What Does Ferris Bueller, Trump And The US Dollar Have In Common Today?
|Picture Source: Ferris Beuller|
[See if after reading this report you can figure out why we’re showing you a picture of Ferris Bueller. First one in comments with the right answer gets a shout out.]
First, Down To Business: The US Dollar!
What’s so big about that, you may ask?
Well the same news that has been killing the dollar since mid-May came out again today. This time the dollar went up.
Rewind Back To The Comey Memo Leak May 16th
On May 16th The New York Times came out with a then-bombshell report that accused President Trump of obstructing justice when he asked James Comey, “I hope you can let this go.”
Last week in a sworn testimony Mr. Comey actually proudly admitted that he was the source of that potentially illegal leak. Mr. Comey and The Times claim that President Trump asked Mr. Comey not to investigate Michael Flynn and any potential Russian involvement.
Let’s see what the dollar did since then.
|Chart By Interactive Brokers|
If the President was ever convicted of obstructing justice there would be impeachment risk which would put the US in a political spiral. Dollar holders picked up on that and ran for cover.
Last Week June 8th: Comey’s Testimony
In last week's testimony however Mr. Comey was unable to accuse President Trump of actually obstructing justice.
When asked if Mr. Comey thought President Trump’s line was an obstruction of justice he said (thank you Politico),
“I don’t know, that’s Bob Mueller’s job to sort that out.”
Mr. Comey is an attorney, he knows the law. There was nobody else in the room with him and President Trump. Mr. Comey said there were no other requests from anybody to drop the Flynn case later on. Still Mr. Comey said “I don’t know” if President Trump obstructed justice.
That sounds awfully like President Trump was exonerated. There were no witnesses and the only legal-expert that was a witness doesn’t know.
Still he hinted that it will be up to Bob Mueller to sort that out.
Fast Forward To June 14th: Mueller?
This time The New York Times is trying to follow up their bombshell report from mid-May. They said that they were again leaked that this time in fact special counsel Robert Mueller may be looking into President Trump’s obstruction of justice. (Hmm, wonder who leaked that one.)
But the real news is what the dollar did this time. Let’s see.
|Chart By Interactive Brokers|
Despite the same bad "obstruction of justice" news the dollar went up this time.
That is a sign that despite the “bad news” you have “good action.” That could be a sign that the dollar is trying to bottom.
Other Factors Helping The Dollar
The weak inflation numbers yesterday may have helped the dollar.
The dollar seemed to breathe a sigh of relief after the Fed announcement yesterday as well. More rate hikes can help inflation stay low which helps the US dollar’s buying power.
The debt ceiling is certainly a risk for the dollar but it appears that the debt ceiling due-date keeps getting pushed out farther into the future. That can force traders to cover.
Frankly we expect President Trump to have enough Democrats and not-so-conservative Republicans to pass a “clean raise” of the debt ceiling. That would be very bullish for the dollar. Shorts would need to cover.
Bueller? Bueller? Mueller?
Did anybody figure out our first question why we’re showing you a picture of Ferris Bueller? First one in comments to figure this one out gets a big shout out.
And As A Bonus: Ferris Bueller On The US Dollar
“The US Dollar Moves Pretty Fast. If You Don't Stop And Look Around Once In A While, You Could Miss It.”
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