Will central banks get a helping hand from fiscal policy as talk of deficit spending gains momentum? Chatter of govt stimulus from Germany and now talk of tax cuts from the White House are making the rounds. The Washington Post reported that the White House may push for a temporary cut in the 6.2% Federal payroll tax. Trump backed the idea today. GBP was the 2nd strongest currency of the day (behind CHF) after German Chancellor Merkel said the EU would consider practical solutions regarding the post-Brexit bakcstop. EURGBP dropped back near session lows but GBPUSD clinged near the highs. Below is the English and Arabic videos combined in one video, highlighting yesterday's Premium trade.

Both reports from Berlin and Washington highlight the conditional nature of the promises. Both are framed as options governments would only consider in the event of intensifying economic weakness. The trouble with the US report is that it would need to get through Democrat-controlled House without having to give up something the Republican-controlled Senate would agree to.

Ashraf predicted two weeks ago in this tweet that below tax cuts would resurface from the White House.

fxsoriginal

In other news (or more of the same), Trump stepped up criticism of the Fed once again, calling for 100 basis points of easing and fresh QE. That chatter is increasingly falling flat in the markets but it highlights the risks for the Fed, including the risks around the FOMC Minutes on Wednesday.

Fed dissenter Eric Rosengren appeared on TV Tuesday and reiterated that he wasn't prepared to ease further because the FOMC is currently on track to meet its objectives. That said, he also indicated he would be willing to switch to cuts if a foreign slowdown was causing enough domestic weakness to significantly weaken his forecast for 2% US growth.

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.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD rebounds after dismal US PMIs

EUR/USD is trading closer to 1.0850, rising in response to weak US PMIs, with the services one pointing to contraction. Earlier, German Manufacturing PMI beat estimates. 

EUR/USD News

GBP/USD advances to 1.2950 after US data

GBP/USD is trading around 1.2950, taking advantage of US weakness stemming from a downfall in Markit's Services PMI in the US. In Britain, the Manufacturing PMI exceeded estimates. 

GBP/USD News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Consolidation process underway

The Crypto board continues to be immersed in an emotional leg-breaking, consistently punishing the emotional state of the traders with its continuous changes of direction.

Read more

XAU/USD unstoppable, breaks to fresh 2020 highs, approaching $1650/oz

XAU/USD is trading in an uptrend above its main daily simple moving averages (SMAs) while breaking above a bull channel. Gold is printing fresh 2020 highs hitting $1646.64 per ounce on an intraday basis.  

Gold News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex Majors

Cryptocurrencies

Signatures