Key Takeaways
- 💲 Citi encourages buying USD dips tactically after Trump’s win
- 🌍 USD expected to see further upside against EUR and Scandies
- 🏛️ Focus on tariff-sensitive currencies in FX markets
- 📉 Caution advised on immediately following USD rally
- 🚀 Potential dip in USD post-Fed meeting may be a buying opportunity
- 📉 Currencies vulnerable to tariffs like CNH, TWD, and THB are seen as clear shorts
- 💰 EUR and Scandies are candidates for selling due to trade surpluses with the US
- 🛢️ NOK could underperform on weaker oil under Trump
- ⛓️ SEK sensitive to global manufacturing cycle and trade wars
- 📊 Full "red sweep" in US elections could justify 5% USD appreciation
Market Insight after Trump’s Win
Following the recent US election results and the victory of President Donald Trump, market analysts predict several key trends in the foreign exchange markets. Citi strategists are advising investors to tactically buy USD dips after Trump’s win, expecting further upside against currencies like the EUR and Scandinavian currencies.
With a focus on tariff-sensitive currencies, investors are cautioned against immediately following the USD rally, instead waiting for a potential dip that may present a buying opportunity. Currencies vulnerable to tariffs, such as the CNH, TWD, and THB, are considered clear shorts in the current market environment.
Furthermore, currencies like the EUR and Scandinavian currencies are likely candidates for selling due to trade imbalances with the US. The Norwegian Krone (NOK) could underperform, particularly if faced with weaker oil prices under a Trump presidency. Additionally, the Swedish Krona (SEK) is expected to be sensitive to the global manufacturing cycle and any potential trade wars that may arise.
Overall, if there is a full "red sweep" in US elections, there could be a justification for a 5% appreciation of the USD. This uncertainty around the House outcome could lead to a "red wave" in conjunction with a Trump win, shaping the market dynamics in the coming weeks.