Steve Blitz from TS Lombard said there will not be enough fiscal stimulus to move the needle, and it is far from clear what the dollar will do given that Europe and Japan are both rebounding. Complex hedging practices in the derivatives markets suggest that the euro will strengthen against the dollar next year. The tax holiday for US companies in 2005 did lead to a 15pc rise in the dollar index (DXY) over a fifteen month period but the circumstances were very different. Mr Blitz said it was a zero-tax holiday and it was only offered for a short window of time. The Republican package today is open-ended and entails a 14pc tax. It may be a damp squib.
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