30 April 2025

There is significant uncertainty about the outcome as there are many possible scenarios for both country and sector tariffs and trade deals with countries. The uncertainty may have a negative impact on growth via falling confidence, as it could lead to postponement of consumption and capital expenditure.  At this point, there are indications in survey data that consumers and business may become more careful, but there is no real activity data to support that currently. Due to the increased downside risks to US growth, the US dollar has weakened. In the short run economic and monetary policy developments will continue to drive the dollar. In the longer run we will likely see a continuation of diversification of central bank reserves which could lead to falling demand for the US dollar, even if the dollar is not challenged as the world`s reserve currency.  A basket of currencies will likely benefit. Gold will likely benefit as well, as we expect a continuation of rising gold holdings among especially emerging market central banks.