Investors expect that even if Trump wins the US election, his plan to devalue the dollar looks "highly unlikely" to succeed because it will be undermined by policies such as tariffs and tax cuts.

In recent weeks, the former president and his running mate JD Vance have talked up the benefits of weakening their own currency to promote manufacturing and reduce trade deficits.

But strategists warn that devaluing the dollar could be costly and short-lived, with policies such as populism, which levies tariffs on foreign goods, offsetting its impact.

Michaël Nizard, a fund manager at Edmond de Rothschild, said: "There is a big contradiction in the market right now. Trump has been emphasizing a weaker dollar, but his policies should support the dollar, at least in the short term."

Last week, Trump told Bloomberg that the US has a "big currency problem" that imposes a "great burden" on manufacturers selling goods overseas.

In his speech at the Republican National Convention last week, Vance outlined his vision for America, which is centered on a weaker dollar - rebuilding domestic manufacturing and reversing some of the globalization trends of the past few decades.

Although the dollar has recently fallen as Trump calls for its devaluation, the currency has risen 15% against a basket of currencies since Biden took office in January 2021. The US trade deficit increased by a third from 2019, reaching $773 billion last year.

Shahab Jalinoos, head of G10 currency strategy at UBS Group, said the president has no obvious way to devalue the dollar. "The fundamental problem is that people don't feel the dollar is overvalued," he said.

One major obstacle Trump and Vance face in weakening the dollar is that their other policies may support the currency.

Trump has said that if he returns to the White House, he wants to impose a 10% tariff on goods from other countries.

Strategists say this will place a greater burden on currencies outside the US because the cross-border trade of these countries is larger relative to their economic size.

This suggests that high tariffs will damage non-US economies more, curb their growth, and weaken their currencies. Last week, European Central Bank President Lagarde made it clear that US tariffs could push the ECB to cut interest rates and depreciate the euro.

For the US, Trump's tariff policy may also increase domestic costs, push up inflation, and keep interest rates high.

Although the impact is difficult to predict, Steve Englander, global head of G10 foreign exchange research at Standard Chartered, estimates that Trump's tariff policy, without second-round effects, could raise prices by 1.8% in two years.

James Lord, global head of foreign exchange at Morgan Stanley, said: "All else being equal, high tariffs will lead to a stronger dollar, especially if trade partners retaliate in the form of tariffs, which will bring additional growth risks to the global economy."

Trump also said he will extend the expiring tax cut policy next year and hinted at further tax cuts. This could increase pressure on the US budget deficit and slow down the pace of interest rate cuts by the Federal Reserve, conflicting with the intention of devaluing the dollar.

Strategists also warn that other options for Trump to devalue the dollar will be limited by global market turmoil.

Since the Plaza Accord in 1985, the US has never attempted to devalue the dollar, which achieved some success and was supported by a drop in US interest rates.

Trump may put pressure on the Federal Reserve to lower interest rates, even though weakening the Fed's independence is not his official policy. However, this is likely to alarm the market.

George Saravelos, director of foreign exchange research at Deutsche Bank, calculated that the dollar would have to devalue by as much as 40% to offset the US trade deficit.

"The cost of destruction is so huge...the market will produce a powerful counterforce," said Edward Al-Hussainy, a global interest rate strategist at Columbia Threadneedle. He added that any intervention aimed at weakening the dollar is "highly unlikely".

One way to weaken the dollar is for the United States to use the Treasury Department's Exchange Stabilization Fund. However, the fund has about $200 billion in assets to buy foreign currency, and analysts are concerned that this money will be quickly used up.

"This is much harder than they imagined. Japan conducted a very, very small intervention a month ago, spending $70 billion. What was the effect?" said Ingram.

Trump and Pence may also face questions from voters. "The most obvious way to devalue the dollar is for American economic exceptionalism to fail," said Josh Gelernter. The dollar remains the world's reserve currency and a safe haven in times of economic turmoil. One of the Republican Party's promises for 2024 is to "maintain the dollar's status as the world's reserve currency".