USD: Take a beating – AmpGFX

Greg Gibbs, Director at Amplifying Global FX Capital, notes that the USD is taking a bit of a beating this week, and US yields are lower following the Fed Minutes on Wednesday, even though the minutes said that many FOMC members want to raise rates “fairly soon”. 

Key Quotes

“However, the minutes offered a pretty scattered view on the outlook, and said US government policy direction is generating heightened uncertainty.  It suggested that near-term economic activity, in particular, business investment, may require progress on tax and regulation reform.  Alas, evidence of progress is lacking.”

“Furthermore, the Fed commented four times in its minutes that strength in the USD was a risk to its growth and inflation outlook.”

“Comments made by US Treasury Secretary Mnuchin and President Trump on Thursday may tend to weaken the USD further.  They reinforced the impression that the administration prefers a weaker USD, is focused on “leveling the playing field” on trade, and highlight the difficulties in developing and passing tax policy legislation.”