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We welcomed a rally in the dollar with the new US President Trump taking office. Dollar index 105 passed the level quickly. Euro, sterling, We saw a rapid appreciation against parities such as the yen.. But those who remember Trump's previous term know that; He does not like a strong dollar and high interest rates.. In fact, in April, the dollar weakened against the Japanese yen. 34 Even breaking the annual record “disaster” He interpreted it as. Trump has also frequently said that the strength of the dollar is a burden.
Trump, view that the weak dollar offers a competitive advantage for US manufacturers. For this reason, he also criticized the Fed's policies from time to time.. But Trump's rhetoric did not slow down the dollar much during his time.. Although these discourses in some cases lead to the weakening of the dollar in parallel with economic policies,, Especially in times of crisis, the dollar still gained value as a safe haven.
If we look at the course of the dollar during Trump's first term as president;
2017 (dollar index: 91)
2017 It was the beginning of Trump's first term. Trump's economic policies during this period, There were tax reform and trade policies, but uncertainty about how they would be implemented weighed on the dollar. Mart, Although the Fed increased interest rates in June and December, at the beginning of the year 100 dollar index at levels, 2017'do 91 completed at the level.
2018 (dollar index: 96,17)
2018 Trump started trade wars with China in. This situation increased global uncertainty. The dollar has become a safe haven in this uncertainty environment. The Fed's interest rate hikes in the same year further supported the dollar and DXY finished the year above 96..
2019 (dollar index: 96,39)
Dollar index this year 2018 It closed at almost the same level as. 2019Fed cuts interest rates in, Factors such as the continuation of trade wars were effective in the fluctuation of the dollar.
2020 (Pandemic) (dollar index: 89,94)
2020 The world economy experienced a great shock with the covid pandemic in. In the early stages of the pandemic, the dollar gained value as a safe haven. But the Fed's aggressive interest rate cuts and 3 trillion-dollar fiscal stimulus packages weakened the dollar. DXY at the end of the year, 89.94 reached its lowest level during Trump's presidency..
In summary; Trump's first attempt at a weak dollar 4 In the year, the dollar index often fluctuated.
The Fed and Trump seem to be on the same path now. US Federal Reserve, inclined to loosen tightening monetary policy. He emphasizes that the interest rate reduction process will continue in 2025.. The only hitch, Trump will increase import taxes and this will create a new upward pressure on the dollar, as in previous trade wars.. On the other hand, the monetary expansion and inflationary steps that Trump will implement again may force the Fed to take tightening steps again..
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