From the Trump Bump to the Trump Dump: How Does Geopolitical Risk Affect the Behavior of Financial Assets?

From the Trump bump to the Trump slump: a few factors appear to now be working to accelerate the shift away from US assets.  Bloomberg has a succinct report here: (https://www.bloomberg.com/news/articles/2025-03-09/us-markets-are-trailing-the-world-as-aura-of-america-first-fades?srnd=homepage-americas)

But what’s interesting from my firm’s perspective – and the data we generate – is how the currency markets reacted to Trump’s win last year.

This case study published by the National Bureau of International Statistics looked at exchange rate adjustments during the first week following the US election results.  Using three measures of exchange rate depreciation and 73 currencies against the USD, among the findings were the correlation between the depreciation rate after a week from the initial news and the ICRG institutional score was positive and significant at the 1 percent level.

Lots of nuances in the findings.  Have a look: (https://www.nber.org/system/files/working_papers/w33193/w33193.pdf)

With over 7.5 million back tested risk points – and appearing in over 1,000 published works – PRS’ data series continues to produce meaningful empirical findings, profitable asset allocations, and informed corporate planning and valuation.

No other geopolitical risk firm occupies this position in the industry.

Our clients know it.

Our data drives.

The PRS Group
www.PRSGroup.com
www.christophermckee.net

CHRISTOPHER MCKEE, PHD CHIEF EXECUTIVE

Christopher McKee is PRS’ CEO and Owner. An international political economist, global investor, entrepreneur, and author, Chris received his PhD from Queen’s University (Canada) and has been involved in the field of geopolitical risk, limited recourse financing, and private sector development for the past 25 years.