Post Trump, Asian currencies hit the skids - AmpGFX

Greg Gibbs, Director at Amplifying Global FX Capital, suggests that the broad Trump message is anti-trade and anti-globalization, bring back manufacturing jobs to the USA which has contributed to a significant fall in Asian currencies. 

Key Quotes

“The media is asking – will Trump label China a currency manipulator, or slap a 45% tariff on Chinese imports, some of the claims he made during the campaign.  While Trump has not revisited these issues as President-elect, presumably he will be pressured to do so at some point.”

“The Mexican peso has fallen more sharply than most on Trump promises that he will build a wall on the Mexican border, and somehow make Mexico pay for it, and claims that NAFTA is a bad trade deal that needs renegotiating and crack down on illegal immigration from Mexico. The US accounts for 80% of Mexico’s exports.”

“However, one may wonder if the fall in MXN has gone far enough as the realities of messing with NAFTA and the downside of routing out a long tradition of hard working productive immigrants while stoking social unrest lead to an inevitable softening of the hardline campaign message.”

“The flipside of pursuing tougher trade policy is that the US may end up being left out of trade deals.  US companies are trying to make inroads to the Indian economy.  And by turning up the heat on China and dealing out of the Trans-Pacific Partnership agreement, the US risks pushing much of Asia into the arms of China and being frozen out of developing world trade pacts.  These political realities are likely to force Trump into a more conciliatory tone.”