From FX perspective, what matters most - geopolitical tensions, tech rally, Fed narrative, fiscal stimulus, Supreme Court ruling?
Anna
Kit Juckes
All of it. For rest of week we refocus on mundane: dollar only goes down if Fed eases as much as market thinks and economy slows. If economy is robust, not getting much weaker dollar this year.
Does that mean you look at US or elsewhere?
Anna
Kit Juckes
Look mostly at US. Market taking bet Fed cuts fair amount to weaken dollar because Trump wants it. Not possible if economy grows 3% or 2%. If economy robust, not getting much weaker dollar.
What gets euro lower from here?
Tom
Kit Juckes
Stronger dollar story is last year's story continuing. Geopolitical story worrying for Europe - three big nuclear superpowers playing diplomacy, Europe twiddling thumbs. That's problem for euro.
Best trade on fact Trump wants lower crude prices?
Tom
Kit Juckes
Have to be sure he can deliver them more than we already got. Traditionally benefits yen but struggling with that. Basically neutral for dollar at this point.
Geopolitical positioning - undermine dollar long term or support as safe haven?
Tom
Kit Juckes
Depends how plays out. Long run if world decides to rearm and become insular, bad for dollar. Short run if all world's best investment opportunities in dollar, not easy path for weaker dollar.
Sterling almost 8% gains last year versus dollar - continues or stretched?
Tom
Kit Juckes
Market short sterling long euros. Pound having good run and will have good run. Sterling will go little bit further.