Mar 22, 2019

The dollar is likely to reap the benefit of the West's uncertainty

Data: Investing.com; Chart: Naema Ahmed/Axios

Currency traders are having trouble deciding which of the world's major Western economies is in the worst shape. They have been selling the U.S. dollar, euro and British pound intermittently as various central banks signal their next steps.

What's happening:

  • Traders sold the euro and bought the dollar after the European Central Bank lowered its euro zone growth forecast and announced it would resume its TLTRO stimulus program on March 7.
  • They sold the dollar after the Fed cut its U.S. growth forecast and announced further rate hikes this year were unlikely on Wednesday.
  • Yesterday, traders sold the British pound after the Bank of England kept rates on hold and May's latest Brexit deal was rejected, raising the chances of a no-deal divorce from the EU. It was sterling's worst day against the dollar this year.

However, none of the moves have stuck. Sterling reversed most of its more than 1% loss from Thursday overnight after news of the EU's Brexit extension.

What's next? Analysts tell Axios they largely expect the dollar to reap the benefit of uncertainty as the U.S. has higher interest rates than most major economies, which means traders benefit from the "carry trade" by holding it.

  • The dollar's rate against the euro and pound make up nearly 70% of the dollar index's value.

Go deeper: King dollar keeps rising

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Federal court temporarily halts "Remain in Mexico" program

Migrant wearing a cap with U.S. flagin front of the border between Guatemala and Mexico. Photo: Jair Cabrera Torres/picture alliance via Getty Image

The 9th Circuit Court of Appeals upheld a lower court's earlier injunction on Friday, temporarily stopping the Trump administration from enforcing the Migrant Protection Protocols (MPP) — known as the "Remain in Mexico" policy.

Why it matters: Tens of thousands of migrants seeking asylum have been forced to wait out their U.S. immigration court cases across the border in Mexico under the policy. The Trump administration has long credited this program for the decline in border crossings following record highs last summer.

Go deeperArrowUpdated 2 hours ago - Politics & Policy

Coronavirus updates: WHO raises global threat level to "very high"

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens.

The World Health Organization raised its global risk assessment for the novel coronavirus to "very high" Friday, its highest risk level as countries struggle to contain it. Meanwhile, National Economic Council director Larry Kudlow this morning tried to reassure the markets, which continued to correct amid growing fears of a U.S. recession.

The big picture: COVID-19 has killed more than 2,860 people and infected about 83,800 others in almost 60 countries and territories outside the epicenter in mainland China. The number of new cases reported outside China now exceed those inside the country.

Go deeperArrowUpdated 3 hours ago - Health

Bernie's plan to hike taxes on some startup employees

Illustration: Sarah Grillo/Axios

Sens. Bernie Sanders (D-VT) and Chris Van Hollen (D-MD) introduced legislation that would tax nonqualified stock options at vesting, rather than at exercise, for employees making at least $130,000 per year.

The big picture: Select employees at private companies would be taxed on monies that they hadn't yet banked.