After making a remarkable recovery and rising to a month high, the American dollar has stalled its growth. This came after investors, prompted by the recent statements from the Federal Reserve, are facing increases on bond yields and are in the process of settling any short positions they had on the American currency.
However, despite the recent gains, many expect that the dollar will not recover in full and will remain bearish in the long term.
Currently the dollar’s movement largely depends on Trump’s new tax plan and whether or not it’s met with approval in Congress. The bill itself seems unlikely to succeed, as Trump’s own Republican party is not entirely supportive of it, while the Democrats are firmly against it. The possible political uncertainty that may ensue could drag the dollar down. However, the plan itself might encourage an interest rate increase in December, which would increase the dollar’s value.
