The US dollar remains on a recovery path. One of the reasons is the hope that tax reform can pass. Can the greenback extend its gains?
Here is their view, courtesy of eFXnews:
BTMU FX Strategy Research notes that focus for US dollar performance this week will be the expected announcements from the so-called “Big 6†tax negotiators.
“They are expected to announce plans in the middle of this week about the shape and specifics of tax legislation. They are expected to provide top -line proposal details about rates and timing.
We continue to believe that the main upside risk to our bearish US dollar outlook for the year ahead is if tax reform proves more effective than expected at boosting the US economy. Without such a positive shock for the US economy, we remain unconvinced that the US dollar can stage a more sustained rebound.
Nevertheless that does not mean that the US dollar can’t rebound temporarily. The latest IMM report clearly highlights that speculators have built up short US dollar positions in recent months which could be lightened in the near-term now that the US dollar has lost some downward momentum,†BTMU argues.
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