The US dollar has peaked and will probably decline this year under President Donald Trump, according to UBS Group AG’s wealth-management unit, which expects the currency’s impending weakness will help to benefit prices of base and precious metals.
“The more debt that Donald Trump promises through higher infrastructure and lower tax and tax cuts tends to lead itself to a twin deficit situation in the US, which clearly is negative for the currency,” Wayne Gordon, executive director for commodities and forex at the unit, said in a Bloomberg TV interview.
Mr Trump has started to implement his agenda in the world’s largest economy after the Republican repeatedly promised on the campaign trail that he would rebuild US infrastructure as well as deliver tax cuts.
The outlook for the currency is also being shaped by the Federal Reserve, which has signalled it plans further interest rate increases this year with inflation coming closer to its goal and near-full employment. Shifts in the dollar can influence raw materials that are priced in the currency.