Eco look: the new American budget maintains the weakness of the dollar

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Eco look: new american budget new: Consequently,

Eco look: new american budget:

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Eco -looking. Consequently. Similarly, –

The new American budget maintains the weakness of the dollar

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The American budget is expected to increase the country’s deficit by $ 4. In addition, 000 billion over eco look: new american budget a decade, without stimulating its growth prospects. However, A deterioration in the budgetary trajectory of an economy often results in an increase in the premium required by. eco look: new american budget new For example, investors to hold long -term debt.

Indeed. Meanwhile. interest rates reflect the evolution of short rates, to which is added a premium which compensates for the holding of bonds with longer maturities. Moreover, Investors focus on the long -term consequences of the budget. In addition, its ability to fuel inflation and widen the deficit, despite a certain increase in customs revenues. These factors have limited confidence

in the US dollar. Even if the currency seems to be overlooked, its appreciation potential remains modest. Insofar as the budget plan will dig the deficit without improving growth prospects. the dollar should continue to evolve around its fair value of 1.15-1.20 for eco look: new american budget EUR/USD.

The American deficit does not worry the stock markets. unless there is a resurgence of eco look: new american budget new inflation, which would then prevent the federal reserve from carrying out direct rate drops. This is not our basic scenario. We anticipate a return of guiding rates to a neutral level, which does not stimulate or slow down growth.

At first glance. the weakness of the dollar constitutes a factor favorable to global liquidity. by softening the financial conditions and by supporting risky assets, in particular emerging shares, and can therefore prove to be carrier for the stock markets. A lower dollar also reduces the cost of capital for multinationals while increasing foreign revenues from American companies.

Emerging currencies have already taken advantage of the change of feeling and the decline in the cost of capital. eco look: new american budget With the weakening of the dollar. the improvement of appetite for the risk worldwide, capital has reflected eco look: new american budget new towards emerging assets that display higher yields. This rotation reflects both the quest for return for investors and their reassessment of the relative value of assets.

It will be essential to monitor budgetary dynamics. inflation. Fed policy (any infringement of independence and targeting its president would include negative consequences for the dollar and could result in an increase in American rates), and world capital flows in the coming weeks.

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Eco look: new american budget new

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