You have to look for a lot to find arguments in favor of the dollar at this time. And I fear that, in the midst of all agitation, another structurally negative constellation could arise, one that the ‘veterans’ among us in the market probably still remembers: the twin deficit of US Commercial deficit in the US and punished the dollar, says Commerzbank’s currency analyst Antje Praefcke.
The debate on the US budget is gaining impulse
“I fear that the market could soon realize that we could face a similar situation again. On the one hand, most tariffs announced from the ‘Liberation Day’ have been suspended at the moment, so a reduction in US imports is not expected at the same time, however, USA continues to consume many foreign goods. Therefore, a reduction in the US Sustainably, it seems unlikely at this time. “
“At the same time, the debate on the US budget is gaining impulse. Tariffs will not The budget, which makes budget consolidation even more difficult.
“If we really go back at the beginning of 2000 and the market moves with this new old theme, the dollar could face a prolonged period of weakness, partly due to the ‘twin deficit’. Therefore, I will pay attention to whether I begin to read and notice this word more often from now on, even if I could hardly hear it at that time.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
