Trump could wipe Trillions off China’s GDP

Although Hilary Clinton is currently ahead in the polls in the Presidential Election, there is a real possibility Trump could gain power. We only have to look at Brexit polls pre referendum to realise how wrong they can be.

Although Trump is considered to be a successful businessman by some, it does not necessarily mean his election would be a positive to the US economy. If you actually look at his accomplishments, they are not that impressive. Trump has launched his empire based largely on his name and sizeable loans. Trump has constructed luxury casinos, hotels and apartments, which have now become iconic to 80’s excess.

However, Trump has encountered four bankruptcies throughout the years. The most recent being the fall of Trump Entertainment Resorts in 2009. Though he has faced near financial ruin and multiple bankruptcies has had kept status through his real estate licenses.

Trumps business acumen however should not be considered the major threat to the stability of the US economy. His radical ideas and nonchalance to push them through are the real worry.

He has already managed to wipe 10% off the Mexican peso due to his stance on immigration, but the real hazard is if he gets his way to limit trade with China. Trump wants to place a 45% tariff on Chinese goods to narrow trade deficit.

If the two world’s largest economies are at logger heads over trade arrangements the world economy will suffer. The effect on Chinese and US GDP would be staggering. Well into the Trillions for both economies.

Keeping this in mind if Trump gains power, The Federal Reserve may have to rethink raising interest rates by the end of the year despite the fact they are meant to act as a separate entity to the government.

If you are a US Dollar seller it may be time to cash in. This is the best time to buy Sterling since the Summer of ’85. When Duran Duran were number one with “A View to a Kill” and Back to the Future was top at the Box office.

The US elections are now less than 2 months away, US Dollar volatility is likely and clients looking to Sell US Dollars in the near future should get in touch with our team on 01494 725 353.

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