Ahead of President Donald Trump’s planned speech to congress tomorrow, some general ideas have been coming out regarding fiscal policy. And they are not in line with market hopes about boosting the economy.

The US dollar is under pressure, sliding across the board, but well within known ranges. Does it have room for further, bigger falls? Here are three key points that are worrying for markets:

1. Healthcare first, tax second: The new administration gives priority to healthcare. Trump talked about an instant “repeal and replace” for Obamacare but he is getting to grips with reality. The topic is very complicated, Congress moves slowly and it will cost a lot of political capital. Obama had a hard time and so does Trump. Republicans do not really have one clear plan. Worse off, dealing with a healthcare plan postpones other fiscal moves such as a budget and tax reform that markets want so much.
2. Focus on defense: Trump wants to pour some $54 billion into defense spending. While some of that will stimulate the economy in the short run, some of the money goes overseas. While he does mention infrastructure spending the US badly needs, it is lagging behind in the arms race. Markets want investment in construction and not destruction.
3. Spending cuts, but not Medicare: After the elections, markets imagined Trump cutting taxes and spending on infrastructure. Such measures boost the deficit but also boost the economy. A steaming hot economy triggers inflation, which triggers rate hikes and these expectations send the dollar higher. However, Trump comes to grips with political reality: Republicans do not want to bloat the deficit. So, he is now proposing cutting a dollar of spending for every dollar going to defense. However, he keeps up his election promises not to hurt Medicare and Medicaid. Where will the money come from? Infrastructure? In any case, this is not the expansionary policy that was envisaged.

The sell-off in the US dollar is most evident in EUR/USD, which is up by 0.64% at the time of writing to 1.0627, but the slide is broad. However, these losses are limited ahead of Trump’s speech tomorrow.

Will the falls deepen? The new administration is less than half way through the 100 days of grace but markets are impatient as always. If he does not present any big boost to the economy, more of the post-elections dollar gains could be undone.