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Negotiating the FX fallout from US tariffs
Since the US presidential election, financial markets have been sanguine about the policy platform of the incoming Trump administration. The S&P 500 and the USD (DXY index) are up 6.6% and 2.5%, respectively. Markets still seem to be assuming only mild economic disruption from US trade tariffs, and thus remain focused on the expectations of robust economic growth. The USD’s strength in particular seems to be dependent on this optimism about US exceptionalism. In our view, markets may be underestimating the tariff impact and we would encourage investors to avail themselves of near-term USD strength to position for ... (full story)