Weekend Update

Weekend Update

Washington continues to break creative new ground when it comes to political dysfunction. However, the Tump administration took a giant step forward toward achieving the first major legislative victory of his presidency after the Senate passed its tax plan in a 51-49 vote early on Saturday morning

Stock dealers s will be monitoring the tax-sensitive, which should react positively.

In early trade, the Dollar nudged above Friday’s high water marks where tax reform momentum was building before risk aversion reared its head after ABC first reported that Flynn would testify against Trump, citing “people familiar with the matter.”

Probably not the explosive dollar bounces some were hoping for, but there remains a high level of scepticism in financial markets about the real economic benefits vs the budgetary costs within the legislation. And given all the political bluster coming out of Washington these day’s and just how reactive the USD was to risk on Friday, dealers may be reluctant to chase this much higher

Now it’s off to Republican joint Conference to arbitrate the variances between the House and Senate versions. If the legislation gets ratified quickly, there would likely be another dollar bounce, but the longer this drags out, the dollar will probably sell off as political uncertainty has been the greenback’s undoing over and over again in 2017.

Back at” Dysfunction Alley” ( 1600 PENN) While “Rexit” has apparently come and gone; the administration is yet again dealing with another looming government shut down. Dec 8 But, House GOP leaders unveiled a short-term plan over the weekend to avert a shutdown and keep the government open through Dec. 22. But dealing with Bipartisan political wrangling is a real head-scratcher at the best of times, and now that the main obstacle to tax reform has passed, currency trader may look for a rock to hide under for the rest of the year to avoid the political whipsaw.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes