News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Mixed
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • The New Zealand Dollar’s correction lower against the Japanese Yen and US Dollar may be at an end, as NZD remains constructively perched above key chart support. Get your $NZD market update from @DanielGMoss here:https://t.co/8GiKFTfrMP https://t.co/d2nKfhTfqZ
  • Heads Up:🇦🇺 Ai Group Manufacturing Index (SEP) due at 22:30 GMT (15min) Previous: 49.3 https://www.dailyfx.com/economic-calendar#2020-09-30
  • Heads Up:🇺🇸 Fed Kaplan Speech due at 22:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-09-30
  • FDA expands U.S. safety inquiry into AstraZeneca vaccine: Reuters via BBG
  • I don't think there was even a meaningful 'hope' from the market that this was going to get through, so likely no risk retreat as part of an earnest disappointment https://t.co/9plviuDq0Y
  • House delays stimulus bill vote to allow for more time on talks - BBG
  • SA’s official Q2 unemployment rate at 23.3%, down from 30.1% in Q1. Get your $USDZAR market update from @RichardSnowFX here: https://t.co/coIzNSve7u https://t.co/bAGMxZVYYN
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.50% 🇨🇦CAD: 0.49% 🇦🇺AUD: 0.47% 🇯🇵JPY: 0.21% 🇨🇭CHF: -0.15% 🇪🇺EUR: -0.19% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/84GPyworwF
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Gold: -0.58% Oil - US Crude: -0.84% Silver: -3.68% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/xsYcuQg0ug
  • See my #2020election special take on the following question: Will Trade Wars Persist After the US Election? https://www.dailyfx.com/forex/fundamental/article/special_report/2020/09/30/will-trade-wars-persist-after-the-us-election.html
US Dollar Gains as Tax Plan Hopes Rekindle Trump Trade

US Dollar Gains as Tax Plan Hopes Rekindle Trump Trade

2017-04-26 09:50:00
Ilya Spivak, Head Strategist, APAC
Share:

Talking Points:

  • Aussie, NZ Dollars continue to drop as Fed rate hike bets rebuild
  • US Dollar gains as Trump White House readies tax plan proposal
  • Failure to placate House GOP may see “Trump trade” unravel

The Australian and New Zealand Dollars continue to sink as a recovery in Fed rate hike bets continued to weigh against rate spread-sensitive currencies, extending yesterday’s trade dynamics. Appropriately enough, the US Dollar outperformed, with the benchmark unit tracking Treasury bond yields upward.

The markets interpreted the outcome of the first round of the French presidential election as neutralizing a potent risk aversion trigger and so removing a major threat to the Fed’s 2017 rate hike ambitions. Indeed, the priced-in tightening implied in Fed Funds futures is now at its steepest in three weeks.

The spotlight now turns to the announcement of a White House tax reform proposal. This is a pivotal component of the so-called “Trump trade”, a post-election narrative that foresaw fiscal stimulus including tax cuts and infrastructure spending stoking inflation and pushing the Fed to reduce accommodation faster.

Traders will closely scrutinize the plan for its pass-ability. Indeed, worries about the possibility that conservatives in the House of Representatives will scuttle any effort that grows the deficit have already emerged. Failure to at least acknowledge these concerns in the announcement may sour optimism.

The fate of the controversial border adjustment tax (BAT), a scheme meant to boost exports and penalize imports, may be another source of division between the administration and its own Republican party members in the legislature. The latter likes it; the former apparently less so.

The President’s aborted healthcare reform effort – the AHCA – raised doubts about his ability to turn campaign promises into policy but didn’t quite speak directly to the “Trump trade” hopeful. Needless to say, tax cuts are another matter. A proposal that looks like it too may fizzle will bode ill for the Fed outlook and USD.

Have a question about the currency markets? Join a Trading Q&A webinar and ask it live!

Asia Session

US Dollar Gains as Tax Plan Hopes Rekindle Trump Trade

European Session

US Dollar Gains as Tax Plan Hopes Rekindle Trump Trade

** All times listed in GMT. See the full DailyFX economic calendar here.

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To receive Ilya's analysis directly via email, please SIGN UP HERE

Contact and follow Ilya on Twitter: @IlyaSpivak

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES