US Dollar Under Pressure Amidst Fresh Trump Healthcare Legislation Woes
The US Dollar’s woes continue as traders lose faith in Donald Trump’s ability to deliver on core campaign promises to boost spending and cut taxes.
Trump and the US Dollar suffered another blow at the start of the week when Trump’s push to repeal Obamacare was blocked by sceptical Republicans.
The latest Republican effort to repeal and replace 'Obamacare' has been “fatally wounded” in the US Senate after two more Republican senators announced their opposition to the legislation.
Senators Mike Lee of Utah and Jerry Moran of Kansas left the party's long-promised efforts to get rid of former president Barack Obama's Affordable Care Act increasingly unlikely.
“The Dollar doesn’t actually care about the healthcare bill specifically, but rather what it means for Trump’s ability to get anything done, something that could come to affect his infrastructure and tax plans down the road,” says Connor Campbell at Spreadex.
“If Trump cannot get healthcare reform through then how is he going to achieve the more controversial fiscal plans through? The dollar has had another leg lower as a result, coming under renewed weakness across the major currencies,” notes Richard Perry at Hantec Markets.
The Pound to Dollar exchange rate now looks to have cemented its advance above the key 1.30 area as a result of the latest bout of Dollar weakness.
“We pulled back from 1.3120 resistance, but continue to consolidate above 1.3050,” says Robin Wilkin at Lloyds Bank.
However Wilkin is a little concerned that the GBP/USD is now looking overbought and could therefore be in danger of retracing some of its recent strength.
We would look for 1.30 to hold if the uptrend is to stay alive as this is an obvious level of resistance and support.
“On a strong breakout the market is looking for confirmation that the move will not simply and quickly be retraced. There has been a bit of a wobble on Cable’s breakout but as yet it is holding,” says Hantec’s Perry.
