USD looking to consolidate - Westpac

USD looking consolidative lately but the mild uptrend from early Sep still seems in place, according to Richard Franulovich, Research Analyst at Westpac.

Key Quotes

“Positioning is no barrier to USD upside, positive data momentum persists (see slide) and modest retracement targets have yet to tested (96.0).”

“Festering doubts about a tax overhaul could check USD upside potential. Special interests are pushing back on key provisions and the Senate is working on a separate bill that likely contains substantial differences, notably delayed tax cuts and a smaller deficit to meet stringent Senate rules for avoiding the regular 60-vote threshold which would allow Democrats to kill the bill.”

“Challenges in reconciling competing House-Senate plans raise risks the final outcome is smaller and delivered later. Steep Republican losses in key state and local races could push tax writers toward limiting corporate tax changes and adopting a more populist approach.”