- Two Republican Senators withdrew support for Trump-backed healthcare bill
- Second healthcare reform failure casts doubt on other Trump platform goals
- US Dollar falls alongside yields, stock futures as the “Trump trade” unravels
Check out our analysts’ 3Q 2017 market forecasts for the US Dollar and stock indexes on the DailyFX Trading Guides page.
The US Dollar, Treasury bond yields and S&P 500 futures fell in tandem in early Asian trade after reports crossed the news wires announcing that two Republican senators had decided not to support the White House-backed health care reform bill, leaving it with insufficient votes for passage.
The announcement by Republican Senators Mike Lee and Jerry Moran to deny support for the bill leaves Republicans without enough votes to pass the replacement for the Affordable Care Act – also known as “Obamacare” – that President Donald Trump had promised during his campaign.
US stocks rallied after Trump’s election win, cheered by his focus on tax cuts, deregulation and infrastructure spending. The US Dollar followed on expectations that expansionary fiscal policy will boost inflation and force the Fed into a steeper rate hike cycle.
The administration’s inability to rally its own party behind its agenda, as demonstrated by the failure of healthcare reform, has thrown this so-called “Trump trade” into reverse. Traders appear to be losing confidence in the President’s ability to deliver, not just on healthcare but on the rest of his platform too.