Navigating Trump’s Trade Policies & FX Outlook

Trump & USD

The dollar is likely now in a bear-trend

Trump & G10 vs USD

G10 FX moves shows USD safe-haven doubts

1. US labour market cracks

US economy no longer as resilient

1. US economy risks

Uncertainty will weigh on activity

2. US Tariffs & Rates

Tariff action will see lower real yields

Hit to US confidence

Trump’s hand weakened by market turmoil

USD (III)

Investor confidence in “US Exceptionalism” has faded

3.Price Action

‘Triple selling’ points to further dollar selling

Scale of DXY selling also signals more selling

4.USD Policy?

‘Mar-a-Lago Accord’ & UST bond holdings

5. Europe & China respond

Policies to boost domestic demand

EUR inflows

Return to positive yields make EZ bonds more attractive

EUR potential

Rebounding from undervalued levels vs. USD

EUR long-term

Negative yields fuelled USD over-valuation

CNY & tariffs

USD/CNY stability the focus but upside risks persist

Asia FX & Tariffs

Heightened uncertainty fuelling higher FX volatility

JPY & risk

US recession will lead to stronger yen

FX Focus