Examining the interplay between currency strength and global trade dynamics, a recent insight by CPR Asset Management (CPRAM) reveals that a persistently strong US dollar significantly intensifies international economic tensions. While trade disputes are typically framed around tariffs and policy differences, the thematic investment specialist’s analysis underscores that the dollar’s strength is a major, often overlooked factor. A high-valued dollar increases export costs and undermines domestic competitiveness by making imports cheaper, which in turn pressures local industries and exacerbates trade deficits.

“Reducing the trade deficits of the United States without weakening the dollar seems very complicated. However, it remains very difficult to know whether the new Trump administration prefers a weak dollar or a strong dollar,” says Bastien Drut, Head of Research and Strategy at CPRAM.

Read the full insight here.