Photo: Carlos Barria / Reuters
The US President Donald trump may use the deliberate weakening of the dollar in trade war to strengthen the position of the American economy. This opinion was expressed by analysts at investment Bank JPMorgan Chase & Co., reports Bloomberg.
“Although not our baseline scenario, but to preclude such rotation in the direction of foreign exchange intervention impossible, especially given the fact that the trump periodically hints that she’s interested in a weaker dollar,” — said the chief economist of the organization Michael Feroli.
In his opinion, trump may take such a step especially given the regular accusations against China, which is manipulating the Renminbi, creating trade advantage Chinese goods. As an example, the Agency cites a series of tweets, where trump accuses Chinese and European authorities of deliberately manipulating the exchange rates, and a rate hike from the Federal reserve system (FRS) the us economy causes only harm.
The last time the US government intervened in the exchange rate through intervention in 2000, when the G7 agreed to support a rapidly falling Euro. A ransom of$, last held in 2011 to support the Japanese yen, which came under pressure due to the earthquake and tsunami in the country.
However, Veroli does not believe that such an option is possible. Trump could theoretically limit the fed’s independence, but the backup system has all the tools in order for these obstacles to be overcome. The analyst believes that such risks are small, although their deletion is not worth it.
The U.S. President regularly expresses dissatisfaction regarding the conduct of trade relations of different countries, from Russia to Mexico. However, the most acute trade relations are observed between the US and China. The authorities have already introduced a number of trade restrictions against each other. Losses to countries already exceed 100 billion dollars.
Video, photo All from Russia.