Trump Tweets Tank in Term Two: Markets Unmoved
Former President Donald Trump is dialing down his social media market mayhem, with only 10% of his recent posts shaking the currency world, proving that fewer Twitter rants may lead to fewer financial freakouts.
In an unexpected development, Trump’s social media strategy appears to be evolving, with the former president's recent posts on sensitive topics causing a mere 10% of the past currency tremors. With only 20 posts last week—though still double January's rate—Trump's words don’t seem to hold the same financial volatility as his earlier tweet storms, where traders would quake at the mention of tariffs. While his followers may still be glued to their screens, it seems the currency markets are now taking his rants with a grain of salt, or perhaps just a pinch of boredom.
During his first term, Trump's prolific tweeting often felt like a roller coaster ride for forex traders, with a thrilling mix of uncertainty and profit. Now, the ride has become considerably less exhilarating, resembling more of a leisurely walk through the park, albeit one filled with the occasional unexpected squirrel. With over 126 posts on sensitive topics since his re-election, the fruits of this endeavor appear to yield less excitement, as only 10% resulted in any significant market reactions.
The highest postings came last week, where Trump sent more than 20 sensitive tweets, doubling January's average output. However, this is still a far cry from the golden days of the 2018-19 trade wars, where he could unleash up to 60 posts per week, sending traders into a frenzy. The markets seem to have developed a more resilient constitution but may still flinch at the mention of tariffs, traditionally the most volatile of Trump’s topics.
Tariffs have consistently stirred the most significant financial reactions, with nearly a third of posts on the matter creating ripples that could turn into tidal waves or, at least, a small splash. For instance, after announcing a 25% tariff, which he later postponed—because sometimes a good scare is all you need—traders saw a drop of more than 2% in the Mexican peso and a dip of 1% in the Canadian dollar.
Meanwhile, Trump’s tweets regarding China have brought about a more nuanced response, leading to market fluctuations that resemble mood swings rather than decisive trends. Depending on the tone of his posts, the yuan experiences mild jitters or full-blown panic attacks. Posts focused on China have caused mixed market reactions depending on their tone, including fluctuations in the yuan.
In light of these developments, one might assume that trading based on Trump's posts could yield significant returns—a fantasy ably crushed by the reality that potential gains are estimated at a meager 4%, provided one is feeling particularly optimistic. In essence, trying to profit from Trump's tweets now feels like attempting to catch smoke with bare hands, or perhaps trying to make a case for why pineapple belongs on pizza—futile and likely to spark debates.
Despite the drop in impact from his social media forays, Trump has not shied away from communicating. He has taken a more direct approach with almost-daily question and answer sessions at the Oval Office. This may not send markets into a tailspin, but it does give traders something new to ponder: are we witnessing economic rehabilitation or just a more dignified form of chaos?
As the former President tries to tighten his grip on currency markets again, the world is left to wonder if he’s realized that the tweets that once set traders ablaze may simply lose their fiery spark in a second term. For now, traders will need to look for other sources of intrigue, perhaps delving into cryptocurrency or finding the next Twitter lightning rod to, once again, feel the thrill of the chase—assuming they can still stifle their yawns in the meantime.