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The U.S. Dollar Has Declined By 5% Since The Peak Achieved After The Trump Election: This Should Be Helpful In Reducing The Trade Deficit

ArmchairPoliticianFederalReserve, May 18, 2017, by Brad Peery, bradpeery007@gmail.com

President Trump’s election, and the euphoria about his tax cuts, bringing jobs back to the U.S., and undertaking to improve our crumbling infrastructure caused the U.S. dollar to improve about 5% and reach new highs in December, 2016.

The Federal Reserve increased interest rates by 0.25% on December 14, 2016. The dollar fluctuated, but dropped about 2.5% by the time the Fed raised rates by another 0.25% on March 15, 2017. The drop in the dollar is a little surprising, since increasing the rate on U.S. government rates should attract capital to the U.S., and increase the value of the dollar.

The dollar continued to decline after the Fed rate increase, but political actions such as the difficulties in passing the Obamacare healthcare replacement bill temporarily caused the dollar to decline, but then it partially recovered, and reached a level about 2% below the peak it reached in December.

The most recent dollar decline took the dollar back to the level where it was when President Trump was elected, completing a 5% drop from its peak. On May 17 it reached this level as controversy surrounded a special prosecutor being appointed to examine any Russian collusion with the Trump campaign in the elections. Such collusion appears to be pure democratic and liberal media produced uncertainty that so far does not have any facts to back such assertions.

Armchair Politician Opinion: The election of President Trump has caused the Democrats to attempt to obstruct President Trump’s agenda of job and economic growth, regulatory reform, healthcare reform, increased defense spending, and the reduction of the size of government. It has promoted getting a special prosecutor to see if a crime was committed with respect to the Russians, or the firing of James Comey, the ex-FBI director. It seems unlikely that a crime has been committed, which should come out at some point.

From an economic standpoint, the decline of the dollar, if it remains at its’ current level, should be helpful in improving our foreign trade imbalance. And, it might help in job creation.

See Also:
ArmchairPolitiicianFederalReserve, May 3, 2017, by Brad Peery,
The Federal Reserve Plans To Continue Increasing Interest Rates And Sell Portfolio Securities: If They Do, GDP Growth Could Slow

See Also:
ArmchairPolitiicianEconomy, April 30, 2017, by Brad Peery,
U.S. Economic Growth Slows: It Should Accelerate Next Quarter and Come In At About 2% In 2017.

See Also:
March 2, 2017, Brad Peery, ArmchairPolitician.US
Trump Believes We Can We Achieve 3% Economic Growth. What are the Realities?

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