Donald Trump is poised to sign off the US withdrawal from the Trans-Pacific Partnership (TPP), in his first major move since he took office at the White House at the end of last week.
According to a White House source cited by NBC, the US President will on Monday (23 January) sign an executive order to withdraw the US from the deal, which has never formally been ratified by Washington.
At his inauguration on Friday, Trump stressed the need for US businesses and consumers to put "America first" again, as the newly-elected president insisted the world's largest economy will look to manufacture goods within its borders, rather than abroad.
Repealing the TPP would be the first sign that Trump intends to deliver on his protectionist policies and would simultaneously represent the first significant major action on foreign policy. Throughout his electoral campaign, Trump fiercely criticised TPP – wherein Barack Obama was a firm supporter – claiming it was harmful to American workers and manufacturing.
Meanwhile, Trump has also signalled his intention of wanting to renegotiate the North American Free Trade Agreement (Nafta), which was ratified in 1994 and also includes Canada and Mexico.
"We will be starting negotiations having to do with Nafta," Trump said at a swearing-in ceremony for his top White House advisers. "We are going to start renegotiating on Nafta, on immigration and on security at the border."
"So far the new president has stoked protectionism but offered little detail on the good stuff – pro-growth infrastructure spending, stimulus," said Neil Wilson of ETX Capital.
"That's ensuring the dollar starts the week on the back foot, trading at its weakest since early December. We'll be looking for more details on spending and growth plans in the coming days, which could revive the long dollar trade."
FXTM research analyst Lukman Otunuga said: "The growing threat of Donald Trump's proposed fiscal stimulus failing to keep up with market expectations may ensure dollar weakness becomes a recurrent theme in the short term.
"While further dollar sell-offs may be expected as markets scale back on fiscal stimulus speculations, the prospects of higher US interest rates this year should limit losses in the medium to longer term."