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Your guide to what the American elections mean 2024 for Washington and the world

The markets reduce the risk of a neck shift in the global financial system during the reign of Donald Trump, in dollars in its center.

The American currency fell from the post -election rise, as it reached its lowest level in two months against a basket of other currencies at the beginning of this week, despite the latest amazing powerful inflation data. This is likely to be somewhat sedative for the president, who spent years in handrails against what the corrosion impact on our manufacturing in a very strong back.

But with any reasonable scale, the dollar is still strong. The days when the euro was trading steadily was about $ 1.30, and Sterling at a price of $ 1.60 behind us – tried $ 1.04 and $ 1.26 for size instead. The dollar index has risen about 15 percent over the past decade.

To date, the mantra was on the market: don’t worry, the United States will not do anything strange to try to force the currency down. One month after the era of the new president, it is time to ask whether this assumption is still logical.

Certainly, the agreement and traditions are not hindered in other regions. On political geography, diplomats and foreign policy have learned this in the difficult way. Decades of carefully coordinated alliances have come out of the window, as Trump’s supporters describe as a peace -to -peace endeavor in Ukraine.

At home, the new administration is no less than inconvenience. Trump launched the richest man in the world, Elon Musk, in the internal actions of the federal government, as the liberal wires in wires. Not even the Federal Aviation Administration does not survive the discounts in spending.

In financial markets, investors discuss with explicit approval.

American stocks punch to another high record this week. Does government bond investors feel concerned about the challenge of checks and dear balances in the heart of the government? Apparently no. Some of the major global reserve managers IncreasingBased on a decline in the demand for the treasury after the day of the elections and its outbreak rise in the price of gold, but the prices of bonds were dispelled at the beginning of this year. There is no sign of a crisis – financial, inflationary, or any other flavor – there. It turned out that the bond market is happy to see federal spending has decreased, by any means that consider musk and the so -called government efficiency necessary.

In short, at the present time, investors look at Trump 2.0 from Trump 2.0 as a political walk, not a matter of anxiety.

In currency markets as well, the position of the president’s policy does not extend. Some correspondence here was difficult to analyze. Treasury Secretary, Scott Besense Fox News, told the US strong dollar policy “does not mean that other countries get a currency weakness”-hardly a clear indication of selling Pak.

But Trump’s conviction that the strength of the dollar gives commercial partners an unfair advantage well known, and Dirty In the financial markets – an article published last year by Presidential Counselor Stephen Miran – shows that the economists close to the president are of the same mind.

Miran’s article is radically intended to be traditional and managed to reformulate the financial system, and clearly linked foreign governments in the American federal tanks to preferential terms on trade and even security. In this, the dollar can significantly appear as a goal in itself.

Miran wrote: “The consensus on Wall Street is that there is no unilateral approach that the Trump administration can take to strengthen currencies with less than their value,” Miran wrote. “This conclusion is wrong.”

Miran is right to point out that the market participants are so far He laughed The idea of ​​a serious effort to weaken the dollar. They simply argued, without discounts in interest rates in the United States that risk leaving inflation, or a kind of agreement between other countries to sacrifice self -interest at the feet of American industrial policy, or create vast American reserves used in the hose the dollar down. Six months ago, all this looked ridiculous. Do you really bet?

If Trump is bold enough to put NATO in danger, it is bold enough to do the same with the foundations of the financial system. The quiet markets gave note that local and unpredictable domestic policy, in fact. Investors should not assume that the renewed president will gently move on the dollar.

katie.martin@ft.com