Search ForexCrunch

Richard Franulovich, head of FX strategy at Westpac, suggests that DXY appears poised for a breakout to new highs near term while Trump impeachment being an overstated risk.

Key Quotes

“Trump impeachment is an overstated risk: the procedural steps to a resolution in the House are long and then there is the requirement for the Senate to vote by an almost insurmountable 2/3 majority. The prospect of a more gridlocked Congress is moot – the upcoming election year was never going to see any signature legislation.”

“The hurdle for another Fed insurance cut 30 Oct is understandably high too. Even reliable 2019 voting dove Chicago President Evans said he doesn’t see a need for further cuts, while a relatively encouraging round of data of late will cement the FOMC’s central tendency for continued above trend growth. That USD positive scenario and a steady Fed hand 30 Oct could admittedly shift quickly if exogenous risks materialise; notably Brexit and if ministerial US-China trade talks slated for 10-11 Oct produce nothing tangible. If so, Trump will forge ahead with a lifting of the 25% tariff on $250bn in China imports to 30%.”