The Tell: Goldman sees ‘low but rising risk’ Trump will intervene to weaken U.S. dollar

If there’s anything on the economic menu President Donald Trump desires nearly as much as lower interest rates, it’s probably a weaker U.S. dollar. The question for investors is how far will he go to get it.

Goldman Sachs on Thursday described outright currency-market intervention as a possibility, albeit a “low but rising risk.” Analyst Michael Cahill pointed to an increasing series of presidential tweets, comments and policy actions and proposals that have put U.S. currency policy back in the spotlight.

And while such a move would cut against policy norms that have been in place since around the mid-1990s (see chart below), “in a world where QE has become almost conventional, FX intervention is not a giant leap,” Cahill said in an email, referring to the quantitative easing, or QE, programs undertaken by major central banks in response to the global financial crisis.

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