Donald Trump might be behind the US dollar's decline this month
On June 23, Great Britain will hold a referendum on whether or not to leave the European Union.
Andy Kiersz / Business Insider
The firm notes the US dollar has seen broad-based weakness since the March 1 primaries, and it might be because anti-establishment candidates who are "relatively hostile to existing US trade and financial arrangements are genuine contenders for the US presidency."And by this, of course, Credit Suisse means Donald Trump, and to a lesser degree Bernie Sanders. The bank believes markets are pricing in the risk a Trump presidency would lead the US to a more protectionist trade stance.
Andy Kiersz / Business Insider, Bloomberg data
"I would do a tax. And the tax, let me tell you what the tax should be … the tax should be 45%," Trump said.
Credit Suisse notes exports in February's ISM report were notably weak and that the recent revision to Q4 GDP also showed a "lingering drag from net exports." So it is possible that it's not only Trump that's pushing the dollar lower.
As for what this means in the near-term, Credit Suisse says they remain bullish both the euro and the Japanese yen on a 3-month horizon.By then we are likely to have a clearer picture on what a US presidency might look like and whether a truly anti-trade candidate is in control.
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