The Economist: “Reasoning from first principles you would expect Mr Trump’s protectionism to strengthen the currency. By raising the prices Americans must pay for foreign goods, his levies make them less attractive and thereby induce Americans to sell fewer dollars to buy them. What is more, his assault on the global trading system threatens to unleash economic chaos.
That sort of worry usually has investors clamoring for dollars, since they view the world’s reserve currency as a safe haven when markets are turbulent.”“In fact, the clamor has all been to sell. The greenback’s value had already been falling for months relative to a basket of its rich-world peers (see chart). It then cratered as the scale of Mr Trump’s new duties became clear.”