(Bloomberg) – The currency ratings of Wells Fargo & Co. say that the US dollar is one of the market winners of the trade war of President Donald Trump.
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The concern about the fall -out of his plan to continue to raise rates, has troubled financial markets worldwide – dragged the dollar down together with shares so far this year in the midst of worries, it can re -use inflation and establish the American economy.
But Wells Fargo stripers, including Aroop Chatterjee, said that the currency slide will probably be temporary: they said in a note to customers on Monday that the dollar can rise everywhere from 1.5% to 11%, depending on how high the US raises rates and how other countries react.
The main reason is that the American rates would weaken the demand for overseas goods, in which strange currencies are dragged. In addition, the inflato effects will probably encourage the Federal Reserve to keep the interest rates increased. The biggest profit, according to Wells Fargo, would come if other governments did not take revenge, with smaller profits, depending on the degree of response.
“The combination of competitiveness that stimulates the stronger dollar plus monetary policy expectations that control the dollar – that is a bit of how you end the strong dollar at rates,” Chatterjee said in an interview.
The forecast comes after the US dollar went against most of its important counterparts in the first three months of the year. On Monday, the world markets were broken by new attacks of volatility while traders were waiting for the next rate announcement of Trump on Wednesday.
But the “the global overflow effects of all this policy security and the actual tariff increases are considerably too expensive,” said Chattterjee. “And that is a kind of where we probably disagree with how the markets are currently positioned.”
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