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The US dollar is facing a bumpy ‘yo-yo’ ride
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Having a weakening dollar is a net negative for the US stock market.
PHOTO: REUTERS
To US President Donald Trump, the dollar is like a yo-yo that he can make go up and down. To equity investors, the toy looks broken – and a weaker dollar is now the latest obstacle they have to contend with when valuing stocks.
It has drawbacks. American assets become less attractive, slowing the flow of funds into US companies and driving money to international markets. US manufacturers have to pay more for input materials produced abroad, potentially importing inflation for end products sold at home.
