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The Trump Effect on Currencies

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Chart: The Trump Effect on Currencies

The Trump Effect on Currencies

Rhetoric has already had an impact on currencies in a big way

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Targeting companies or entire nations on Twitter is an unprecedented and controversial method of communication for a President-elect – but one can’t argue with its effectiveness so far.

In today’s chart, we take a look at Donald Trump’s rather unconventional form of “monetary policy”, and how it has potentially influenced the U.S. dollar and five other major currencies since his election in November.

Ready, Aim, Tweet

A preview of President-elect Trump’s “America First” directive can already be seen on Twitter.

Trump’s infamous account, which is followed by 18.8 million people, is being used every day to highlight the potential winners and losers of future policies.

And markets are listening.

Currency% Change (vs. USD)
Russian Ruble7.7%
Canadian Dollar0.4%
Chinese Yuan-1.5%
Euro-5.0%
Mexican Peso-13.4%

The above table shows change in the value of foreign currencies against the U.S. dollar between November 7th, 2016 and today. To be fair, it is worth noting that oil prices have also rallied over this time, and oil also has a pronounced effect on some currencies.

Individual Cases

Central to “America First” is a Trump-branded form of protectionism, which aims to keep jobs and dollars in the U.S at all costs. The President-elect has repeatedly blasted China for currency manipulation, as well as automotive companies which seek to produce cars in Mexico.

China, as one of the world’s major economic powers, has some leeway in any war of words with Trump. While the country sends 18% of its exports to the United States, it could also theoretically benefit economically with the U.S. taking a step back from foreign entanglements. China also holds $1.12 trillion of U.S. treasuries, which gives it some additional leverage.

On the other hand, Mexico has a lot more to worry about. The country sends 80.3% of its exports north of the border and could conceivably lose significant amounts of business if NAFTA is scrapped and tariffs are re-introduced. As a result, even with oil’s gains over the last two months, the peso has dropped -13.4% in value since Trump’s election in November.

An Unlikely Friend

On the opposite side of the spectrum, Trump has been making moves to warm up relations with Russia – a protectionist country that isn’t really a “threat” to U.S. jobs.

Russia, which has been on Trump’s “good side” so far, has had its ruble trade 7.7% higher since the election. These gains partially reflect the future easing of sanctions that were put in place after Moscow’s aggression toward Ukraine in 2014.

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Will Tesla Lose Its Spot in the Magnificent Seven?

We visualize the recent performance of the Magnificent Seven stocks, uncovering a clear divergence between the group’s top and bottom names.

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Will Tesla Lose Its Spot in the Magnificent Seven?

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

In this graphic, we visualize the year-to-date (YTD) performance of the “Magnificent Seven”, a leading group of U.S. tech stocks that gained prominence in 2023 as the replacement of FAANG stocks.

All figures are as of March 12, 2024, and are listed in the table below.

RankCompanyYTD Change (%)
1Nvidia90.8
2Meta44.3
3Amazon16.9
4Microsoft12
5Google0.2
6Apple-6.7
7Tesla-28.5

From these numbers, we can see a clear divergence in performance across the group.

Nvidia and Meta Lead

Nvidia is the main hero of this show, setting new all-time highs seemingly every week. The chipmaker is currently the world’s third most valuable company, with a valuation of around $2.2 trillion. This puts it very close to Apple, which is currently valued at $2.7 trillion.

The second best performer of the Magnificent Seven has been Meta, which recently re-entered the trillion dollar club after falling out of favor in 2022. The company saw a massive one-day gain of $197 billion on Feb 2, 2024.

Apple and Tesla in the Red

Tesla has lost over a quarter of its value YTD as EV hype continues to fizzle out. Other pure play EV stocks like Rivian and Lucid are also down significantly in 2024.

Meanwhile, Apple shares have struggled due to weakening demand for its products in China, as well as the company’s lack of progress in the artificial intelligence (AI) space.

Investors may have also been disappointed to hear that Apple’s electric car project, which started a decade ago, has been scrapped.

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