Currency: Dollar rebounds from earlier 2% fall to hit one-week high

NEW YORK: The dollar rose in early North American trading as investors re-evaluated the impact of the victory of Republican Donald Trump in the US presidential election. The dollar had fallen 2% in the aftermath of Trump’s shock win over heavily favored Democrat Hillary Clinton, kindling fears of economic and political turmoil and calling into question the rise in US interest rates that had been expected in December. But despite Clinton being viewed as the status quo candidate who would leave a December rate hike on the table, some strategists say Trump’s protectionist proposals, tax cuts and promises to make US companies operating overseas bring back more of their income to be taxed could be positive for the dollar in the medium term. “The one thing we do know is we’re likely to see greater deficit spending from him with tax cuts and infrastructure spending and with the protectionist policies that (Trump’s) looking to put in place that will likely put upward pressure on wage growth and inflation,” said Scott Smith, senior corporate FX trader and market analyst at Cambrdige Global Payments in Toronto.

Published in The Express Tribune, November 10^th, 2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.