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Opinion: Here’s a much better fix for America’s deficit than a weak dollar and trade wars - MarketWatch

1. Trump’s trade policy aims to weaken the U.S. dollar's global status. 2. The dollar's strength complicates U.S. trade deficits and manufacturing costs. 3. Miran's plan overlooks the historical context of dollar reserve currency. 4. Current-account deficits relate more to savings and investments than just exchange rates. 5. Reducing U.S. fiscal deficits could address trade issues more effectively.

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FAQ

Why Bearish?

The intention to weaken the dollar can create uncertainty, lowering investor confidence. Historical approaches to devaluing currencies have often led to market instability.

How important is it?

The article discusses the potential weakening of the dollar, which directly impacts the DXY. As a key measure of dollar strength, the DXY will fluctuate based on perceptions of trade policies.

Why Short Term?

Immediate reactions may follow Trump's trade policies, with markets likely to adjust rapidly. Long-term outcomes depend on broader economic changes and responses.

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