. According to CNBC, David Marsh, co-founder of the official forum of Monetary and Financial Institutions in London, pointed out in an exclusive interview that in the past four years, the real exchange rate of the US dollar has increased by as much as 10% a year. It is estimated that the US dollar will collapse after about a year of stronger than the beginning of the 1980s, and Trump will not be able to protect American workers.
Shortly after Trump took office, he claimed that the US dollar was too strong, impacting the US dollar index fell 4.4% from a 14-year high of 103.82 points to 99.223 points. Marsh predicts that the $5 html should be able to recover the lost in the near future, causing a substantial impact on the areas that Trump claims to help, but will continue to decline after that.
Marsh said that Trump may sign a new square agreement with the five major industrial countries and join forces to interfere with the foreign exchange market, but this should be a long time later. In the short term, Trump may look for scapegoats everywhere and criticize other countries for manipulating currency. China, Japan and Germany will be the targets of his anger, but no mistakes will be the United States.
Historically, the five major industrial countries, the United States, Japan, Britain, France and West Germany at that time, signed a square agreement in 1985 to jointly interfere in the foreign exchange market, causing the US dollar to depreciate in an orderly manner relative to major currencies such as the Mark and the Japanese yen, and solve the problem of the huge trade deficit in the United States.
Japanese Prime Minister Shinzo Abe will meet with Trump on February 10. The market is worried that Abe may surrender and cooperate with Trump to suppress the US dollar. Investors will close their positions before the two meet.
According to Thomson Reuters, former Japanese Finance Minister Treasury, known as Mr. Japanese yen, said in an interview that the US dollar may fall below 100 against the yen by the end of this year, as the Trump administration seems to support the weak dollar policy, the market may expect the Federal Reserve to slow down the pace of interest rate hikes, and Bank of Japan may also terminate the active monetary easing policy. Kamihara, who is currently a professor at Aoyama University, believes that even if the yen shows a strong upward trend, Japan should not intervene because the United States will not support such foreign exchange market actions.
However, barron`s.com reported that Bank of America Merrill Lynch analysts Shusuke Yamada and Izumi Devalier still believe that the Abe administration cannot easily make concessions and accept Trump's instructions to suppress the dollar, because Abe's supporters will definitely be disappointed, and the Japanese economy is not enough to withstand the impact of foreign exchange fluctuations.
report said that Abe's supporters include political conservatives and believers in Abe's economics . Although he valued the US-Japan alliance throughout his political career, he also emphasized Japan's diplomatic independence and national security. Abe has thus won the support of political conservatives and diplomatic hawks, and believers in Abe's economics are also an important pillar of his. The report also pointed out that if Abe accepts Trump's request to suppress the Bank of Japan (BOJ) monetary policy or interfere with the foreign exchange market, this will be regarded as a major concession for Japan's sovereignty to the United States.
