The US dollar made a major reversal from the year low of 91 to 94.105 Due to Hawkish Central Bank. Janet Yellen statement of FOMC that as long Wages continues to Raises, Inflation stays above 2% and The US is on Full Employment the Federal Reserve will raising rates in 0.25% December 2017 , 0.25% x 3 more times in 2018, 0.25% x 1 more time in 2019 and 0.25 X 1 time in 2020. After her speech we have had good CPI,GDP,Employment, Retail sales, Trump Tax reform. All this good macro data took the dollar up to 95.10. However, Now the Trump tax cuts are under pressure and approval are in doubts this will hurt the dollar and this will reprice the dollar lower in the short term. The reason the tax cuts are important is because lower taxes will put more money in peoples pockets.
Low Employment = Less available employees = Companies fighting for those employees skills = Higher Wages = More Money to Spend = Higher demand for goods = Higher Prices = Higher inflation = Higher Interest Rates
Low Employment = Less available employees = Companies fighting for those employees skills = Higher Wages = More Money to Spend = Higher demand for goods = Higher Prices = Higher inflation = Higher Interest Rates
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