[Click eStock] "Strong Dollar Continues Amid US Protectionism Concerns... Focus on China's Stimulus Measures"

With the rising approval ratings of former U.S. President Donald Trump and growing concerns over the strengthening of protectionism, the dollar continues to strengthen.

On the 18th, Lee Joo-won, a researcher at Daishin Securities, stated, "As confirmed by recent exchange rate movements, the U.S. presidential election issue will dominate the financial market for the time being. The direction and volatility of the exchange rate after the election will be determined."

Although concerns over the Iran-Israel conflict have somewhat eased, former President Trump recently emphasized a protectionist stance by describing tariffs as "the most beautiful words," which acted as pressure for dollar strength. Positive real economy indicators such as the U.S. retail sales in September have also spread expectations that the Federal Reserve's rate cut timing will be delayed.

On the other hand, the European Central Bank (ECB) implemented additional rate cuts in June and last month, and with inflation slowing in the UK, the possibility of a rate cut by the Bank of England (BOE) has increased, causing the euro and pound to weaken. The researcher noted, "The upcoming S&P PMI data to be released next week will influence whether the growth gap between the U.S. and other countries widens further, and whether concerns over employment slowdown will resurface due to an increase in weekly unemployment claims, impacting the dollar's strengthening trend."

China-related variables are also factors to watch. If stimulus expectations are maintained and South Korea's third-quarter growth rate, to be announced next week, proves stronger than expected, it could exert downward pressure on the dollar-yuan and dollar-won exchange rates. The researcher said, "The third-quarter growth rate announcement today, the People's Bank of China's loan prime rate decision next week, and the schedule for the Standing Committee of the National People's Congress (NPC, equivalent to Korea's National Assembly) at the end of this month are planned. In particular, whether the stimulus scale approved by the NPC Standing Committee aligns with the market's average forecast of 2 to 3 trillion yuan will be a key variable for the yuan exchange rate."