# Making sense of the weak USD – Westpac — Octa

> Westpac says the euro's relationship with bund-treasury yield spreads has inverted in 2018, so the dollar is not gaining from higher yields as it did between 2012 and 2017. It attributes the weakness mainly to expected US fiscal deficits from the Republican tax plan and a $300bn two-year budget deal.

- Date: 2018-02-27 · published 2018-02-27T12:00:00.000Z
- Category: macro · region US · magnitude low
- Page: https://feedsoft.ai/events/66698-making-sense-of-the-weak-usd-westpac-octa
- Commodities: [US Dollar (Broad)](https://feedsoft.ai/c/DXY.md), [Euro (USD per EUR)](https://feedsoft.ai/c/EURUSD.md)

## Why it matters

Persistent dollar weakness linked to fiscal deficits supports US-priced feed commodities and tends to make imported inputs more expensive for buyers paying in other currencies. The analysis suggests the trend is not explained by growth or rate factors alone.

## Read by commodity

- DXY: bearish ▼
- EURUSD: bullish ▲

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| DXY | 2017-06-29 | [CNY rally on the back of broad USD depreciation - Westpac — Octa](https://feedsoft.ai/events/11185-cny-rally-on-the-back-of-broad-usd-depreciation-westpac-octa.md) | +0.3% | -1.7% |
| DXY | 2017-07-31 | [USD: Tide of sentiment has turned against the dollar – BBH — Octa](https://feedsoft.ai/events/70150-usd-tide-of-sentiment-has-turned-against-the-dollar-bbh-octa.md) | +0.3% | -0.5% |
| DXY | 2020-12-11 | [USD: FOMC action to keep dollar on weaker footing – MUFG — Octa](https://feedsoft.ai/events/49846-usd-fomc-action-to-keep-dollar-on-weaker-footing-mufg-octa.md) | -0.7% | -0.4% |
| DXY | 2023-03-23 | [A weaker USD should support commodity markets – ANZ — Octa](https://feedsoft.ai/events/36778-a-weaker-usd-should-support-commodity-markets-anz-octa.md) | -0.7% | -1.1% |
| DXY | 2017-08-29 | [USD: Guided by the Fed’s expectations - BBH — Octa](https://feedsoft.ai/events/69639-usd-guided-by-the-fed-s-expectations-bbh-octa.md) | -0.3% | +0.5% |
| EURUSD | 2020-08-31 | [EUR/USD: The broad trend is to the upside — Octa](https://feedsoft.ai/events/51829-eur-usd-the-broad-trend-is-to-the-upside-octa.md) | -0.7% | -2.0% |
| EURUSD | 2022-03-10 | [Best day in 5-years for EUR/USD ahead of the March ECB meeting](https://feedsoft.ai/events/9525-best-day-in-5-years-for-eur-usd-ahead-of-the-march-ecb-meeting.md) | -0.7% | -1.4% |
| EURUSD | 2020-05-29 | [EUR/USD: Balance of risks shifting in favour of stronger euro – MUFG — Octa](https://feedsoft.ai/events/53356-eur-usd-balance-of-risks-shifting-in-favour-of-stronger-euro-mufg-octa.md) | +2.3% | +1.4% |

## Sources

- octaafrica.net: https://www.octaafrica.net/markets/news/view/543644/

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.