Euro, sterling and the Canadian dollar are taking advantage of the mess in Washington
Sometimes the market takes a step back and looks at the big picture.
The story today is that the Obamacare replacement vote is delayed and it's a struggle to get something done. In the bigger picture Washington is completely dysfunctional.
The last time anything got done was during the crisis and just afterwards. It's been total gridlock for 8 years since. The thinking was that Republicans controlling the House, Senate and White House could get something done but, evidently, the Republican party is incapable of compromise even with itself. Democrats are still bitter about how Obama was treated and they won't be working across the aisle any time soon.
So maybe something gets done on healthcare, maybe something on taxes but it's all going to be watered down. Nothing big or exciting or anything capable of changing the trajectory of growth is coming. It's not coming now, it's not coming later and it's not coming any time in the next decade.
That's not exactly why the US dollar is slumping today but it's part of the equation. Another part is Europe, which is equally dysfunctional most of the time but things have bottomed out. France and Germany are back on the same page and Europeans have decided to collectively dislike Trump.
