Analyst: Trump Policy Could Weaken Dollar's Cyclical Support

BlockBeats News, August 21st, Jill Hirzel of Insight Investment stated in a report that the U.S. dollar may weaken as Trump's policies have eroded the attractiveness of the U.S. exceptionalism and could lead to reduced capital inflows into the U.S. Hirzel said: "Policy uncertainty and a more aggressive 'America First' agenda may erode the cyclical support for the U.S. dollar, leading it into a sustained period of weakness." However, she also pointed out that investors should remain cautious when overly betting on the dollar's decline through short positions as growth outside the U.S. is expected to be at best tepid, and speculators may already hold significant short positions on the dollar. Furthermore, before signs of economic weakness concerning enough to worry policymakers emerge, real interest rates adjusted for inflation may still remain elevated. (FXStreet)