(16 NOVEMBER 2018)DAILY MARKET BRIEF 1:Watch for the dollar fade

USD bulls focused on accelerating fundamentals, strong corporate earnings and rising rates, and they were right. But negatives will catch up to the dollar in 2019. Surging public deficits and widening trade imbalances will increase the supply of USD-dominated assets and damage the value of dollar. Not to mention the chaos expected as President Trump and Democrat House go toe to toe, every day. The political gridlock will highlight the economic instability of the USA. Higher US interest rates have increased the cost of hedging USD exposure for international investors. Demand for the Euro should rise as the European Central Bank shifts toward normalization and yields rise.