Dollar not unfolding as expected - Scotiabank

Analysts at Scotiabank explained that the Trump dump reflects market disappointment that more information on the new administration’s economic and fiscal plans were not divulged yesterday which has cast some doubt over the broader reflation trade (higher yields, stronger equities, rising USD).

Key Quotes:

"We reiterate, however, that little or nothing has changed from a macro-economic point of view at this stage but further declines in US yields are liable to weigh on the USD to an extent. This was not the performance we expected for the DXY in January, which is typically a strong month for the USD. But it is the performance we are getting and we have to accept that developments are not unfolding in the manner we anticipated."

"It is early days for the Trump administration, however, and still early in the year.

Our broader thesis of USD remaining relatively strong on the basis of relatively superior growth and relatively tighter monetary policy over the course of the year remains intact."

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 securities. 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 Forex 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.