China and America currently stand face-to-face; two economic gunslingers hands hovering over their triggers, waiting for the other to act. And whether or not either will draw for their guns boils down to one man – President-elect Trump.
Markets have been very positive on the new U.S President elect and have been quick to embrace the “reflation” trade over the past fortnight.
Is it too much perhaps? If so, this would suggest that some of the aggressive market moves that we have witnessed across the various asset classes may prove a tad overly optimistic on what can be delivered by the Trump administration.
The dollar is higher versus most major pairs as it continues to surge in the aftermath of the 2016 presidential election. The shock victory by Donald Trump is being taken in stride by the market after the initial recalibration of democratic win expectations. The dollar had been higher for most of the year given the Fed’s insistence a rate hike is coming. The comments by president-elect Trump on spurring growth by ending the austerity that has been prevalent in the developed world following the 2008 crisis has boosted the currency and global stocks higher.