USD failed to gather momentum despite Fed rate hike

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American dollar, EURO, NZD and Global scale sell-off trending points

  • American dollar may have regained some of its losses, yet it failed to throttle a full potential, as Trump Administration threatened a long border lock with Mexico
  • EUR/USD pair is down closer to 1.1400s, failed to gather sufficient momentum to breach above its key resistance at 1.1500, despite improvement on the political issues.
  • The Kiwi is underperforming in today’s (Friday, the 21stof December) Asia Pacific session, as it posted its slowest growth figures (0.3%) in 5-year timeframe.
  • Global scale sell-off persists, as FED hiked rate for the fourth time in a year, and almost every kind of industries ranging from industry giants to emerging markets are having troubles to fit themselves.

American Dollar set to enter its worst week in 3 months

When this report is being written, (GMT.15.30, the 21stof December), the USD has been traded around 96.16 and it had recouped some of its earlier losses. However, it had been whirling around its worst week in three-month timeframe, as US president Donald Trump sputtered about the chance of a border lock with Mexico, if the Democrats say no to border bill.

American Dollar daily chart (September 2018- December 2018)

USD daily price chart

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Meanwhile, the USD lost its free haven against Japanese Yen, as Nikkei 225 had been gliding downwards on the wake of a dwindling demand and tightened economy. However, the American dollar kept gaining against the Canadian dollar, as the Canadian CPI frustrated the buyers again, and the USD/CAD pair has been trading closer to 1.3550.

Followed by the FED rate hike, the global scale sell-off gathered pace as anticipated. During the Asia Pacific session, the Asian stocks fell again and the today’s tottering had been led by the Nikkei 225, as it drained over 1.11 percent. While Kospi and ASX 200 had also posted losses, the Shanghai experienced a dithered market. None the less, the US stocks had paused their plunging, as during the opening of US session, the S&P 500 had been slightly up and the Dow Jones Industrial was up by 0.44 percent.

Bottom Line

At this standpoint, the FED rate hike should gather further momentum for American dollar, while the US shares, alongside, global stocks, might experience further fall. However, the forecasted scenario had been dilatory, as there had been political turmoil over the US soil and it was dragging down the US dollar below 96 regions, which might help to pause the global-scale sell-off, along with an improvement in US-China trade war and ratification on Italian budget.

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[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]

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