Home » Forex » Intense situation in the global market as possibility of FED rate hike rises

The green bucks gained the strongest bullish momentum in the global market in the last year when the FED hike their interest rate on the basis of 25 points in the global market. During the FOMC meeting minute in December FED chairperson Janet Yellen has stated that they are going for possible three rate hike in the year 2017.Despite such a hawkish statement from the FED chairperson Janet Yellen, the green bucks suffered extensive selling pressure in the global market due to the miss commitment of the newly elected U.S president Mr. Trump. The dollar bulls rallied the market higher after Mr. Trump stated that they are going to increase the fiscal spending and increase tax cut policy for the betterment U.S citizen. Such an optimistic statement pushed the dollar higher against all its major rivals in the global economy. However, the market retreated after seeing no practical action regarding his commitment from the very beginning of the year 2017.Most of the professional investors made a decent profit by selling the weakness of the green bucks at that time. However, the dollar is still holding its ground in the global market as FED has given the investors a solid hope with their projected rate hike in the year 2017.

The bearish closing of the market: In the last week the U.S dollar failed against its all major rivals in the global market prior to the market closing as FED chairperson Janet Yellen pointed some clue to the trading community regarding the march rate hike by FED.There has a slight dump in the U.S dollar index which is the overall measure of the green bucks strength against the six major currency pairs in the world. The U.S dollar index traded at 101.94 in the global market with a cumulative drawdown of 0.22 percent. However, the U.S dollar index rallied hard on the last Thursday and secured a seven-week high in the global market at 102.26.In the last meeting, the FED officials clearly dictated that they might go for tighter monetary policy for the betterment of their economic performance. Most of the leading investors are now overly cautious about the next move of the FED officials since a large group of the trader’s community is expecting a hawkish rate hike in the upcoming FOMC meeting minutes. If the FED comes up with a hawkish rate hike than the green bucks will be back in action again with its former bullish strength against its all major rivals.

Strong bearish pressure despite of possible rate hike

The green bucks is currently under strong bearish pressure in the global market even though FED chairperson Janet Yellen has stated that a rate hike in march will be an appropriate decision of the economy. Some of the leading economists are thinking that an imminent rate hike in the month of March would not be appropriate since the U.S economy has not been stabilized under the administration of Mr. Trump. Since the FED come up with a clear statement in the last week the possibility of a rate hike has risen from 40 percent to 94 percent in the global economy. Most of the leading investors are now thinking that the market has already absorbed this data and the dollar is most likely to face bearish pressure in near term future even though a rate hike is imminent in the next FOMC meeting minute. If the FED comes up with a hawkish rate hike in the next FOMC meeting minute then we might see possible four rate hike in the year 2017.Some economist suggests that there is 17 percent of a chance that the FED will go for 4 rate hike this year.

Currency market overview: In the last week the dollar bulls rallied the market till Thursday while the dollar index secured a seven-week high in the global market. However, the dollar lost most of its bullish momentum prior to the market closing as FED chairperson gave a clear clue about the next output of the FOMC meeting minute. The EURUSD pair gained near about 0.48 percent in the global economy and traded at 1.0563 in the global market. On the contrary, the Great Britain Pound was gained little compared to EURUSD pair and traded at 1.2269 in the global market. There has been a decent slip in USDCHF pair for near about 0.35 percent and the pair traded at 1.0100.On the contrary, the USDJPY pair traded at 114.40 and managed to keep its bullish momentum in the market prior to the weekend closing. This upcoming week is going to play a major role for all the major currency pairs since a slight week data from the U.S economy will push the dollar index lower in the market which will ultimately cause a bullish rally in other major pairs.

Summary: Uncertainty is prevailing around the global economy regarding the next momentum of the green bucks in the global market. The dollar slipped against all its major rivals in the global economy prior to the market and most of the investors are thinking that the green bucks will remain under bearish pressure till the FED hike their interest rate in the FOMC meeting minute. However, some of the professional investors are considering this bullish rally of the major pairs against the green bucks as a golden trading opportunity. Some of the professional traders are even waiting for more bearish retracement of the U.S dollar index to buy the green bucks at a better price.

 

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