Analysts at Bank of Tokyo Mitsubishi explained that optimistic policy expectations under Trump may not match reality.
"Current optimistic policy expectations will begin to face implementation risk in the year ahead. If plans for tax reform, infrastructure spending, and deregulation are scaled back when they are legislated for, it could trigger some reversal of the US dollar’s initial strong gains.
The tightening impact from the stronger US dollar and higher US yields could result as well in the US economy disappointing more upbeat expectations for growth in the year ahead thereby acting as a dampener on the current positive sentiment towards the US dollar."
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