Donald Trump’s victory in the US presidential election last week is probably best described in his own words as ‘Brexit plus plus plus’. Like the surprise vote for Brexit in the UK’s June referendum, none of the polls predicted that Trump would win. As the dust settles, analysts and investors are trying to make sense of what a President Trump means not just for the US economy and political landscape, but for the world. This is not easy to do when it’s not clear exactly what Mr Trump’s policy agenda is.

While campaigning, Mr Trump made a number of sweeping statements including renegotiating free trade agreements, cutting taxes, investing in US infrastructure, building a wall on the US-Mexico border and tightening immigration rules. He also pledged to support the US oil and gas industry. However, there was very little detail on his policies, or exactly how they would be implemented.

Faster US growth, higher interest rates?

At face value, tax cuts and increased investment in infrastructure should boost US growth and create more jobs, which is why equity markets – particularly commodity and industrial stocks – rallied after the initial shock sell-off on Tuesday. Individuals who believe that this is where Mr Trump will focus his attention would do well to invest in US industrial and consumer stocks.

However, Mr Trump’s calls to ‘renegotiate’ free trade agreements and impose tariffs on imports would be negative for American firms that rely on imported goods or components. Faster economic growth and increased household spending would also invariably lead to higher inflation in the US.

If Mr. Trump does stick to his stance on immigration, and deports those workers without papers, this could push up wages across many service industries, also leading to higher inflation. The Federal Reserve would likely increase interest rates faster than most people currently expect. And higher US interest rates usually mean a stronger US dollar.

[Related: How will Brexit impact the UAE?]

What does this mean for the UAE?

For the UAE, which has its currency pegged to the US dollar, this is particularly important, as it would mean interest rates here are likely to rise as well, making it more expensive for both firms and households to borrow money. A strong dirham, while making imports cheaper, would also make it relatively more expensive for foreigners to come on holiday to Dubai and shop here, or to buy property.

Surveys have shown that many businesses in the UAE’s hospitality and retail sectors have already been offering discounts and absorbing higher production costs, to offset the impact of a stronger dirham over the last 12-18 months, and this trend could continue if the US dollar continued to strengthen relative to other major currencies.

Uncertainty will remain high

It is still too early to assess the potential impact of a Trump Presidency on the US, the world economy and the UAE, as many of the promises he made during his campaign may not be easy to implement. Over the next few weeks, there should be announcements over who will hold key posts in the Trump administration. This will give some indication about the direction of economic, defense, energy, immigration and foreign policy under the new leadership. Expect financial markets to remain volatile and headline driven for some time yet.