Trump and the US dollar - HSBC
|According to analysts at HSBC, US President Trump has been a key factor behind recent US dollar weakness. They warn that Trump’s desire for a weaker dollar will likely be undone by his policy mix, which is largely dollar positive.
Key Quotes:
“President Trump has broken with convention by talking the USD down. He has been a key factor behind the USD’s retreat in January. Trump’s policies so far have been consistent with Trump-failure, and he is yet to even get the ball rolling on his campaign promises consistent with Trump-flation. This means president is also likely to be the key element that re-starts the USD rally as his policy focus moves from executive orders on trade and immigration to the USD bullish theme of reflation through tax cuts, increased spending and deregulation.”
“The President may want a weaker USD but his campaign promises point in the opposite direction. January’s price action has not changed our view that the USD is set for a strong H1 16 before reversing lower in H2. January has simply been a taster of the reappraisal to come. For now, we expect the USD bulls to regain the upper hand.”
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