Deutsche Bank says Trump presidency + China tariffs = EUR/USD @parity

Deutsche Bank’s George Saravelos spoke in an interview with Bloomberg TV, his main point on the EUR:

• “Imagine a situation where the US puts up a huge tariff wall against China,”
• “All these Chinese goods would have to get diverted into other markets including Europe, so therefore we would see a big deflationary shock in Europe.”
• Says such tariffs would be implemented in a more sweeping and rapid fashion if Donald Trump wins the US presidency, leading to parity between the euro and dollar.

More:

• more tariffs on China and elsewhere would have inflationary consequences for the US
• disinflationary consequences for the rest of the world
• This would exacerbate the asymmetry between the Federal Reserve and the ECB

This article was written by Eamonn Sheridan at www.forexlive.com.