Analyst: Trump's policies may weaken the cyclical support for the dollar

ChainCatcher news, according to Jinshi reports, Jill Hirzel from Insight Investment stated in a report that the dollar may weaken as Trump's policies undermine the appeal of American exceptionalism and could lead to a decrease in capital inflows into the United States.

Hirzel stated: "Policy uncertainty and a more aggressive 'America First' agenda may erode the cyclical support for the dollar, leading it into a period of sustained weakness." However, she also pointed out that investors should be cautious when overly betting on a decline in the dollar through short positions, as growth outside the United States is expected to be at best weak, and speculators may already hold significant short positions on the dollar.

Furthermore, before signs of economic weakness emerge that are sufficient to concern policymakers, inflation-adjusted real interest rates may still remain elevated.