[Video] Trump and the Federal Reserve at odds over the Dollar

AxiTrader Analyst, James Hughes looks at Trump’s focus on a weaker Dollar to boost exports.

At the end of last week, Donald Trump took aim at Chinese and European central bankers, accusing them of exchange rate manipulation.

This comes at a time when steady Federal Reserve rate increases are strengthening the dollar, providing another barrier to US exports.

But it’s worth remembering what’s driving this change.

Trump’s tax reform injected strong growth into the US economy. This is leading to inflation and the Fed is obliged to counter this through higher borrowing costs.

Governments do have one other option when it comes to managing inflation – and that’s hiking taxes or sharing the economic upside so other countries can benefit from the booming economy. Neither of those look to be likely moves from the current administration.