Trump, on reflection
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Trump, on reflection

Donald Trump May 2016 PA 230x150

Even by Donald Trump’s standards, it was quite a comment. After leaving traders and investors weak at the knees with talk of big spending and bumper tax cuts, the US president-elect caused more than a few scratched heads this week as he said the dollar was too strong.

That just did not fit with the inflationary trade that so many had been betting on since that fateful election night in November.

We’re far from a full unwinding of the Trump trade, but alarms should be ringing that the conciliatory note he struck during his acceptance speech — that sparked the rush into risk assets — may have been due to nothing more than the fact that it had been a long night and he was tired.

Trump’s aggressive behaviour during his first press conference as president-elect, to his dubious attempts to untangle himself from his business empire by handing it to his children — and not to mention his ability to find time to tweet about actresses when he’s supposed to be forming a cabinet — all show that his acceptance speech was the exception, not the rule.

There are likely to be more than a few investors that were stung when Trump made his claim that the dollar is overvalued. They only have themselves to blame.

The promises that Trump made to the US working classes are almost certain to prove to be nothing more than smoke and mirrors. But it now looks like many a sophisticated investor will have to take a long hard look at themselves for getting carried away on the claims of a man who cares less about the country than he does his own image. 

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