The old saying “everything has a price” bears quite a bit of meaning. Ultimately, everything revolves around all mighty currency. In some cases, it's great for currencies to be strong, but sometimes a weakening currency can prove to actually be a good thing. At the moment, it seems that Donald Trump wants the USD to fall in value. However, since he took office, it has only gained. Below, we'll talk about why Donald Trump would want a weakening USD, whether or not he would be able to make it happen, and what binary options traders should be watching for ahead.
Why President Trump Wants A Weaker USD
At the end of the day, purposefully strengthening or weakening a currency is nothing more than a matter of economics. Think about it this way. A country cannot grow without trade from other countries. If money wasn't coming from somewhere else, well, the economy would stay stagnant, working on simply what it has.
This is why currency prices are so important. At the end of the day, if a currency is too expensive, chances of successful trade with other nations starts to fall. With the current strong United States Dollar, relative to other global currencies, products made in the US, but sold abroad are seeing overwhelming inflation where they are being sold. This ultimately causes consumers to go for other options, harming the imports in the United States.
Ultimately, President Trump wants to see this change in a big way. If he gets what he wants, he will cause the United States Dollar to fall in value relative to other global currencies. In doing so, consumers around the world would be more willing to buy United States products as the cost in their respective countries would be declining.
Can Donald Trump Bring The USD Down?
We know that Donald Trump wants the USD to fall. However, how could he cause a decline in the currency without doing something to purposefully weaken the United States economy. At the end of the day, Donald Trump has yet to provide a plan that would successfully cause a reduction in the USD. When asked about it, he simply says that the USD is too strong.
Nonetheless, some experts are expecting that he will be able to bring the USD down through work with the Federal Reserve. The idea here would be to have the Federal Reserve hold interest rates at low levels. If this happens, demand for the USD would likely start to weaken, causing the value of the USD to fall. In fact, even trump himself has hinted at this idea, saying…
“I am a low-interest rate person. If we raise interest rates and if the dollar starts getting too strong, we're going to have some very major problems.”
What Binary Options Traders Should Be Watching Ahead
With all that is going on surrounding Trump's transition into the office of President of the United States, the USD is likely to see tons of movement ahead. In order to take advantage of the opportunities this movement starts to create, binary options traders should stay on top of the Donald Trump story, in particular, watching as he begins to work with the Federal Reserve. So far, the dollar has climbed, and many are suggesting that even Donald Trump couldn't make it fall. However, only time will tell. The one thing we know is that if we stay on top of the story, there are going to be several opportunities to capitalize on surrounding the USD.
What Do You Think?
Will Trump be able to bring the USD down? Join the discussion in the comments below!