The dollar, a political currency

Anyone who thought that the trade tariff policy would be more stable after 9 July needs to think again. In recent days, Trump has announced higher tariffs on Japan, Canada, Brazil and copper. And he probably will not stop at that. What's more, in what has become a daily ritual, the White House and its allies have called for Fed chair Jerome Powell's resignation and a rate cut of at least 300bp. In short, economic policy is not being conducted to serve the US economy but to satisfy the president's wishes. In recent weeks, the dollar has been behaving more and more like the currency of an emerging country, reacting less to macro fundamentals than to political upheavals.