Uncertainty can be a predominant issue of Trump’s presidency, but in the last month several lessons have been learned that will probably have a continuous impact on both politicians’ behavior and investors. First, the attraction of sure refuge of the US Treasury bonds and the USD is not as solid as it had been assumed. Second, China’s challenge to the commercial war with the US has forced the market to reassess the strengths and vulnerabilities of both parties. As a result, the speculation that it could be the US, instead of China, who gives first of support, reports the Rabobank FX analyst Jane Foley.
EUR/USD could correct 1.10 for advances in trade
“Both factors suggest that Trump’s ability to promote agreements with US business partners may not be as strong as he had expected. We see margin so that the EUR/USD recedes up to 1.10. That said, the foundations of the US have weakened and see the dollar in a weaker path in the medium term. A 12 months horizon. “
“Following Trump’s commercial war, Rabobank now sees the possibilities of a recession in the US as greater than 50%. That said, in view of the inflationary risks associated with the tariff EUR/USD could also be derived from the taking of benefits in long positions in EUR. “
“This morning, press reports indicated that the EU could be preparing a plan to reduce tariff and non -tariff barriers. This could appear to the White House next week to restart commercial conversations. If more constructive news is received on this front, we would expect that the USD benefits from the coverage of shorts. That said, in view of the recession risks in the US Difficulties to maintain these medium -term gains. “
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
