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USD/CAD Falls below 1.2600; USD Faces Sharp Pressure after Obamacare Repeal Setback

Published July 18, 2017
  • The US dollar continues to sell off this morning after Senate Republicans failed for a second time to reach a consensus on repealing Obamacare; the US dollar index moved to its lowest level since August 28, 2016
  • Nearly half of the cuts from the Obamacare repeal were set to make up for decreased revenue brought on by Trump’s proposed tax cuts; market sentiment on the US dollar has sunk as Trump’s lack of progress weigh heavily on the greenback
  • US Congress Members however took an initial step towards Trump’s proposed tax plan in their release of a fiscal 2018 budget plan; this plan could be theoretically passed without support from the Democrats provided there is no delays from the Republican side
  • USD/CAD has now settled near the high 1.2500s this morning as the USD faces weakness across the board; for now, the market is increasingly optimistic in the Bank of Canada’s hawkishness while lackluster US data is causing doubt in the Federal Reserve’s ability to raise US interest rates
  • Oil prices continue to move higher this morning ahead of US oil inventory data; investors are beginning to weigh signs of increasing demand versus the ongoing going supply glut
  • Key OPEC producers are set to meet with Russia at the end of the month to check compliance within the OPEC deal and to assess the current oil market