COMMENT-Dollar slump is a win for Trump and may spell trouble

March 5 (Reuters) - The sudden dollar slump is a win for Donald Trump as it provides stimulus for the U.S. economy while effectively tightening monetary policy aboard, and it's cheapening U.S. exports at the outset of a trade war.

It is no longer a case that only U.S. imports hit by tariffs are more expensive, all imports into the United States are. This unexpected windfall will give the U.S. leader the room he needs to push other nations harder in the current dispute.

Where the risk averse connotations of a trade war should logically boost the value of the global reserve currency, which could have derailed his plans by mitigating the effect of tariffs, it has surprisingly dropped almost 3% since tariffs were imposed Tuesday.

The strength of U.S. stock markets, which have also bounced following modest corrections of their prior rises, could also encourage the U.S. leader to push harder to achieve his aims. It may well take a truly risk averse shock that leads to sustained and deep drops for equities to change the situation.

Right now that is anything but the case and without cause to worry, traders won't see reasons to hold dollars. They may sell them, leaving them woefully positioned should protectionist polices result in the risk averse movement they should logically lead to.

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