Dollar bid fades in steady trading

Brief dollar rally squished

The dollar briefly jumped on anxiety about the AstraZeneca vaccine but has since give back those moves. It’s now roughly where it was at the start of New York trade and moderately higher versus EUR and GBP on the day.

Equity and bond markets are steady as well, trading little changed but with a bid in tech beginning to emerge.

The simple narrative is that the market is waiting for the Fed but I don’t know of that adds up. I don’t think we’ll see an SLR extension and some dots will creep into 2022, but will that be a surprise?

I tend to think the market can digest it.

There’s some apprehension about US fiscal policy and tax hikes and that’s going to be a big factor for the remainder of the year. At the same time, if taxes for the wealthy go up and that helps to keep rates at zero, is that really a drag for GDP and the dollar?

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