The re-election of Donald Trump as President of the United States will lead to an increase in the exchange rate of the US dollar against other major currencies and will also lead to an increase in the rate of inflation in the United States, predicts the South African news portal News 24.
Trump's plans to impose import tariffs and force European allies to pay more for their own defense will dampen economic growth in other parts of the world, increasing the dollar's appeal.
At the same time, investors expect that Trump's policies in the national economy will lead to higher inflation than it was during the Biden administration. This will mean that the Federal Reserve will have to keep interest rates high to prevent the economy from overheating, which in turn will favor the dollar.
Many financial analysts also expect the euro to fall sharply, perhaps below the core exchange rate of $1, if tariffs on European goods and US tax cuts follow.
Trump's return to the White House will also affect the global oil market, as it will stimulate oil production in the US, News 24 believes. Trump will also expand the ability of companies to obtain new licenses for exploration and production of oil and gas, it will also ease environmental regulations.