, Marc Faber Blog: Marc Faber: Trump Policies Will Only Hurt US Dollar in Long Run

Thursday, October 26, 2017

Marc Faber: Trump Policies Will Only Hurt US Dollar in Long Run

Economic guru Marc Faber warns that the Trump administration and its economic policies won’t help the U.S. dollar in the long run.

Faber, who has earned the nickname “Dr. Doom” for his pessimistic forecasts, explained to CNBC that the greenback “could easily rebound” by 4-5 percent or even more from current levels.

However, he said the American currency won’t benefit over time from any of Trump’s policies so far.

The dollar index has tumbled nearly 10 percent since the start of 2017. At the same time, gains among currencies such as euro and peso also added to the dollar's pain.

"I think the dollar could easily rebound by 4 to 5 percent, or maybe even more. Longer term, I'm obviously not optimistic about the U.S. dollar,” said the editor and publisher of The Gloom, Boom & Doom Report.

“You just have to look at the U.S. administration and their economic policies that will not be very conducive for dollar strength in the long run," said Faber.

"They're actually shooting themselves in their own feet, so long term I'm obviously negative about the U.S. dollar," he added.

For his part, Trump has continued to proclaim his dislike of a strong dollar, breaking with the traditional practice of presidents not commenting on the American currency.

"I like a dollar that's not too strong," he said, according to a Wall Street Journal interview transcript posted by Politico.

"I mean, I've seen strong dollars. And frankly, other than the fact that it sounds good, lots of bad things happen with a strong dollar," Trump said, according to the transcript.

Meanwhile, the dollar held losses against a basket of major currencies on Thursday following data that showed a faster-than-forecast increase in domestic consumer prices in August, Reuters reported.

U.S. consumer prices accelerated in August amid a jump in the cost of gasoline and rental accommodation, signs of firming inflation that could allow further monetary policy tightening from the Federal Reserve this year.

The dollar index, which tracks the greenback against six major currencies, was down 0.3 percent at 92.246. The index had been at 92.286 before the release of the data.

The Labor Department said its Consumer Price Index rose 0.4 percent last month after edging up 0.1 percent in July. Economists had forecast the CPI rising 0.3 percent in August.

“The inflation number, while probably not high enough to set off any inflation alarm bells just yet, should still be sufficient keep alive hopes for a third rate hike in December by the Fed,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

Strong gains for the greenback on Wednesday, when the dollar index rose 0.69 percent, its best day in nearly six weeks, was probably part of the reason behind the dollar’s muted reaction to Thursday’s data, Esiner said.

- Source, NewsMax