December 8, 2022

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US dollar creeps higher as infrastructure optimism builds

1 min read

Infrastructure could boost US growth and pull forward rate hikes

USDCAD 10 mins

The odds of a bipartisan infrastructure deal rose today after Sen Romney said the framework was agreed and a report said Biden was likely to support it.

To be sure, there’s still a long road and politics is filled with twists and turns but the bull case is a nearly $1 trillion bill passed with bipartisan support followed by a Democrat-only bill that could be $2-4 trillion.

The dollar is creeping higher even as stocks rise, suggesting this is a US-only story rather than part of the risk trade. Interestingly, yields are lower though, which is not what you would expect on a higher prospect of more spending.

There are still plenty of details to work out though and we’re now into the quarter-end countdown so maybe I’m reading too much into the dollar move anyway.

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