US President Donald Trump is in deeper trouble. Special Counsel Robert Mueller will expand his probe into Trump’s personal businesses. The president never released his tax returns and some suspected he has something to hide. This is now under investigation and is a significant escalation.
The dollar advanced in late 2016 on hopes that Trump will unleash high growth via tax cuts, infrastructure spending, and deregulation. So far, the health care bill is not really going anywhere and with this deeper trouble, any other policies could remain further away.
The dollar had already reversed gains against many currencies since early 2017, but things are accelerating now.
- EUR/USD is trading above the 2016 high of 1.1620 and has already reached 1.1656. The ground was fertile after Draghi’s unconvincing dovishness. The bigger picture is higher growth and better political stability in Europe, something we haven’t seen for years.
- USD/JPY is dropping in range to 111.70. Further support awaits at 110.80. The yen strengthens despite the BOJ’s best efforts to keep it lower.
- GBP/USD is hugging 1.30. Brexit and Trump were the huge political events of 2016. The battle of the currencies is held around this level. Brexit seemed worse than Trump, but nothing is certain, especially now.
- USD/CAD: The pair is at the lowest in 14 months, enjoying optimism from the Bank of Canada and also higher oil prices. Trump’s agenda to renegotiate NAFTA, a move that may hurt Canada, does not seem to top anyone’s agenda right now.
- AUD/USD: Also here, the A$ enjoys an optimistic central bank. Compounded with the Trump trouble, it is reaching the highest since 2015.
Will the dollar continue falling? Once the political storm settles, the focus will return to the central bank. And also here, the greenback sees less support, as inflation is not going anywhere fast.
And what’s next for Trump? In case he doesn’t end his term, here are a few articles to consider:
from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/pZzT_5Z1VCU/
from Online Forex Trading Resource
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