USD: Some downside risks alleviated - Westpac
|A three month extension in funding and a three month increase in the debt ceiling to Dec alleviate some downside risks for the USD but do not entirely eliminate them, feels Richard Franulovich, Research Analyst at Westpac.
Key Quotes
“The Fed is sure to announce balance sheet tapering Sep 20 but they likely cut PCE and neutral rate forecasts too, hardly USD positive. The 4 CPI reports before the Dec 15 Fed must show a definitive uptrend - a high bar - to satisfy the growing tribe that are wary about a more sustained inflation undershoot.”
“Key long term USD risk - Trump’s tax overhaul where the path to success continues to narrow. Congress is sure to balk at the sheer size of the package – with personal and corporate tax cuts amounting to more than $5trn alone. Major fissures have opened between President Trump and GOP leaders. Multiple flashpoints including hurricane risks, North Korea and the ongoing special counsel investigation into Russia and Trump threaten top push tax cuts onto the backburner.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.