USD: 3 Reasons Why US Tax Reforms A 'Big Deal' To Support USD In Early 2018 - BofAML
Bank of America Merrill Lynch FX Strategy Research discusses the impact of the US tax reform on markets and makes the case on why it will likely trigger USD gains in early 2018.
"We have been arguing that the US tax reform is a big deal and will support the USD in early 2018 for the following reasons:
1- It includes substantial fiscal stimulus, at a time when the US economy does not need it....
2- It could lead to more Fed hikes. Even without tax reform, we expect three hikes by the Fed next year, consistent with the dot plot. With tax reform, the Fed may hike four or even five times next year. The market is still pricing only three hikes in 2018-19....
3- It will trigger substantial profit repatriation. After paying the lower tax on the stock of cash abroad, there is no reason for US companies not to bring, at least, some of this money back home," BofANL argues.
"We expect the USD to strengthen early next year, as the market will buy the tax reform fact, after having sold the rumor," BofAML concludes.
Source: Bank of America Merrill Lynch Rates and Currencies Research
Congratulations @efxnews! You have completed some achievement on Steemit and have been rewarded with new badge(s) :
Award for the number of upvotes received
You published 4 posts in one day
Click on any badge to view your own Board of Honor on SteemitBoard.
For more information about SteemitBoard, click here
If you no longer want to receive notifications, reply to this comment with the word
STOP