The “Trump bump” seems to be turning into a light tap for the U.S. Dollar. It has lost all of its post-election gain, and is starting 2018 off on the wrong foot.
The dollar is trading at the lowest level in 3 years, and that follows a whopping 10% decline in 2017. Additionally, a heightened amount of turmoil that has recently surrounded Trump has contributed to what seems like a cloudy future for the dollar.
But political turmoil is just the beginning of what has been ailing the dollar…
People are Starting to See Through the Trump Tax Cuts, and the Dollar’s Strength Will Pay Dearly
The recent tax cuts are expected to bring growth in the near-term. However, while many companies have stated that they would increase hiring on the back of the cuts, a number of CEOs have made it clear that they won’t be following suit. Instead, they may simply hold onto the extra cash.
That doesn’t bode well for long-term economic growth, and experts are starting to see through the short-term impact for the economy. This rather dark outlook by economists is further driving the dollar down.
Marc Chandler, global head of currency strategy at Brown Brothers Harriman, recently said:
People are accepting the idea that tax cuts are boosting near-term growth but won’t change the long-term growth potential of the U.S. economy.…