The dollar has been dominating the market after the prudential election on 8th November 2016.The ongoing economic performance and positive statement from the president of USA gave the dollar a strong bullish momentum in the market. However, on last Friday the dollar become broadly weaker against its all major rivals in the forex market upon the release of the major economic news. On last Friday the dollar closed at 1.0667 against its major rivals EURO in the forex market. The sharp decline of the U.S dollar has been triggered by the poor performance economic performance in the last week. According to the labor Department, there has been a sharp fall in the U.S wages in the month of November and the Non-farm payroll data came negative then the expectation. The forecasted job lot opening was 180k whereas the actual data came as 178 k which also turned the strength of the dollar in the global market.
The U.S dollar index which is a measure of the overall strength of the green bucks fell by 0.3% to 91.30.The dollar sharply dropped against the yen but managed to keep its strength against the EURO at the end of the market closing. The current unemployment number remain unchanged and 4.6% rate it the lowest level in the past nine years. According to the Federal Labor Department, the average hourly earnings s of the U.S citizen also fell by 0.1% which also weaken the dollar in the global market to a great extent. To be precise all the major data in the last week came pretty bad which turned the mighty dollar broadly weaker against all its major rivals. Even the Japanese Yen which was sharply falling in the market in the last two month managed to overdrive the strong bullish pressure of the US dollar in the last Friday. This is the first time the green bucks has become weaken after the presidential election of 2016.
The mixed economic data in the last week also caused a significant drop in the dollar index in last Friday how the green bucks are still near the multi-year high in terms of dollar index value. U.S president Donald Trump has already stated to expand fiscal spending but the increased oil price has caused inflation in the US industry which is another cause of the weakness of the dollar. The ongoing energy crisis in the global economy has settled to a certain extent since OPEC has finally put a cap on oil production. They have enforced the law to limit the oil production to 32.5 -33 million barrels per day which are a pretty daunting decision in such crisis moment. However, if you go more in-depth then we will see all the major oil producing companies are forced to limit the oil production to 1.5 million barrel per day by different strict laws. Leading economist of the global world are expecting a strong stability in the oil price since OPEC has finally kept their word and had taken their major steps to stop the ongoing energy crisis. In the next week the Australian Federal Reserve Bank is going readjust their interest rate and if things go in favor of the Aussie dollar then we will see further weakness in the green bucks in the upcoming week. To be precise the next is heavily packed with high impact Aussie news and traders are expecting high volatility in the AUDSUSD pair. Though the pair has broken critical support level on the daily chart but investors are thinking that the current weakness of the U.S dollar might bring some fresh buying pressure in the Aussie market.
The year 2016 has been a tough year for the forex traders since lots of high impacts fundamental and the political event took place in the market. The recent ongoing issue of the interest rate hike decision by the FED has also created a massive confusion into the mind of traders. The FED is most likely to hike their interest rate in their next FOMC meeting minutes but some of the leading economists are still thinking that if it’s the right time to hike the interest since the last week performance of the U.S dollar was pretty bad compared to its last two-month performance. According to FED rate hike monitor tools, there is 91.3% chance that the FED will hike their interest rate in the upcoming FOMC meeting minutes. If the FED comes up with a hawkish hike in the month of December then we will see a strong bullish momentum in the US dollar index. Currently, the dollar index is trading below the support level so it’s extremely crucial for the dollar index or else its value will fall towards the 100.25 level. On the contrary, the EURO and Great Britain Pound has suffered an extensive loss in the market. Especially the loss of Great Britain pound during the Brexit event has shocked the global economy. However, the pair has started its bullish correction in the daily chart but with the imminent rate hike in mind, traders are fear to go long in this pair. Considering all the parameter the dollar has a huge possibility to gain strength in the market in the middle of December. But in the upcoming weeks the dollar very little to do in the forex market since there is no major news release in the market. Traders all over the world are cautiously waiting for the FED rate hike decision to get a clear overview of the forex market.