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- The EUR trend is changing to positive, as the US is being dumped by the investors
The EUR trend is changing to positive, as the US is being dumped by the investors
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Loading...The dollar's losses have been the euro's gains, and some strategists expect to see the migration into European assets continue with heightened political uncertainty in the U.S. and doubts about the Fed.
Risks from the French election are out of the way, and the European economy is improving, sending the euro higher. The gusher of funds into European stocks is also driving buying in the common currency, at the same time the dollar is weakening on a recent batch of disappointing U.S. economic data and rising concerns about the political agenda.
Stocks were sharply lower and investors moved into bonds Wednesday as controversy in Washington raised concerns that the Trump agenda of tax reform and fiscal stimulus will be slowed down. The latest uproar was over reports that President Donald Trump asked former FBI Director James Comey to end his investigation into former national security advisor Michael Flynn.
The dollar has become a play on reflation, and its decline is linked to that, Katzive said. "It's a combination of the data surprises continue to weaken and the political noise as well," he said, adding he's still bullish on the dollar and expects it to stabilize and recover.
The dollar index, based on a basket of currencies, fell below 98 on Wednesday, its lowest level since before the November election, and much of that move had to do with gains in the euro. The greenback surged after the election of Trump, whose fiscal and tax policy was seen as a boon for the U.S. economy, but now there is uncertainty around the timing of legislation on those policies.
Source: Bloomberg Pro Terminal
Junior Trader Stefan Panteleev
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