The Biden administration promised to expand fiscal expenditures to stimulate the economy. The two pulling forces may makeUSDStuck in a consolidation range because of the expansion of fiscal stimulusUSDSupply and restrain the exchange rate, but if the policy can drive the US economic recovery, it can also supportUSDappreciation.
The US Treasury Secretary’s nominee Yellen called on the Senate to “act boldly” to promote fiscal stimulus at the appointment hearing on Tuesday.USDThe index fell 0.3% after hearing the news, which just shows that the expansion of fiscal expenditure hasUSDThe impact of exchange rates.But Yellen also expressed his disapproval of the weakUSDThe contradictory position of Wall Street strongly supports YellenUSDHave a glimmer of expectation.
Lindsey Bell, Chief Investment Strategist at Ally Invest, said: “I thinkUSDGo to the crossroads.USDIn trouble. “
USDThe index (DXY) has found support near 90. Bell believes thatUSDIn other words, the two forces of mutual seesaw between supply increase and recovery acceleration will makeUSDTrapped in a consolidation state, narrow fluctuations.
But many experts are still bearishUSD, According to Dan Eye, Head of Asset Allocation and Equity Research of Fort Pitt Capital Group,EURWait for the developed national currency,USDMaybe we can hold our ground, but the boom in emerging markets may lead toUSDWeakened against emerging market currencies.
In addition to fiscal stimulus, the Federal Reserve (Fed) maintained ultra-low interest rates and continued to buyUSDImportant factor.UBS Global Wealth Management Investment Chief Mark Haefele said that although the Fed may eventually control quantitative easing (QE), it is still out of reach.USDWill continue to weaken.
The Fed’s active bond purchases means that interest rates are facing a natural upper threshold, so the yield differential between U.S. Treasuries and public bonds of other countries is suppressed and reducedUSDAttractive.
For U.S. stocks,USDConsolidation affects corporate profits, exchange rates and interest rates even more than stock valuations.in caseUSDWith the index plummeting, investors will worry about the growth of the U.S. economy and flock to overseas stocks to convert the overseas earnings of companies intoUSDTime is more generous; on the contrary, ifUSDThe rise in the index indicates that funds are rushing to safe assets, which is detrimental to all stocks.
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