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Hardy: The dollar's future amid US "nightmare"
Where's the dollar heading amid the growing uncertainty in the States? Saxo's John Hardy says the outlook is mixed, despite signs the US congress is taking steps towards resolving the budget stalemate. The dollar is weak against the euro and risk-on currencies, such as commodity currencies, but strong against the Japanese Yen.
In the latest development of what John calls the US budget "nightmare" scenario, Republicans have offered a plan that would postpone a possible US default. This is perhaps signalling new willingness to end the standoff.
But as John warns, the government shutdown is ongoing and there is a risk that it could drag on. That could impact the Fed's decision as to when it will end its bond buying programme.
But looking at the bigger picture, John thinks the dollar will "emerge ok on the other side", as there are signs the economy is improving.
Read more about John Hardy's predictions here:
http://www.tradingfloor.com/posts/signs-us-political-thaw-muted-fx-action-238457989
01:46 minutes
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