There has been a massive chaos in the global industry due to the recent weakness of the green bucks. Most of the green bucks investors were expecting a strong bullish rally in the global market from the very beginning of the year 2017 but due to continuous negative data release from the from the U.S economy, the dollar slipped against all its major rivals in the global market. The dollar gained the strongest bullish momentum in the global market in the event of the U.S presidential election held on 8th November 2016.Mr.Trump surprised the whole world by stating that they are going to increase the fiscal spending and increase tax cut policy for the U.S citizen. Such an optimistic statement from the newly elected president pushed the dollar higher in the global market. But after two months Mr. Trump failed to keep his promise and it created extreme negative sentiment in the U.S consumer. This further intensified the last month fall of the U.S dollar index from its 14 years high in the global market. Most of the leading economist are thinking that the fuel of the dollar bulls is near its ends and it needs a strong positive data release in the U.S economy for another bullish run.
Recovery of the mighty dollar: In the last Friday the dollar recovered half percent against the major six rival’s currencies in the world after Mr. Trump implements 20 percent tax on the Mexican borders. The leading economist is considering this step as an extremely positive initiative from Mr. Trump since the U.S economy is going to earn a significant revenue from the border tax. On the other had in the last week press conference Mr. Trump stated that they are also working on the increased fiscal spending policy of the U.S government and this give a sign of hope to the optimistic dollar bulls. However, the market didn’t react violently to the release of such hawkish statement from Mr. Trump as it is the second time he stating the same thing for the U.S government. The professional traders are cautiously waiting for the political dust to settle down in the global market for taking low-risk trade in the market. On the contrary, the aggressive traders made a decent profit in the global market by selling the weakness of the green bucks from the very beginning of the year 2017.Currently, they are also remaining on the sideline as there is the major FOMC statement release on the upcoming Thursday.
Dollar ending the last week imposing a bullish tone: In the last week the dollar lost its ground in the early trading session due to fall of the core durable goods data in the market. In the last two days prior to the week closing the dollar bulls regained the control of the market as Mr. Trump focused on their economy and took a prompt step to reinforce their economy. Some of the leading economic researchers are thinking that Mr. Trump has shown his first business step in the global market by imposing 20 percent tax on the Mexican borders since, in the long run, it will greatly help the U.S economy. However in order to regain the whole control of the market the U.S economy need to perform well in the other major economic sectors. However large banks and institutions are a little bit worried about Mr. Trump initiative since it will most likely affect other country’s economy especially the Japanese Yen and the Swiss Franc. From the month of January, there has been a massive 4 percent drop in the U.S dollar index and investors are still in the smoke of cloud as Treasure Secretary Mnuchin indicated some sectors for further development.
Potential market adjustment by leading authority: Most of the leading analyst in the world are now thinking that the dollar will remain mixed in the global economy until the FED hike their interest rate for the very first time in the year 2017.In the December FOMC meeting minute, the FED have declared that they are going for at least three rate hike in the year 2017 and the first rate hike will significantly boost the dollar against its all major rivals in the global economy. On the hand, the market will become extremely positive for the dollar bulls if Mr. Trump takes initiative on regarding fiscal spending policies and a tax cut. In the last Friday during the European trading session, the dollar index gained near about 0.3 percent in the global economy and traded at 100.66 after hitting the seven-week low at 99.793 on Thursday. Considering all the parameters huge uncertainty prevails in the financial market regarding the next movement of the green bucks. The upcoming is going to pay a major role for the green bucks as there much important news releases both for U.S dollar and the EURO. If Draghi comes with a hawkish statement in the ECB press conference then there is strong chance that the dollar will remain to subdue under the EURO bulls.
Summary: The upcoming week is going to play an important role in the financial industry since there are lots of important news release in the market. Most of the dollar bulls are now waiting for an immense rate hike by the FED since it will greatly help them to gauge the market next movement. On the other hand, the conservative traders are cautiously waiting in the sideline for ECB press conference and FOMC statement to get a clear overview of the market sentiment and economic performance of the leading financial countries.