USD: What’s The Trade Into Comey’s Testimony Next Week? – TD

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The US dollar has been moving according to the political flow of news in the US. The Comey memo brought the greenback down and the appointment of a special counsel helped it stabilize. What’s next?

Here is their view, courtesy of eFXnews:

TD Research notes that as the USD has lost ground as of late, it has nearly unwound the Trump trade and such a price action fits within the script on a shift towards trade protectionism.

“That is, the greenback would underperform other “reserve” currencies but EMs and high-beta G10 would slide on faltering risk appetite,” TD adds.

In addition, TD notes that while the recent news flow has created a lot of noise, the prospects of imminent action on the US political front is very limited at this point.

In that regard, TD thinks that the market reaction to the recent news flow was likely exaggerated by the key trading theme: short vol, long carry and looking to hedge with short USD/JPY.

“Still, the key point now is these events could jeopardize economic reform so we look to hold short USD exposure into Comey’s testimony next week,” TD argues.

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About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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