Analysts: Trump's policies may weaken the dollar's cyclical support

Jin10 data reported on August 21, Insight Investment’s Jill Hirzel stated in a report that the dollar may weaken as Trump’s policies undermine the appeal of American exceptionalism and may lead to a reduction in capital inflows into the United States. Hirzel mentioned, “Policy uncertainty and a more aggressive ‘America First’ agenda could erode the dollar’s cyclical support, leading it into a period of sustained weakness.” However, she also pointed out that investors should be cautious when excessively betting on the dollar’s decline 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. Moreover, before any signs of economic weakness arise that would concern policymakers, inflation-adjusted real interest rates may remain elevated.