TRUMP'S TILLERSON TWEET: Often having differing views on policy, US President Donald Trump fired his secretary of state Rex Tillerson on Tuesday. Picture: REUTERS
TRUMP'S TILLERSON TWEET: Often having differing views on policy, US President Donald Trump fired his secretary of state Rex Tillerson on Tuesday. Picture: REUTERS

New York — US President Donald Trump’s high-profile ouster of secretary of state Rex Tillerson sent the US dollar down slightly on Tuesday, with crude oil falling after an initial jump.

Trump gave Tillerson the boot on Tuesday after a series of public rifts over policy on North Korea, Russia and Iran, and replaced his chief diplomat with loyalist CIA director Mike Pompeo.

His firing — the biggest shake-up of Trump’s cabinet since he took office in January 2017 — was announced by the president on Twitter.

Evercore ISI strategist Stan Shipley in New York called it "another sign of a problem in the Trump administration". The dollar index, which measures the greenback against a basket of major currencies, fell 0.28%, with the euro up 0.52% at $1.2396.

Crude oil initially jumped on the Tillerson news, with investors seeing signs that a deal on Iran’s nuclear programme could collapse, but the trend reversed later in the day.

MSCI’s gauge of stocks across the globe shed 0.06%, while the pan-European FTSEurofirst 300 stock index lost 0.94%.

Analysts were largely unmoved by the departure of Tillerson, the latest in a cavalcade of exits from Trump’s White House, and suggested its market impact could be short-lived. David Kotok, chairperson of money management firm Cumberland Advisors in Sarasota, Florida, said such turnover is "now regularly accepted for the markets ... I don’t think Tillerson out and a replacement is a shock to the market that lasts very much at all",

Separately, the US labour department announced its consumer price index (CPI) rose 0.2% in February, in line with economists’ expectations. The figures suggest the US Federal Reserve remains on track to raise interest rates at a gradual pace this year, which boosted some markets.

US crude fell 1.21% to $60.62 a barrel and Brent was at $64.57, down 0.59%. US treasuries retraced some early losses after choppy trading following the news on Tillerson. Benchmark 10-year notes last rose 4/32 in price to yield 2.8554%, from 2.87% late on Monday.

The consumer price data seemed to offset any negative impact of the Tillerson ouster on US stocks, with Wall Street seesawing slightly in morning trading.

The Dow Jones Industrial Average rose 11.13 points, or 0.04%, to 25,189.74, the S&P 500 lost 2.28 points, or 0.08%, to 2,780.74 and the Nasdaq Composite dropped 32.05 points, or 0.42%, to 7,556.28.

European stocks fell across the board, with some analysts suggesting Tillerson’s departure fueled concerns that extremists are gaining influence in Trump’s administration. Investec economist Philip Shaw pointed to fears that the move "will give the nationalists greater power within the White House over the globalists".

Emerging-market stocks rose 0.26%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.22% higher, while Japan’s Nikkei rose 0.66%.

Reuters