US Political Turmoil over the Weekend a Risk for the USD
Real-Time AmpGFX – US Political Turmoil over the Weekend a Risk for the USD (Sun 3/18/2018 10:38 AM)
Developments in recent days point to a new wave of US political uncertainty that risks sending the USD lower.
The firing of McCabe on the eve of his retirement appears aimed at discrediting the basis for the Mueller investigation and creating the appearance of deep state conspiracies involving some kind of collusion related to the Clintons and Obama.
John Dowd, President Donald Trump’s personal lawyer, called for Mueller probe to end ‘on the merits in light of recent revelations.’
https://www.cnn.com/2018/03/16/politics/mccabe-fired-statement-fbi-deputy-director/index.html
https://www.cnn.com/2018/03/17/politics/john-dowd-mueller-russia-investigation/index.html
Trump has sent out a large number of tweets on the matter over the weekend, setting out his case for collusion against him by high-level employees of FBI, Justice and State Departments loyal to Clintons/Obama/Democrats. He has restated a range of previous claims he has made. He is attempting to discredit key actors in and undermine the credibility of the Mueller investigation.
Donald J. Trump @realDonaldTrump
Andrew McCabe FIRED, a great day for the hard working men and women of the FBI – A great day for Democracy. Sanctimonious James Comey was his boss and made McCabe look like a choirboy. He knew all about the lies and corruption going on at the highest levels of the FBI!
As the House Intelligence Committee has concluded, there was no collusion between Russia and the Trump Campaign. As many are now finding out, however, there was tremendous leaking, lying and corruption at the highest levels of the FBI, Justice & State. #DrainTheSwamp
The Fake News is beside themselves that McCabe was caught, called out and fired. How many hundreds of thousands of dollars was given to wife’s campaign by Crooked H friend, Terry M, who was also under investigation? How many lies? How many leaks? Comey knew it all, and much more!
The Mueller probe should never have been started in that there was no collusion and there was no crime. It was based on fraudulent activities and a Fake Dossier paid for by Crooked Hillary and the DNC, and improperly used in FISA COURT for surveillance of my campaign. WITCH HUNT!
Wow, watch Comey lie under oath to Senator G when asked “have you ever been an anonymous source…or known someone else to be an anonymous source…?” He said strongly “never, no.” He lied as shown clearly on @foxandfriends.
Spent very little time with Andrew McCabe, but he never took notes when he was with me. I don’t believe he made memos except to help his own agenda, probably at a later date. Same with lying James Comey. Can we call them Fake Memos?
Why does the Mueller team have 13 hardened Democrats, some big Crooked Hillary supporters, and Zero Republicans? Another Dem recently added…does anyone think this is fair? And yet, there is NO COLLUSION!
We need to consider what is motivating this latest most aggressive attempt to weaken and derail the Mueller investigation.
The timing comes after it was reported that Mueller had subpoenaed the Trump organisation late last week for documents (which documents is unclear).
https://www.nytimes.com/2018/03/15/us/politics/trump-organization-subpoena-mueller-russia.html
The timing is ahead of a book launch and TV interview by James Comey on 17 April (title: Loyalty, subtitle: Truth, Lies, and Leadership)
Comey Tweeted over the weekend:
Mr. President, the American people will hear my story very soon. And they can judge for themselves who is honorable and who is not.
The Timing is also after the 20pt swing in the special House of Reps seat election in Pennsylvania against the Republicans, perhaps signaling a Democrat victory of one or two houses of Congress. A Mueller investigation that is still running past November and a Democratic Congress increases the probability of impeachment proceedings.
It may be the case that Trump can see Mueller uncovering uncomfortable connections between his family, his campaign and Russian actors. Whether this is enough to make a case for collusion in election meddling is one thing, but Trump may see it as useful to discredit such findings as tainted and raise questions about the probity of the investigation.
The risk is that the issue again overshadows economic developments and Fed policy and generates uncertainty over the stability of the US government. How or if this should impact on financial markets remains to be seen, but it does appear over the last year that when this issue has come to the foreground, it has generated a period of USD weakness.
The USD was strengthening on Friday despite political risks related to staff departures at the White Houe last week and a poor showing by Republicans in the special election.
This was perhaps a sign that the USD was set to perform more strongly. However, the actions over the weekend related to McCabe/Mueller may spell more trouble for the USD
On Friday there were also rumours that National Security Advisor McMasters might soon be removed followed by rumours related to Chief of Staff Kelly. The staff turmoil issue may not have fully played out as another element of US political risk.
The leaves us wondering if we should again exit our short EUR/USD position established on Friday.