One of the main areas in finance which is currently in the eye of the storm that is the Trump administration is the US Dollar. Since the inauguration of the Trump administration, there has been a lot of drama in the United States political capital Washington. While other aspects of the US markets have been relatively stable such as the stock market, one of the hardest hit markets is the foreign exchange market. Given the fact that the global currency market has transactions in excess of five trillion on a daily basis it is a cause for worry.
The Origin of the Crisis
Analysts of the currency market all over the world have voiced their opinions regarding the declining dollar. The dollar has declined astronomically in a fall that is regarded as the largest in recent years. What is more disconcerting is the fact that analysts state that this is only the beginning, as the dollar is expected to take further hits as the Trump administration continues with leadership of the United States economy.
Analysts have blamed the fall of the dollar on the unpredictability of the Trump administration, as well as the political drama that is being played out in Washington; both in the White House as well as the two houses of government. The currency of any given country is a fitting reflection of the country’s condition both in the economic and political sense. In this way given the performance of the United States dollar it can only be said that the situation is indeed wanting.
One of the policies that Trump has advocated for is the policy of placing America First. In this way, President Trump stated that he actually wanted a weaker dollar, as it would help in his agenda of strengthening America in the face of the world. In this way the policies of the Trump administration as well the other risk factors associated with the administration play out in the currency market hence resulting in the continuous decline of the dollar.
In years before the ascension of Trump to power the dollar was on the rise, with the dollar climbing to its highest level in the year 2005. A few months prior to the election, the traders were optimistic and as such, the dollar continued to rise and remain relatively stable. Since Trump took power, issues started unraveling and the dollar took a nose dive. It is now only a few months into the Trump presidency and matters are dire. The question that many all over the world are asking is whether the Trump administration is bad for the dollar.
Given the fact that a country’s currency is a reflection of the country’s economy, the performance of the dollar gives adequate insight into the America situation. In a country where the economy is admired by other nations all over the world, it is fast becoming a less than ideal investment destination. A point of concern is whether the economic agenda promised by Trump will be accomplished, give the current state of things in the country.