Experts say that the rebound of the US dollar is difficult to sustain, and Trump's postponement of tariffs is a potential roadblock
After the recent US election, the US dollar has surged, but according to Desjardins Bank's latest economic forecast, this upward trend may not be sustainable.
Experts from Desjardins Bank point out that the rise of the US dollar may only be a temporary phenomenon, especially if the proposed tariffs are postponed to 2025 or 2026. This delay may provide a brief respite for the global economy. In addition, if US companies accelerate overseas purchases before tariffs take effect, this could boost the value of other currencies against the US dollar.
Another factor that may cause exchange rate fluctuations is the changing trend of monetary policy.
Desjardins Bank predicts that the US economy will struggle to maintain its current growth rate, which may prompt the Federal Reserve to implement multiple interest rate cuts. This more cautious policy is expected to address the inflation issues that the Trump administration may trigger.
Desjardins Bank Chief Economist Jimmy Jean said that if tariffs don't take effect until the end of 2025 or even early 2026, the global economy may enjoy a brief respite. If American companies make overseas purchases before tariffs take effect, multiple countries may benefit from it. This will provide a brief boost to many currencies against the US dollar.
Jean added that as the more challenging year of 2026 approaches, the prospects for most currencies may once again dim before the end of 2025.
Daily chart of the US dollar index
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