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Mitsubishi UFJ: Trump's tariff plan is crucial to the outlook for the US dollar

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On February 24, Mitsubishi UFJ analysts said in a report that Trump’s trade policy will play a key role in the future performance of the dollar. The dollar’s recent reversal partly reflects rising investor optimism that Trump’s trade plan may not be as damaging to the global economy as feared. However, trade policy uncertainty is likely to remain high for now. If Trump imposes damaging tariffs, the dollar could recover strongly in the second quarter. This may also trigger an intensification of Fluctuation in the Forex market. Conversely, if all of Trump’s tariff threats are drastically downplayed and/or trade protocols emerge, the dollar could see a larger pullback.

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