Posted inAnalysisUnited States

Is the Trump inspired dollar slide over already?

“We still expect the pound to display a short term rebound from what were oversold levels and a rebound nearer $1.30 remains a possibility,” Oliver added. “However, we still think pound will be structurally undermined by the Brexit process and can’t see it evidencing much longer term strength.  It is entirely possible that expectations of US interest rate rises will be pushed back, but it’s doubtful that this will persist and therefore it won’t be long before rate rises in the US are back on the table.”

Signia Wealth CIO Etienne de Merlis noted the implications for the Federal Reserve of a Trump win are yet to be fully factored in. “The impact on currency, that is the great unknown, sterling has hardly moved against the dollar and the range around it has not been very high, the euro, yesterday it closed at around 1.10. You have seen some limited reaction on currency, two things over the long term coming up soon, how that victory is going to influence the Fed, if at all. If it roils markets it will become less easy to hike rates. And, how it is impacted by trade deal changes. But it is too early to call that side of things.”

It seems a safe bet to say the Trumped dollar will not resemble the Brexit pound in its near-term movements, but that is not to say the only way is up for the greenback. 

Part of the Bonhill Group.