Donald Trump has been credited with the latest economic boom, with analyst suggesting his de-regulation and changes to the tax laws have helped free the US markets. President Trump was also not afraid to lay claim to his success of his Davos speech last week, along with his State of the Union address earlier this week.

Donald Trump, from the outset of his election campaign, aimed to increase US commerce. The recent decrease in value of the US Dollar has only helped to strengthen US business opportunities.

Moving forward the key question will be how much ground will the US Dollar give up? Against the Euro the USD has lost significant ground, with the exchange rate now sitting at over a 3 year high. In the last 10 years there has only been a few occasions where the rate has been above 1.35 and even though we’re currently a considerable distance from that point, there could be movements back towards that level should trends continue.

US Federal Reserve – changes at the top

Jerome Powell has now taken over the role of Chairman of the Federal Reserve with Janet Yellen stepping down after nearly a decade in charge. Mr Powell has said recently that he intends to continue in a similar direction as Janet Yellen had adopted, however there could always be a deviation at any moment in reaction to economic data or events.

The Federal Reserve aren’t expected to make any changes to the US interest Rate until the meeting in March. It is the expectation of many analysts that there will be a raise in rates at this point, which appears to have been factored into USD exchange rates.

This year there is expected to be three interest rate hikes and I would not be surprised for more if economic data continues to be positive and the US Dollar value decreases. Arguably this would only help the US economy to grow faster as exports would become cheaper and foreign investment could continue to increase. The stock market looks set to continue to gain, however if there was a collapse there could be a US Dollar exodus.