Bond yields in the US have fallen back from the highs reached in the weeks following Donald Trump’s election in November and the dollar has given up ground against the euro. While the new President has certainly been busy since assuming office, markets are now awaiting concrete proposals in relation to his tax and spending policies for direction. Meanwhile, the US economy is performing well, jobs growth remains solid and the Fed is set to raise interest rates this year. This should see the dollar regain ground against the euro, though relatively strong growth in the Euro area lately, alongside a steady decline in unemployment and a pick-up in inflation, suggests the much speculated upon break below parity may be less likely.
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