Mason Dean Capital FOREX Blog

Mason Dean Capital FOREX Blog

The Trump Effect

The Trump Effect

Now that the election is over and Trump will be president in 15 days, we can focus on the implications of a Trump presidency. Donald Trump aims to shake up the US political establishment, which could potentially have a large effect on market volatility.

During 2017, the key economic policies set forth by Trump will have an 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 in the event of victory.

 

Dollar Effect

"Trump has repeatedly stated in public his position that the US Federal Reserve and Fed Chair Janet Yellen have been politically-motivated in keeping interest rates low. He has essentially accused the Fed of attempting to create false appearances of a healthy economy and stock market to embellish the Obama Administration. Trump has deemed the rising US equity markets as a “false stock market” that has been propped up by an overly accommodative Fed. This stance against what he sees as politically-driven dovishness provides a hint that if Trump gains the highest office in the land, he may be keen on instituting a more hawkish Fed. In that scenario, the possibility of higher interest rates going forward could lead to a stronger US dollar. In addition, Trump’s rhetoric on international trade issues has deemed his policy position as heavily protectionist. At least initially, this stance could lead to a further boost for the USD, especially against emerging market currencies like the Mexican peso and Chinese yuan." by James Chen 

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