U.S. dollar outlook darkens as trade war looms

Section:

This also likely will prompt more vigorous suppression of the monetary metals by the U.S. government, and more determined avoidance of the issue by mainstream financial news organizations.

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Gertrude Chavez-Dreyfuss
Reuters
Friday, March 2, 2018

NEW YORK -- The U.S. dollar could face headwinds if President Donald Trump's proposals to impose stiff tariffs on steel and aluminum imports are enacted, with the biggest risk stemming from the possible flight of capital flows needed to finance ballooning U.S. deficits.

Currency markets, in general, dislike any form of trade intervention and previous protectionist efforts by the U.S. government have resulted in dollar weakness.

... Dispatch continues below ...



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"The U.S. is now in a very precarious position because it's putting a risk premium on U.S. assets by introducing tariffs and going down this protectionist route, which is negative for growth," said Mark McCormick, head of North American FX strategy at TD Securities in Toronto.

The introduction of import tariffs threatens to increase the price of foreign products in the United States, reducing demand and imports.

Tariffs introduced by Presidents George W. Bush and Bill Clinton in 2002 and 1995 resulted in a 15 percent decline in the dollar overall, according to estimates from TD Securities, although there were other factors that also undermined the U.S. currency during those periods. ...

... For the remainder of the report:

https://www.reuters.com/article/us-global-forex-trade-war-analysis/u-s-d...

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