Since President Trump’s inauguration on Friday, the US Dollar continues to post losses against most major currencies including Pound Sterling. Sterling has made 4 cent gains against the US Dollar, as markets grow increasingly concerned towards the President’s economic plans.
Trump has not been shy to controversy, and it would appear from the numerous tweets daily and his protectionist, always isolationist stance, that markets fear a turn for the worse for the US economy.
Trumponomics doesn’t just affect the US, his decision to repeal from TPP will affect the Australian economy, as well as New Zealand, Japan and China, amongst others that rely on cross trade.
The controversy doesn’t quite end there, as the media were quick to highlight the President has signed a global abortion funding plan that will prevent US funding for organisations that offer abortion services. If you consider what the newly appointed President can achieve in one weekend, it’s unimaginable what he may achieve in 4 years in office.
Trump wanted a weaker US Dollar to help bolster US exports, it looks as though he may get his wish.
GBP/USD to strengthen on UK-US trade talks?
Following the announcement this morning from the Supreme Court hearing, Theresa May will not have the right to invoke Article 50 without Parliamentary consent. The decision was a non-mover but the Pound has further opportunities to gain against the Dollar.
May and Trump will meet this week to discuss the potential for a new trade deal, its unclear as to what this will entail, or whether such a trade deal could replace or at least replicate the current EU model. Markets remain hopeful that Trump’s admiration for the UK may pay off, and given Trump’s ability to get the job done as such, a new deal may take little time to put into action.
Further market movements around the Dollar are likely, and with no signs of Trump’s outlandish comments stopping, the US Dollar may err on the side of weakness.