Why One Trader Thinks “The Fed Is About To Take Out The Last Pillar Supporting The Dollar”
From Mark Cudmore, former FX trader who now writes for Bloomberg
ZeroHedge.com
Feb 1, 2017
Fed Can’t Help Dollar Bulls in Denial
Expect the Fed to take out one of the last pillars of dollar support today.
Dollar bulls are still not capitulating despite it being on target for a sixth consecutive week of losses. While some doubts are finally starting to creep in, the majority of analyst notes this week suggest the FOMC can put the dollar uptrend back on track. I’m surprised.
It’s hard to see how the Fed can be hawkish given the economic policy turmoil of the last couple of weeks.
All measures taken so far by Trump’s administration are negative for growth rather than reflationary. This is particularly pertinent when put in context of how optimistic expectations were only two months ago.
The pro-growth policies may come soon but, importantly, there’s no sign of them yet, and the FOMC is obliged to deal in facts rather than speculation and hope.
The economy is nowhere near running “hot.” Inflation is picking up but still hasn’t reached target, let alone given any indication it might run away to the topside.
The Rest…HERE
