Finally some political calm, at least temporary. After the big crash on the Comey memo, we have a greenback comeback. The US Department of Justice (DOJ) has appointed a special counsel to investigate a potential collusion between the Trump campaign and the Russians in the run-up to the 2016 elections.
Former FBI Director Robert Swan “Bob” Mueller III was appointed by George W. Bush and his term was extended by Barack Obama. He enjoys high credibility. The move was praised by politicians on both sides of the aisle.
The investigation may take a long time and Mueller is known to manage a “tight ship”. He is considered thorough and does not give many interviews. So, the topic could be put to rest for some time. Needless to say, he may reach the conclusion that Trump colluded with the Russians and tried to obstruct justice. He may also reach the opposite conclusion.
USD recovers
What matters for markets is that at this point, the story might return to the back-burner. Putting it aside at least for now may allow progress on what markets want to see from Trump: tax reforms, infrastructure spending, and deregulation
After the big crash yesterday, USD/JPY is above 111 once again, trading at 111.30. EUR/USD dropped from the highs of 1.1170 to support at 1.1120. This 1.1120 level worked as a double-bottom back in September.
Here is the EUR/USD chart:
