A more favourable mix of fiscal & monetary policies for the US dollar - BTMU

Analysts at Bank of Tokyo Mitsubishi explained that the initial response of the foreign exchange market to the surprise election of President Trump has been clear.

Key Quotes:

"The US dollar has strengthened sharply across the board as market participants have placed greater importance on the more positive aspects of his plans for comprehensive tax reform, infrastructure investment and lighter regulation.

In contrast, market participants’ concerns over the more negative aspects of his plans for more protectionist trade policies, tighter immigration control, and higher debt have been placed on the back burner.

The US equity market has taken higher US policy uncertainty and yields in its stride providing the foundations for a stronger US dollar. The US dollar’s upward momentum could accelerate further heading into next year bringing an end to the period of consolidation which has persisted throughout most of this year."