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More US Debt May Not Hold Back Dollar

More US Debt May Not Hold Back Dollar

Jason Shemtob,

THE TAKEAWAY: The US Federal Budget showed a deficit of $203.5 billion in February > Government deficit is/remains a concern, but USD has stayed strong > USD Outlook Bullish

The US Treasury’s Federal Budget came in at a deficit of $203.54 billion for the month of February according to the most recent budget report, slightly better than estimates of a $205 billion shortfall. This deficit continues the strong trend of growing US debt, with only 3 months of federal surplus over the last 4 years. The dollar remained relatively unchanged following the data release with the USD/JPY trading at 96.064 as of this report.

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While the ballooning US Federal deficit continues to be a primary concern for the United States, the US dollar appears unaffected as of recently, up 7% over the last 6 months according to the Dow Jones FXCM Dollar Index. Even with the growing deficit, and what appears to be Washington’s inability to alleviate it, the USD should continue to gain due to its safe haven status and what appears to be real economic growth in the US.

USD/JPY (120 Day Chart)

More_US_Debt_May_Not_Hold_Back_Dollar_body_Picture_1.png, More US Debt May Not Hold Back Dollar

Created by Jason Shemtob using Marketscope 2.0

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