According to Greg Gibbs, Analyst at Amplifying Global FX Capital, US fiscal and trade policy contributed to a significant shock to global markets in 2018 and led to a resurgent USD after it had fallen significantly throughout the first year of Trump’s presidency in 2017.
“Last year was characterised by synchronised global growth. This year, global divergence returned as US GDP growth and company profits were supercharged by massive tax cuts and fresh government spending.”
“In contrast, economic and asset market performance in much of the rest of the world floundered for a variety of reasons. Higher US rates and tighter dollar funding conditions, political uncertainty, protectionist US trade policy and financial policy reforms in China have undermined global investor confidence.”