When Trump was elected last year, many of the world’s greatest hedge fund managers like David Tepper said that the USD Index would go from 96 to 115-120. Why? Because after NAFTA came into effect on January 1, 1994, the U.S. Dollar Index fell almost 18 points. If Trump were to pull out from NAFTA, fund managers like Tepper expected the USD to rise as much as it fell in 1994-1995. (18 points above 96 is 114).
*Read our new webpage titled Why the U.S. Dollar Index was flat from 1991 to 1995
*NAFTA resulted in Money Flow from the U.S. to Mexico. American companies moved overseas to build factories. Cancelling NAFTA would have caused Money Flow to move from Mexico back to the U.S.
The U.S. Dollar Index topped in January 2017. By March 2017, it became apparent to the public that Trump could not cancel NAFTA. But many of these top hedge fund managers have deep connections within Washington (not to mention that Trump is friends with many top Wall Street executives). These fund managers must have known by January/February that Trump would not cancel NAFTA. Hence, these large funds/investors dumped the USD’s “Trump rally” very early in 2017.
In other words, the original reason for the USD’s “Trump rally” is gone.
Do you want a free trading strategy that can double your profits?