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Currency war, Donald Trump’s next obsession

"Exchange rates and the economy influence one another in too many ways for any claim that the US foreign deficit stems from the overvalued dollar to be possible. But the US president and his advisors are unperturbed by subtleties of this kind."
Bruno Cavalier, Fabien Bossy ODDO BHF Corporates & Markets, Economy, 02 July 2019

Yes, the dollar is overvalued, Donald Trump is right to say so. The misalignment with its fundamental value is about 10% at present. No, this overvaluation is not the result of a global conspiracy that purportedly unites Mario Draghi and Xi Jinping in a bid to stifle the US economy, as some of the comments made by the US President and his advisors might suggest. A step fall in the dollar would require either a much stronger monetary easing by the Fed than anticipated by the market, or a strong fiscal stimulus in the rest of the world (Germany), or a surge in oil prices. All of the aforementioned seem unlikely.