Some investors in certain asset classes are gradually losing enthusiasm for the 'Trump trade' as they question whether Trump, as the President of the USA, will push forward his ambitious tariff proposals.

As of the Thursday close, the USD has erased most of its post-election gains, and after two days of sharp volatility, US bond yields have also returned to a recent range.

These actions indicate that as investors weigh whether Trump's policies align with his campaign promises, the market may experience fluctuations. As market turbulence subsides, focus is shifting to other significant events.

Vishnu Varathan, Chief Economist and Strategist at Oversea-Chinese Banking Corporation (OCBC) in Singapore, said, 'Even the most fervent 'Trump trade' investors are taking a step back now and considering whether the bet is too high at this point. Traders are pondering the execution and how some of his policies will be effectively disseminated.'

A key question on investors' minds is how much of Trump's threatened tariff measures will actually materialize. Some are also taking profits, including trades betting on a rise in the USD and a fall in US Treasury bonds, which performed well earlier this week on expectations that Trump's policies would stimulate inflation and maintain rates at higher levels.

As doubts begin to spread, assets seen to benefit under Trump's administration have essentially been consolidating after rising post-election. The US stock market is an exception. Bitcoin, which soared to all-time highs following Trump's election, has seen little change in its price. The Bloomberg USD index rose about 0.1% on Friday. The 10-year US Treasury yield held at 4.33%, with the Fed's rate cut earlier helping to calm some of Wednesday's gains.

However, according to Royal Bank of Canada's capital markets, these trades could regain momentum. The EUR is an asset sensitive to Trump's tariff risks, falling 0.2% earlier on Friday after a 0.7% rise on Thursday.

If the Republicans maintain control of the US House of Representatives, the resulting "red wave" will pave the way for Trump's tax cuts, immigration, and trade policies, as well as his confirmation of candidates.

Alvin Tan, Capital Markets Asia Forex Strategist at Royal Bank of Canada, stated, "People are skeptical about whether Trump will actually implement his proposed policies, especially his tariff policy. However, this sentiment may be temporary, as the market underestimates Trump's influence on trade policy - the US President has broad power to implement import tariffs."