The US dollar certainly suffered from the revelations about Trump’s alleged intervention with the FBI investigation. What’s next?
Here is their view, courtesy of eFXnews:
TD Research notes that the USD is set to post its biggest one-week loss since November amid a rise in political uncertainty and the associated risks to economic growth and policy implications.
“Our model shows market pricing of the June Fed hike has slipped to 70% from a peak of 89%. We don’t expect the recent political upheaval to derail a June hike,” TD argues.
Strategy-wise, TD thinks that for medium-term investors, the recent dip will likely provide opportunities to buy the greenback ahead of next month’s Fed meeting.
Still, in the near-term, TD notes that interest will be on Comey’s testimony next week that is likely to provide the signal for markets.
“The USD could remain under pressure into the event but the impact of his testimony will be binary: new developments that work against Trump will soak the USD while no news is goods for the dollar,” TD argues.
For lots more FX trades from major banks, sign up to eFXplus
By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.