Uncommon truths - Is ARP dollar positive?

Uncommon truths - Is ARP dollar positive?

The US government is embarking on another round of fiscal stimulus. Estimates vary about the likely effect on the economy but we suspect it will boost the dollar over the coming quarters (despite longer term concerns). This has tempered our enthusiasm for commodities and EM assets.

A little more than four years ago (29 January 2017) we asked: Is the GOP tax plan dollar positive? We didn’t think so but were confronted by a lot of investors who believed the proposed tax cuts would boost the greenback. Now that President Biden’s American Rescue Plan Act of 2021 (ARP) has won congressional approval, we are not detecting the same degree of dollar enthusiasm (though that may be due to a lack of client contact!).

Investment risks

  • The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Important information

  • Data as of 18 March 2021 unless stated otherwise.

    This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.

    Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals, they are subject to change without notice and are not to be construed as investment advice.