Barclays analysts tip an up to 3% gain for the US dollar if Trump wins the 2024 Presidential election:
- Trumps protectionist policies (such as tariffs), fiscal stimulus, and a weaker commitment to NATO should add to the greenback's strength
- "Trump's flagship proposals across trade, fiscal and foreign policy amount to a structural break with the past, with potentially far-reaching implications for FX markets and the dollar,"
- "We expect dollar gains to be larger when tariffs apply to economies with large trade surpluses versus the U.S. (eg, China) and somewhat muted when trade is more balanced (eg, versus the eurozone),"
- a weaker NATO commitment is a "dollar positive via higher risk premia in other (mainly European) currencies"
This could be useful for trading the US dollar (long) if reputable opinion polls publish Trump ahead. A trading opportunity, don't go betting the farm on it.