Closed all positions, fearing weaker USD will dominate

Mon 6/5/2017 10:25 AM

Real Time AmpGFX – closed all positions,  fearing weaker USD will dominate

I am turning more bearish USD due to the poisoning political atmosphere in the USA at the continued poor performance on Trump.  It may not be the time to sell the USD just ahead of the Fed meeting next week, but I sense that a weaker USD may be a more sustained development.  I may be looking at selling the USD after the FOMC.  Perhaps USD/JPY could lead, especially if stocks ebb and yields fall.  Something that could arise if political risk rises in the USA and global growth levels out, which it may be doing.

Trump’s healthcare policy has stalled.  His travel ban is failing, he has built no wall, Mexico isn’t paying for it, his tax policy doesn’t add up,  His infrastructure plan said to be announced this week offers little concrete and puts the onus on the States and PPP.  A debt ceiling issue looms, Trump will need to compromise and convince Democrats to make deals on a spending bill, but he doesn’t show the temperament for it.  It is easier to see it all turning into a big mess rather than him pulling any rabbits out of a hat.

This is making the short AUD position harder to hold.  We are in a zone ahead of FOMC, ECB, UK election, Comey testifying where positioning is probably playing a bigger part in direction than the medium-term outlook.

The market is well short CAD, long EUR and short AUD.  As such,  I am squaring up all trades.  Positioning is likely to cause whippy action in these currencies and I fear a weaker USD could become the bigger move.

Bought half unit of AUD at 0.7480

Sold half unit of EUR/CAD at 1.5169