Is this the start of a dollar bull market?

Donald Trump’s election victory has pushed the US dollar higher – something that could last for at least the next few months, says Andrew Van Sickle.

In late 2015, most analysts forecast a stronger dollar in 2016. Not for the first time, most analysts were wrong. The greenback trod water, largely because the US Federal Reserve, originally expected to raise interest rates four times this year, has yet to shift them at all. But now it seems the dollar bull is back. The trade-weighted dollar, measured against a basket of major trading partners' currencies, has surged to a 13-year high. The greenback has also reached an eight-year high against the Chinese renminbi and a 12-month peak against the euro.

The markets appear to have "fallen in love with Trumponomics", says Hamish McRae on Independent.co.uk. The hope is that cuts in income tax and a huge reduction in corporation tax will juice growth. Easing financial and environmental regulations may also bolster corporate profits. Meanwhile, Trump plans a spending spree on infrastructure. All this implies more borrowing, so bond yields have climbed.

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Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.