Trump effect on USD, markets


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How to Trade President Trump

Delayed vote leaves investors in limbo

It’s been another mixed open for European stock indices this morning although overall there’s a slightly softer tone. It’s all been something of an anti-climax after yesterday’s anticipated House vote on repealing and replacing Obamacare was delayed. It’s unclear what may happen next although the president is pushing for the vote to take place today. Mr Trump has also said that without a vote he’ll move on to other issues and leave the controversial Affordable Care Act in place.

Why the House Health Care Vote Matters

The market is trying to figure out if the House vote on the bill to replace Obamacare will pass or fail. The bill itself isn't so much what's at stake. The market is increasingly viewing it as a test of Republican leadership. It's a barometer on whether Paul Ryan and Donald Trump can whip the House into supporting its agenda.

Key Trump PromiseEffect on StocksEffect on USDEffect on Gold
Increased fiscal spending/stimulus - Particularly on infrastructure and defenseBullish - Increased economic growth and industrial production help boost equity marketsBullish - Increased spending leads to higher inflation and interest rates, pushing up USDBearish - Higher growth, interest rates, US Dollar and stocks should weigh on Gold
Lower corporate taxes - Down to 15% from 35%Bullish - Lower taxes increase after-tax cash flow and earnings, and bring income back to USBullish - Economic growth through lower taxes and fiscal stimulus boost interest rates / USDBearish - Higher growth, interest rates, US Dollar and stocks should weigh on Gold
Financial deregulation - Repeal heavy regulations on Wall Street and corporate AmericaBullish - Fewer regulatory hurdles increase financial and banking activity, fostering business growthBullish - Increased financial activity leading to economic expansion should lift interest rates and USDBearish - Higher growth, interest rates, US Dollar and stocks should weigh on Gold
Increased job creation - Retain and create jobs in the USBullish - More jobs lead to higher spending, demand and increased business growthBullish - Better employment rate leads to hawkish Fed and higher interest rates / USDBearish - Higher growth, interest rates, US Dollar and stocks should weigh on Gold
Protectionist trade policies - Tariffs and restrictions on Mexican, Chinese imports and othersBearish - Restrictions on trade can create trade wars and backlash on US companies doing business abroadBullish against targeted EM currencies, Bearish overall if trade wars resultBullish if trade wars result, which could boost gold as a safe-haven currency alternative

Watch: Trump Trades from our Panel


Hot Takes on Trump Presidency

The Best Reasons to Buy Gold in the Age of Trump

Notwithstanding the strong demand for gold and silver globally, buying activity in the U.S. retail market for physical bullion has fallen noticeably in the wake of Donald Trump’s election victory. And retail selling in the U.S. has increased. The bullion markets have entered a new phase. The two terms of President Obama included the aftermath of the 2008 financial crisis, zero interest rate policy from the Federal Reserve, and...

Trump Rally To Trump Bubble

The Trump Rally is an extension of a broad market advancement that began roughly a year ago after a somewhat sever correction early last year (2016), that brought down major U.S. market averages approximately 15% on average. However, markets have been charging higher ever since. Most noticeably, gains have increased significantly since this latest stage of the boom higher that began 1 year ago. Since then, the S&P 500 is up 33%...

Event Risk and Trump’s Weak Dollar Policy

We think Trump will pursue a policy of weaker US dollar. Whether this will turn into direct policy, i.e.: announcing the end of US reserve status similar to Trump’s political hero Nixon taking the US off the gold standard in 1971, could be more clear by end of March. We see US dollar index testing the 96.00 level on unchanged policy. If confirmed that weaker dollar is the new policy of...


USD/MXN: The Trump Trade

Currently, USD/MXN is trading at 20.04, down -0.26% or (526)-pips on the day, having posted a daily high at 20.16 and low at 19.96. The American dollar vs. Mexican peso seems to somewhat 'hold horses' as the greenback recovered 2.58% during the last 3-consecutive trading sessions.

USD/MXN Best Spreads


Donald Trump, a billionaire real estate mogul billed as the ultimate outsider, aims to shake up the US political establishment, which could potentially cause extensive market volatility along the way. Going forward, Trump should have a substantial impact on various key financial markets such as US Dollar, Euro, Yen, Pound and other important currencies as well as stocks, commodities and bond markets.

Trump was the second major-party presidential nominee in American history whose experience comes principally from running a business (Wendell Willkie was the first). By getting elected, Trump became the first United States President without prior government or military experience, and the first without prior political experience since Dwight D. Eisenhower.

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