USD looks set to ease near term – Westpac

In view of the Richard Franulovich, Research Analyst at Westpac, the USD looks set to ease near term, a test of support near 99-100 likely, ditto for the 10yr which should head to the bottom of the 2.30%-2.60% range.

Key Quotes

“With the Fed still signalling a gradual scenario for rate hikes and appetite for a quicker trajectory seemingly low it’s not clear a continuing strong run of data near term will necessarily will provide the USD with any meaningful support.”

“Watch the repeal and replacement of Obamacare. Delays here will push out the timetable for tax reform/tax cuts/infrastructure and will provide an early acid test of the cohesion of the Republican Party. High risk that tax reform could run afoul of challenging political realities: even if Senate filibuster risks can be dodged via the 2018 reconciliation bill (needing just a simple majority vote) great swathes of the Republican Party remain lukewarm on infrastructure, border adjusted taxes and funding spending plans by gutting government agencies.”