The USD has enjoyed some respite overnight and into the European session, following comments from the U.S. President late in the session on Monday.
Donald Trump has vowed to push for some soft payroll tax cut relief. He will discuss with Congress later on today about possibly cutting payroll taxes to support the economy as it deals with the coronavirus outbreak.
He said: “We’ll be discussing a possible payroll tax cut or relief, substantial relief, very substantial relief, that’s a big number” when speaking at a briefing at the White House.
In recent trading, the USD has been the harsh victim of selling pressure and much underperformance across the board versus its peers. The catalyst for this is growing expectations for the central bank of the U.S., FOMC, to slash rates further this month.
Markets are pricing in between 50-75BPS in cuts this month, in a follow on to the surprise cut last week of 50BPS.
Should the central bank underdeliver and not cut as much as anticipated, it could allow room for a recovery for the greenback.
If Trump fails to push through these hoped-for tax cuts, then expect USD to come back under pressure.
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