Dollar May Weaken Due to Trump's Policies, Insight Investment Reports

According to BlockBeats, Jill Hirzel from Insight Investment has indicated in a report that the U.S. dollar might weaken as U.S. President Donald Trump's policies diminish the appeal of American exceptionalism, potentially reducing capital inflows into the United States. Hirzel stated that policy uncertainties and a more aggressive 'America First' agenda could erode the cyclical support for the dollar, leading to a prolonged period of weakness. However, she cautioned investors against excessively betting on the dollar's decline through short positions, as growth outside the United States is expected to be weak at best, and speculators may already hold significant short positions on the dollar. Additionally, real interest rates, adjusted for inflation, are likely to remain high until signs of economic weakness emerge that are concerning enough for policymakers.