The decline in a key money ratio in China would be a compelling signal the incoming Trump administration is succeeding in reducing the US’s trade deficit. That is likely to mark the beginning of a secular downtrend in the dollar.
When everyone agrees, something else usually happens. There’s broad consensus that a Trump redux will bring a stronger dollar, but that’s exactly why you should be skeptical. After one of the strongest election rallies in more than 50 years, there are persuasive reasons to believe the US currency’s post-GFC uptrend will soon be at an end due to structural weaknesses, and a White House that will match trade polemics with decisive action.
