How Tax Repatriation Can Impact the U.S. Dollar

The video discusses the impact of a one-off levy on accumulated earnings abroad on the FX market and the US dollar. It highlights the shift in market focus from repatriation and tax reform to Fed policy and fiscal stimulus. The convergence trade is emphasized as a major theme, with G10 currencies catching up with the US. The video also explores the marginal impact of repatriation on the corporate market and the FX market, noting that it provides a short-term tailwind but is not a long-term driver for the US dollar. The potential for a larger twin deficit due to tax reform is also discussed.

What was the initial concern regarding the one-off levy on accumulated earnings abroad?

• Its influence on gold prices

• Its implications for the dollar

• Its impact on the euro

• Its effect on the stock market

What has taken a back seat due to the convergence trade?

• Corporate tax reform

• Trade agreements

• Acronyms of BAT and HIA reform

• Interest rate hikes

What is the current focus of market expectations according to the second section?

• Corporate earnings

• Fed policy and fiscal stimulus

• Global trade agreements

• Cryptocurrency regulations

How significant are the FX flows from repatriation in the context of the FX spot market?

• Marginally significant

• Not significant at all

• Moderately significant

• Very significant

What could be a more powerful and long-term factor for the US dollar than repatriation?

• Interest rate cuts

• Gold price surge

• Twin deficit increase

• Stock market rally