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Weekly roundup: USD edged lower following Trump's tax plan release

currency-newsWeekly roundup: USD edged lower following Trump's tax plan release
President Donald Trump’s entire tax plan comprised of a single side of bullet-pointed A4 paper and was fewer than 250 words long. Details were vague and the main takeaway - that business tax would be slashed from 35% to 15% - had already been confirmed the day before. Hopes that these ‘massive’ reforms would give the US economy a boost were therefore slim and the US dollar edged lower.

Friday’s US GDP figures were also a disappointment. Year-on-year growth had been expected to slow from 2.1% to 1%, but instead dropped to 0.7%. While this cooled appetite for the US dollar, the currency didn’t fall as much as could have been expected. Economists pointed out that the previous figures had been pushed much higher by record car sales and unseasonably weak demand for energy thanks to a warm winter.

This week’s Federal Open Market Committee (FOMC) monetary policy meeting will be the driving force behind USD exchange rate fluctuations. Markets suggest there is a 95% chance interest rates will be left in the 0.75-1.00% range. However, nearly three-quarters of bets on interest rates for June expect a 0.25% hike. Investors will therefore be watching this week’s meeting closely, as US policymakers may give hints as to whether they are likely to make changes in June.
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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