DBS Group Research economist Philip Wee argues that recent political developments in the United States are creating downside risks for the Dollar. He highlights how President Trump’s State of the Union and a key Supreme Court ruling have weakened prior policy support pillars for the USD, shifting global trade dynamics and undermining the administration’s leverage-based tariff strategy.
SOTU and SCOTUS pressure Dollar outlook
“US President Donald Trump’s State of the Union (SOTU) address presents downside risks for the USD.”
“The administration has shifted from a position of “unilateral strength” to “defensive campaign management,” undermining the greenback’s previous support pillars.”
“First, the SOTU confirmed that the administration has entered a pre-election “campaign mode,” prioritizing domestic economic stability over geopolitical brinkmanship.”
“Second, the Supreme Court’s 6-3 ruling on February 20 has fundamentally undermined the administration’s most potent trade weapon.”
“Hence, global trade dynamics have shifted from coercion to waiting.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Source: https://www.fxstreet.com/news/usd-political-shifts-weigh-on-greenback-dbs-202602261154
