Dollar bulls losing their steam prior to the new trading year

In the last year, the dollar bulls have shown an immense amount of strength in the global market and pushed the dollar higher against its all major rivals. The green bucks gained its first bullish momentum in the market during the U.S presidential election held on 8th November 2016.Mr. Trump surprised the whole world by becoming the new U.S president and he gave the dollar its first boost by stating that they are going to increase the fiscal spending in the very beginning of the next year. Most importantly he also stated that they are going to initiate tax cut policy to give a better standard of life to their citizen. Such an optimistic statement from the newly elected president create extreme positive consumer confident in the U.S consumers. The long anticipated rate hike decision was finally implemented by the FED in their last FOMC meeting minute as they hike their interest rate on the basis of 25 points. The green bucks became broadly stronger against its major rivals in the forex market. However, most of the investors are thinking that the dollar will lose its strength in the near future.

Dollar bulls are running out of steam: The dollar gained a significant amount of strength in the global market in the last couple months and pushed all of its major rivals lower in the forex market. The recent fall of the U.S dollar index from its 14 years high created the first bearish sentiment in the market. Most of the leading investors are thinking that the market has already absorbed the current strength of the US dollar and it’s not ready for another sharp rise in the global market. However, some optimistic traders are thinking that the dollar bulls are waiting in the sideline setting a bear trap in the market and for this reason, some of the investors are currently staying on the sideline. After hitting the 14-year record high in the global market the dollar index sharply fell and this has created a mixed sentiment in the global market. Most importantly some of the leading economist researchers are thinking that the dollar will lose its strength in the near term future since the Mr. Trump statement will affect the global economy. If the U.S government fails to increase the fiscal spending then we will see a strong bearish sentiment in the global market which will ultimately weaken the dollar against its all major rivals.

The presidential election and its effect: On 8th November 2016 the U.S presidential election was held and Mr. Trump surprised the whole world by becoming the next U.S president. Investors in the global world were a little bit as eased after Mr. Trump stated about tax cut policy but before that he was the main cause of fear in the global market due to his anti-social and trade policy in the market. Leading economist are also very suspicious about the performance of the green bucks since the economy will face a new reign under the supervision of Mr. Trump. The recent inflation rate of the U.S economy is pretty stable and investors are strongly in favor of the green bucks. However after the long anticipated rate hike from the FED investors are a little bit cautious in buying the green bucks as FED chairperson Janet Yellen stated that they are re going for at least three rate hike in the year 2017.The green bucks will gain a significant amount of strength in the global market if the FED manages to go for a three rate hike program but they must be extremely careful since such a high impact decision needs an extreme level of precision.

Three projected rate hike in the year 2017: The green bucks gained its strongest bullish momentum in the forex market after the long anticipated rate hike in the month of December 2016.The dollar index surged up and secured a record high in the market. Since the FED has projected three possible rate hike in the year 2017 investors are thinking that the dollar bulls will hold the ground firmly in the market. Moreover, the central bank will also give extensive pressure to the FED for at least two rate hike before the month of November. The central bank needs to readjust their inflation rate in the global market in order to retain the stability of their economy so at least two rate hike extremely vital for them. However, the FED are also cautious about the economy since an immature rate hike will significantly weaken the dollar in the global economy and push all its major rivals higher in near future. To be precise the investor’s world is now in a dilemma about the next movement of the green bucks. On the recent weakness of the U.S dollar, the price of gold also rallied hard. Before the strong rally in the price of gold, the gold market was slammed down into the ground by the 25 basis point rate hike.

Summary: The year 2017 is full important news release. The green bucks had gained extensive gained in the market and still holds the ground firmly as the FED have declared about their three projected rate hike in the year 2017.But despite the strong bullish tone, the recent fall in the U.S dollar index has given a massive shock to the investor’s community and most of the professional traders are thinking that the bullish run for the U.S dollar is near its end. However, a slight positive data will significantly push the dollar higher in the global market.