Greg Gibbs, founder, analyst, & PM at Amplifying Global FX Capital Pty Ltd, an Australian financial services company explained that political risk is driving down currencies in Turkey, Brazil, the UK and Australia.
Key Quotes:
“Politics is undermining Italian assets and poses a threat to the EUR. However, US assets remain largely unmoved by the US political and legal troubles. Trump has proven his ability to operate through chaos and combat controversy. Even if Democrats take control of the House of Representatives in November and move to impeach Trump, it is very unlikely he will be removed from office, and he will probably only feel emboldened to carry on. The USD has reasserted its strength but its yield advantage has slipped, and recent US economic reports have lost momentum. US equities have proven relatively stable to date, but the risk remains that the US economy, assets and currency a pulled back to the pack. A strong USD will eventually be self-defeating, tightening monetary conditions in the US and globally.”
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