Thursday , 21 November 2024
Home Forex MUFG: FX Trump trade to resume
Forex

MUFG: FX Trump trade to resume

MUFG anticipates a resumption of USD appreciation over the coming months, following a brief pullback post-election. President-elect Trump’s strong mandate and planned policies on trade tariffs, tax cuts, and increased fiscal spending are expected to support higher yields and drive USD strength, particularly over the next 3-6 months.

Key Points:

  • Trump Policy Impact: Trump’s policies—tariffs, immigration enforcement, and fiscal expansion—are expected to lift yields and support USD, as markets anticipate swift action.
  • Market Positioning: The recent dip in USD reflects an election outcome that was already priced in, but MUFG sees room for renewed USD strength as markets position for policy implementation.
  • Medium-Term USD Risks: MUFG acknowledges that medium-term dollar strength may face headwinds as the full impact of these policies becomes clearer, though the short-term outlook favors USD gains.

Conclusion:

MUFG expects the ‘Trump trade’ to resume, with further USD upside in the near term as investors position for anticipated fiscal and trade policies. While medium-term sustainability of this strength is uncertain, a 3-6 month horizon shows strong potential for further USD appreciation.

For bank trade ideas, check out eFX Plus. For a limited time, get a 7 day free trial, basic for $79 per month and premium at $109 per month. Get it here.

This article was written by Adam Button at www.forexlive.com.

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Articles

USDCHF moves above converged 100 and 200 hour MAs and rockets higher

Earlier today, I posted:USDCHF: The USDCHF held resistance at the 100-hour moving...

Matt Gaetz withdraws name for Attorney General nomination

This article was written by Greg Michalowski at www.forexlive.com.

Fed’s Goolsbee: It may make sense to slow pace of interest rate cuts

It make sense for the Fed to slow the pace of interest...

Major European indices close higher on the day

Major European indices are closing higher on the day. The gains are...