1. Trump's tariffs dampen dollar sentiment, influencing FX trades. 2. Bearish positioning on the dollar contrasts with bullish euro trends. 3. Long-term dollar weakness expected due to trade war and stagflation risks. 4. Euro and GBP forecasted to appreciate amid U.S. tariff strategies. 5. Australia and New Zealand currencies may strengthen in response to tariff effects.
Tariffs create uncertainty, potentially leading to lower corporate earnings in S&P 500 companies, particularly exporters. Historically, trade wars have resulted in market volatility and declines.
Given the U.S. dollar's influence as a reserve currency, shifts in its strength can directly impact S&P 500 earnings, particularly for multinational corporations. Tariff announcements and potential retaliations could reshape trade valuations significantly.
The enduring effects of tariffs and trade wars often unfold over months, impacting corporate strategies and investor sentiment long-term. For example, the tariffs from previous trade disputes have continued to affect market dynamics several years later.