Bessent indicates that the US dollar drop this year is normal variance.
- The US still has a strong dollar policy
- Currencies move up and down
- More fiscal spending in Europe tells you that the euro should appreciate
- I don’t think anyone is necessarily talking about a shadow Fed
- One spot on the Fed will open up early in the year when Kugler leaves
- A group of trade deals (10-12) will be wrapped up by then
- Approx 20 other nations will either see reciprocal rates kick in, or will see 10% baseline if they’re negotiating in good faith
- It’s all up to Trump
- My inclination is that USTR will start a 301 investigation into Canada’s digital services tax
On Canada digital services tax:
- “We knew it was coming, we hoped they wouldn’t do it”
- “We were hoping as a sign of goodwill that the new Carney administration would at least put a brake on that during the trade talks.”
Ah yes, because the US has halted its tariffs during trade talks.
This article was written by Adam Button at www.forexlive.com.
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