Trump makes more big economic promises - AmpGFX

The research team at Amplifying Global FX Capital explains that the USD has retraced much of its gains since the Trump election on 8 November and some of this fall reflects lost confidence that Trump can deliver on his election rhetoric to cut taxes, boost infrastructure spending and engineer strong growth and employment with his America First policies.

Key Quotes

“The USD has also lost ground as global recovery has gained traction.  Capital appears to be flowing to a number of emerging markets as their growth prospects improve.  In a relative growth analysis, the USA no longer stands out as exhibiting the strongest or most stable growth outlook.”

“JPY and gold have benefited from some heightened political and geopolitical risks as the French election draws near and the US takes a more aggressive posture with Syria and North Korea.”

“President Trump himself said he thought the USD was too strong and liked the Fed’s low interest rate policy; contrasting with his pre-election criticism of Fed Chair Yellen for keeping rates low.”

“Brexit uncertainty may now be easing, and the French election may pave the way for EUR to strengthen, pointing to potential upside for GBP and EUR in the coming weeks.”

“The Fed’s urgency to raise rates may appear dampened by the softer CPI reading in March and modest Q1 growth indicators; even though survey data continue to point to a solid recovery in the USA.”

“Undeterred by setbacks and roadblocks in Congress, in a speech on Tuesday, President Trump continued to promise big policy strides, very soon; including tax cuts, infrastructure spending, and a healthcare bill.”

“The speech followed an executive order signing to review the H-1B visa program for skilled workers and direct Federal agencies to buy and hire American.  He did so in front of employers of manufacturing company at Snap-On Tools.”

“Such rhetoric earlier in his still short presidency might have given the USD and US equities a significant boost.  However, the market has become more skeptical and is more focused on results.”