United States, Donald Trump | – Donald Trump is very bad news for the krone

NORDEA/MAJORSTUEN (Nettavisen): On 5 November, the battle will take place in the USA – and the outcome may determine how much you get to mess with.

The winner starts his new era as “the world’s most powerful leader” on 20 January 2025.

– Next year, Donald Trump may return as president of the United States. Unfortunately, it is bad news for the krone exchange rate. Historically speaking, Trump has not been good news for the krone, says senior strategist Dane Cekov at Nordea Markets to Nettavisen.

For the record, it’s not yet official that Donald Trump will be the Republicans’ first choice, but everything points to it.

The dollar has strengthened 83 per cent against the krone since April 2014, and eight per cent just since the New Year.

Cekov has no doubt that the dollar is the most important currency and that it is the Fed (the American central bank) that we must keep an extra close eye on.

– We will not see a significantly stronger krone without the dollar weakening broadly and it is a bit difficult to imagine now, says Cekov.

– Weak krone and high interest rates for a long time

– If Trump comes back and we get a new trade war and a lot of noise, it speaks for a weaker krone for longer and unfortunately also higher interest rates in Norway over time.

– Can you elaborate on why Trump is bad news for the Norwegian krone?

– Donald Trump will introduce high tariffs; 10 percent universal duty on all goods entering the United States. He will also increase the tariff by up to 60 percent against China. This is not good for the krone exchange rate. says Chekov.

And it doesn’t stop there: The fact that Trump wants to open up more exploration for oil in the US doesn’t help at all.

– Higher inflation

– The combination that Trump at the helm will increase the conflict between the countries, reduced oil prices because he gives the green light for more oil exploration, and not least all these tariffs, will also keep inflation in the US up. All this points in the direction of higher inflation and interest rates in the US.

These conditions interfere directly with our own economy.

– These are three things that historically have been very bad news for the krone exchange rate, at least if they come at the same time.

– Is it likely that Donald Trump will win?

– When we look at the latest opinion polls, Trump leads. There is a real possibility and a very high probability that he will return. Therefore, the krone exchange rate will remain weaker than what we have been used to going forward.

– Should make sure

For most people, it is naturally difficult to do anything about this, but companies should prepare, he believes:

– Already now you should think about what opportunities and insurances you can take out to avoid being hit hard by a scenario where the krone exchange rate continues to weaken. Although you and I notice the weak krone very well on holiday abroad and when the goods in the shops become more expensive, it is generally good for the Norwegian economy.

Light in the tunnel? Absolutely:

– Last year, the krone exchange rate was a burden for everyone except the exporters. This made everything more expensive, the interest rate peak higher, but this year we get a small plaster on the wound with a high nominal wage growth of 5.2 per cent wage growth – i.e. increased purchasing power even if the interest rate is not cut.

In sum, the Nordea expert believes that there may be reason to enjoy an ice-cold lemonade:

– We are quite optimistic and believe that people will have more to deal with this year, even if there was no interest rate cut.