The US Dollar was rocking and rolling on the reshuffling at the White House. Tillerson and Cohn out, Kudlow and Pompeo in. How should this be traded? Here is the view from Credit Suisse.
Here is their view, courtesy of eFXnews:
Credit Suisse Research discusses the USD outlook and maintains a bearish bias, arguing that the appointment of the White House’s new economic adviser, Larry Kudlow is not a game changer for the negative USD prospects.
We would be inclined to fade any White House personnel driven rebound in the USD, as the announcement of the executive order blocking the acquisition of US tech firm Qualcomm on national security grounds represents a significant escalation of the US administration’s protectionist stance, one that might further exacerbate the funding outlook for the US’ widening current account deficit. In this regard, the decision to block this deal brings further weight to our BOP-based case for further USD weakness
Against this backdrop, we continue to see no reason to deviate from our core bearish view on the USD. In particular we view the expansion of the US administration’s protectionist reach beyond the trade balance and to the capital account as an ulterior source of volatility and of USD weakness,†CS argues.
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