USD: Focus On US Fiscal Should Cut 2-Ways For Markets

 


TD Research discusses the USD outlook around today' confirmation hearing for Treasury Secretary nominee Janet Yellen in front of the Senate Finance Committee.

"Risk markets were greeted kindly on the return from the long weekend. The USD's broadly lower, dropping against nearly all the major G10/EM pairs. Markets likely anticipate comforting words from Yellen this morning at her confirmation hearing. We don't expect much USD discussion today, but fiscal should feature front and center," TD notes. 

 

 

"A focus on US fiscal should cut two-ways for markets, especially related to existing growth gaps across the major economies. The conventional view is that more US stimulus should benefit the ROW in the absence of a Fed taper. Alternatively, more US fiscal support would serve to amplify our existing positive USD growth signals," TD adds.

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