Dollar slammed into the ground despite the U.S interest rate hike

Dollar slammed into the ground despite the U.S interest rate hike

5 May 2017, 15:15
Anna Agreeable

There has been a massive confusion in the global market due pending interest rate hike decision by the FED. In the last week, the FED hike their interest rate on the basis of 25 points in the global market. Most of the retail traders were surprised to see the sharp collapse in the green bucks despite the rate hike in the last FED meeting. The leading economist is suggesting that the dollar has rallied higher in the global market prior to the rate hike decision by the FED and once the data is released the market has nothing to give to dollar bulls since more than 94.3 percent of the traders were expecting a rate hike in the last FOMC meeting minutes. During that event, some of the optimistic investors thought that Mr. Trump will push the dollar higher in the global market after the FED rate hike decision but surprisingly Mr. Trump was reality neutral in his speech which pushed the dollar furthermore in the global economy. All the major rivals in the global economy rallied higher during that event and recovered a decent loss in the global economy.

Upcoming week scenario: The upcoming week is going to be very challenging for the dollar investors as the last week closed with a strong bearish threat to the green bucks. Most of the leading investors are thinking that the bearish rally in the mighty U.S dollar will continue this week and it’s a good opportunity to short to the dollar at the current moment. However, the some of the professional traders are considering it as a golden opportunity to buy the dollar on the dips since there is plenty of support both fundamental and technically for the green bucks. The early part of this week has nothing to offer to the dollar bulls but on Thursday the U.S unemployment data will be released in the global market. And if strong positive data is released on that day than the dollar might recover some of its losses in the global market and attempt for a bullish ride. However an imminent bullish rally in the green bucks is highly unlikely since most of the consumer’s sentiment is strongly negative at the current moment. But if FED chairperson manages to come up with a hawkish speech in Thursday than there is the chance for bullish recovery in the U.S dollar in near future. However the professional experts in the reputed forex broker is expecting mixed sentiment in the market.

Dollar still remains supported:  In the last week the green bucks secured a five-week low in the global market despite the interest rate hike decision. According to leading market analyst Fawad Razaqzada there is still remains a strong hope for the dollar bulls since the recent fall is considered as corrective moves for the bullish rally of the green bucks. Upon this statement, many traders are waiting for the next key support level in the U.S dollar index to buy the green bucks and ride the possible fresh bullish trend in the market. He also stated that the FED is most likely to come up with another hawkish statement in the global economy as they need another two rate hike in this year so that the U.S central bank can readjust their current inflation to an optimum level. In the last week, the dollar index dropped by 0.1 percent in the global economy and traded at 100.30 which is the five consecutive week low of the market. The low yielding Japanese Yen pushed the dollar lower for near about 0.6 percent in the global market and traded at 112.68 in the global exchange market. On the contrary, the EURUSD pair breached a critical resistance level in the global market and traded at 1.0740 after the news release.

U.S new administration: The dollar gained a strong bullish momentum in the global market after Mr. Trump become the U.S president in the last year. He pushed the dollar higher in the global economy by stating that they are going to increase the fiscal spending and include tax cut policy. But four-month have passed but there is no sign to increase the current fiscal spending and this has created an extreme level of negative U.S consumer sentiment in the global market. Most of the traders are now confused regarding the next movement of the green bucks as Mr. Trump administration is totally unpredictable and changeable. However, some of the optimistic traders are thinking that dollar will retain its former glory in the global market by the end of this. But some leading economist is suggesting that three rate hike in a single year under the unpredictable administration might create a long term adverse effect on the U.S economy. But things will turn extremely positive for the green bucks if Mr. Trump increases the current fiscal spending since it will create an extreme level of positive consumer sentiment in the U.S economy.

Summary: Trading the financial instrument has become a whole lot difficult in the recent days as the market dust is yet to settle down. Mr. Trump new administration policy s totally unclear and some of his statement is giving the dollar bulls a false hope in the market which ultimately gets wiped out by the bearish pressure of the news release. Though the current sentiment is not favoring the green bucks but the dollar remains still supported in the global economy as two more possible rate hike by the FED might create another buying pressure for the green bucks in the global market.

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