Will the dollar rise or fall on a Trump victory?

YESTERDAY’s decline in the American stockmarket, on news of a narrowing in the poll gap between Hillary Clinton and Donald Trump (under two points according to Real Clear Politics), confirms the argument made in last week’s column. A combination of Mr Trump’s adverse policy proposals on trade, foreign policy and the Fed, and uncertainty about how much of this agenda would get through Congress, would hit equities hard were he to be elected.

But what about the dollar? The picture is far from clear. Over the last 24 hours, the US currency has lost ground against the Swiss franc, euro, yen and sterling but gained against emerging market currencies like the Mexican peso and Brazilian real. That makes some sense. A Trump victory would make international investors less confident about the direction of US economic policy. This in turn might lead to the Fed being less willing to tighten…Continue reading

from Business and finance http://www.economist.com/blogs/buttonwood/2016/11/currencies?fsrc=rss


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