matter where you have been, or where you've come from — this is your time. If you work hard, if you believe in yourself, if you believe in America, then you can dream anything, you can be anything, and together, we can achieve absolutely anything."

In the 1 hour 20-minute address, the president hailed tax cuts, called for $1.5 trillion to be spent on infrastructure and road upgrades and proposed immigration reform. He offered to grant legal status to 1.8 million so-called Dreamers – those brought to the United States illegally as children – in return for $25 billion for the Mexico border wall and an immigration system more strongly based on merit.

In making the offer, he appealed for support from all parties. "Tonight, I am extending an open hand to work with members of both parties, Democrats and Republicans, to protect our citizens, of every background, colour and creed."

He asked lawmakers to "set aside our differences" and "summon the unity we need to deliver for the people," 

But in praising the elimination of the "disastrous Obamacare" and announcing that the Guantánamo Bay detention centre in Cuba would be kept open, overturning a cancellation order from previous president, Barack Obama, he drew displeasure from Democrats.

So, while some announcements brought Republicans to their feet, Democrats stayed stony-faced in their chairs and some booed.

While lauding achievements of the last year, the speech was relatively light on policy proposals. In addition, there was little mention of economic priorities for the next year that usually dominate the State of the Union address, although the president did emphasise the importance of defence spending.

In its reckless pursuit of nuclear missiles, “depraved” North Korea could very soon threaten the homeland, he warned.

“Past experience has taught us that complacency and concessions only invite aggression and provocation. I will not repeat the mistakes of past administrations that got us into this very dangerous position.”

He called for Congress to increase defence spending and added: “We must modernise and rebuild our nuclear arsenal, hopefully never having to use it, but making it so strong and powerful that it will deter any acts of aggression. Perhaps someday in the future there will be a magical moment when the countries of the world will get together to eliminate their nuclear weapons. Unfortunately, we are not there yet.”
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