The next “Trump Dollar” is likely to be strong, at least in the short term – Commerzbank
|What will happen if Donald Trump is re-elected US President in November? Economists at Commerzbank analyze how the US Dollar (USD) could perform under a Trump presidency.
Making the Dollar great again?
The next ‘Trump Dollar’ is likely to be strong – at least in the short term. Sealing off foreign competition, deregulation, low taxes for companies and the rich: Trump's political agenda is likely to increase the profitability of capital invested in the US in many respects. And this should make the Dollar more desirable, i.e. more valuable.
In the long term, however, sealing off could lead to a loss of efficiency and thus to a weaker Dollar. The prospect of a strong Trump Dollar could also be disappointed if Trump does not content himself with publicly criticizing the Fed, as he did in his first term of office, but actually intervenes in Fed business. This would be very clearly USD-negative.
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