In his weekly currency forecast for FX-MM, Natixis’ senior forex analyst, Nordine Naam, analyses the markets’ movements in light of Donald Trump’s US presidential election victory.
While Donald Trump’s poll-defying victory prompted a negative knee-jerk reaction elsewhere, the US dollar received a boost – as the prospect of both stronger US economic growth and the Federal Reserve (the Fed) continuing its monetary policy normalisation under Trump’s premiership spurred investors.
For Naam, the US dollar has been buoyed by the market’s dismissive attitude towards the president-elect’s protectionist policies. In this respect, the greenback is expected to continue its rise, with the DXY dollar index set to test 102 during 2017.
Elsewhere, the pound appreciated against all G10 currencies, most evidently against both the US dollar and the euro following Trump’s victory. As the nature of Brexit will become clearer by Q1 2017, however, Naam expects the EUR/GBP to recover towards 0.90 during the next quarter.
To read the full forecast, please click here.