Fiscal policy and currencies: what's the story?

Budgets, deficits and tax changes move currencies through growth expectations and bond supply. Fiscal news lands less often than monetary news but hits with conviction.

Fiscal policy and currencies: what's the story? — pip movement diagram
How a pip moves the exchange rate

What are you watching?

  • the fiscal stories with currency implications
  • how deficits feed the bond market and the currency
  • the fiscal event that last moved your pairs
Fiscal policy and currencies: what's the story? — risk-reward diagram
A risk-reward ratio of 1 to 2

Background: bond yields and exchange rates for the transmission.

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