The uncertainty still remains in the market but most of leading economic researchers are suggesting that the green bucks will gain strength in the month of December since the current economic performance and the overall condition of the green bucks strongly favor rate hike in the month of December.
The green bucks have been suffering from extensive loss from the very beginning of the year 2016.The ongoing pending issue of the interest rate hike decision has also created massive chaos in the forex and stock market. However, things have settled down to a great extent in the recent days since the performance of the U.S economy is showing great promises in the global economy. In last Friday dollar becomes stronger against most of its major rivals in the forex industry which also caused a strong rally in the global economy. The recent strength of the U.S dollar is so far the best performance by the greenbacks considering the performance of the last two years. One of the most prominent index in the stock market is the MSCI index. The MSCI index has shares in 46 leading countries in the world which was significantly up during the early part of the European trading session. According to the leading investors in the stock and forex industry, the MDCI index was up 0.2% in the market which closed with a 1% gain during the Asian session in last Friday. Other than MSCI the performance of the European equities were firmly positive in the early morning of the trading session and it also showed a smooth rally in the defensive sectors including healthcare and utility unit which ultimately weakened the commodity stock market. There has been a decent fall in the pan –European STOXX 600 index after a strong third consecutive gain in the market and the index fell by 0.05 percent over the week.
The recent event of the US presidential election has also created massive confusion into the global world since Mr. Trump has pretty strict anti-social and trading policy. Before Mr. Trump get selected investors were in fear that his winning might shake the forexand stock market world to a great extent. But to an utter surprise, the green bucks gained back its former glory as Mr. Trump was selected as the 45th president of the US government. The shaky European shares were up by 4.5% in the event of Mr. Trump surprise victory in the presidential election. The overall market sentiment changed to bullish since the global economy is expecting much more spending from Mr. Trump in the upcoming days to strengthen the US shield which will ultimately increase the US inflation rate and thus result in positive and stable economic growth in the market. Though the market reaction is extremely positive in the event of the newly elected president but investors are in fear that the course of the dollar might face difficulty in the near term future due to Mr. Trump straight forward business mentality. Last week there has been a sharp decrease in the European energy stocks which resulted in a loss 0.5% in the market. On the contrary, the price of crude oil also fell by 1% as Saudi Arabic increased its supplies to their Asian clients. On the contrary, the recent performance of the Chinese imports has been sluggish in the global economy since the Chinese government is not fully ready to carry their export and import activities with full pace.
The ongoing energy crisis in the global economy has created a catastrophic price movement in the financial world and the investors are in fear regarding the next move of the price since OPEC has not yet been able to pull its trigger to the leading oil producing countries in the global economy. Due to the recent agreement with Saudi Arabia with OPEC regarding their output cuts in the month of February 2017 has also created a dramatic situation in the energy field. On the event of this oil production cap with Saudi Arabia, the other leading oil suppliers have increased their supplies in the market two months prior to their scheduled date. These have also affected the price of different currency pairs in the forex market. The sinking EURO has recovered loses to a certain and extent and rose by half percent to $1.0605 after hitting the low at $1.0518 in the global forex market on Thursday. This is the lowest dip in the EUROUSD pair since March 2015.The last two month has been a smooth heaven for the green bucks since it gains more than 6 percent strength in the market due to the strong economic performance of the US government. In eyes of economic expert, the recent gain in strength of the green buck might continue to dominate the forex market for the rest of this year since the FED is most likely to hike their interest rate in the month of December. If the FED comes up with a hawkish hike in the month of December then the green bucks will again blow all its major rivals in the forex market.
The recent ongoing pending interest rate hike decision by FED members has slowed the gain of green bucks in the global market since investors are staying on the sideline and waiting for the clear rate hike in the month of December during the FOMC meeting minutes. Though the U.S yields gapped higher in the market opening but the gains was erased at the end of the day due to lots of profit taking activities in the market.
