If I look underneath the hood of the impending trade war and analyse what is happening with global capital flows, I suspect that what we are seeing on the tariff front is likely to spur a material capital repatriation from the US towards Europe and elsewhere. This is going to manifest itself through a weaker USD exchange rate, and subsequent appreciation for EUR and Japanese yen exchange rates. In short, the US administration is going to realise that there is another side to the trade war coin, and that’s a change in capital flows. First off, let’s look at what…

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