FX.co ★ The new round of political struggle in the United States has already started

The confrontation between the Democratic and Republican parties has reached a new level. After Friday night, former US national security adviser Michael Flynn unexpectedly pleaded guilty to having previously given false testimony to FBI employees. The markets "revived" in a wave of high volatility.

This news really turned out to be an information bomb, and against this background, the US stock market sharply went down, but eventually pared most of the losses. This was because despite Flynn's admission, nothing was said that could personally cast a shadow on President D. Trump. However, it is clear that Trump's political opponents are trying to get a "lead" from Flynn in order to give them a reason to announce impeachment. Whether it will be done to them or not is unclear, but one can say with much confidence that the political turmoil in the US negatively affects not only the image of the country, but also the attitude of investors towards the US national currency.

The dollar, which had been growing rather confidently earlier on the backdrop of optimism regarding the adoption of the new tax code, as well as the prospects of the Fed continuing to hike the interest rates against a background of strong economic growth, is now stuck in the fetters of uncertainty. Not only in the issue of tax reform, but also because of a new heightened political struggle in the US, which forces market players to escape from risk.

Given this state of affairs, it can be said that uncertainty, as the main limiting factor, will continue to hamper the upward dynamics of the US dollar. Unless, of course, Trump and the Republicans succeed in pushing the tax reform, and avoiding the impeachment risk for the president himself.

Forecast of the day:

The GBPUSD pair is corrected downwards after an attempt to grow on the wave of optimism that the cost of the UK exit from the EU will be determined in the near future and will not be noticeably high. However, time has passed, and there are no agreements yet, which provides investors with some disappointment and the desire to lock in profits. Given this scenario, we can assume that after the price falls below 1.3450, its decline may continue towards 1.3375.

The USDJPY pair is above the 112.70 level. A steadying above this mark can become the basis for maintaining its growth towards 113.35.