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."
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
