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Trump’s victory not yet fully priced into currency markets
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Trump’s victory not yet fully priced into currency markets

The dollar continued to rally on Tuesday, suggesting that the foreign exchange market has not sufficiently priced in new President Donald Trump’s election victory, said George Saravelos, a researcher at Deutsche Bank.

The ICE U.S. Dollar Index, a gauge of the greenback, rose nearly 0.4% Tuesday morning. Meanwhile, the euro weakened by 0.3% against the dollar, raising the question of how far this development could go.

“Uncertainty remains very high, and the takeaway is that everything now depends on the scale and speed of political changes,” Saravelos wrote in a note. “In summary, if the Trump agenda is implemented fully and quickly without a countervailing policy response from Europe or China, we could see EUR/USD fall to parity down to 0 .95 cents, or even below.”