Dollar pushes higher while Greek get backs in limelight

7 months ago forexsimulation 0

There has been a massive confusion in the global industry as no investors are clear about the next movement of the U.S dollar in the global economy. Under the administration of the newly elected president Mr. Trump, there has been a lot of chaos in the global market as he keeps on promising things which he barely executes. The green bucks gained the first boost in the U.S economy after Mr. Trump stated that they are going to increase the fiscal spending and include tax cut policy in the U.S. Such a promising statement from the newly elected president pushed the dollar higher against all of its major rivals but soon the market digested the bullish momentum of the green bucks as Mr. Trump failed to keep his promise in the global market. However, the dollar bulls were not completely eradicated from the global market as FED chairperson Janet Yellen stated that they are going to hike their interest rate for at least three times in the global economy. This statement was passed from the FED chairperson Janet Yellen in the month of December when they hike their interest rate on the basis of 25 points in the global economy and gave the dollar strong bullish push.

The impact of Japanese trade data on U.S dollar: In Monday the green bucks gained some bullish momentum against all its major rivals in the global economy as Japanese trade data showed a wide gap in the global economy while the U.S market was closed for public holiday. On the other hand, rumors are spreading that the Greece is trying to implement the bailout program at a much faster rate which will directly impact the bullish strength of the green bucks. There has been an increase of 1.3 percent in the Japanese export in the month of January which is significantly below the expected data. The expected data was 4.7 percent gain. On the contrary, the import of Japanese government significantly rose by 8.5 percent which clearly exhibits a trade deficit of 1.087 trillion Yen while the expected data was 637 billion. According to the economic researchers, there has been a significant drawdown in the Japanese economy but the impact was neutralized to a certain extent after the recent slip of the U.S dollar index. Most of the leading economist are now in doubt about the next movement of the green bucks as the FED stated about projected three rate hikes in the global market in the year 2017 but the current performance is not meeting the requirement to hike the interest rate.

Impact on currency market: Though the green bucks are not imposing enough bullish momentum in the global market but in the last week the dollar bulls control the currency market to a certain extent in the early part of the week. The Mighty green bucks gained 0.06 percent against the low-yielding Japanese Yen and the Aussie dollar was up by 0.08 percent and traded at 0.7668.There has been a decent gain in the EURUSD pair for near about 0.12 percent in the global economy and the pair traded at 1.0628.However prior to the market closing the dollar bulls were able to put a decent threat to the Euro and ended the week with a bearish tone. Most of the leading economist are looking at the Greece bailout program since it has the potentially to shake the currency market intensively. The U.S dollar index traded at 100.89 which is a measure of the over the strength of the green bucks against the six major currencies in the world and the traders are thinking that the dollar index will jump higher from this current level.

The possible rate hike in March: The dollar still remains broadly supported in the global market as most of the investors are keeping it in mind that there strong chance three rate hike in this year. According to the FED rate hike monitor tools, there’s 60 percent chance that the FED will hike their interest rate in the month of March in their FOMC meeting minutes. However, some of leading economist in the world are overly cautious about the FED imminent rate hike in the month of March as the current economic performance of the U.S economy is a little bit slow compared to the last year closing performance. Some are thinking that an immature rate hike will significantly weaken the U.S economy in the long run and it might have heavy adverse effect in the global market. However, the U.S central bank will also pressurize the FED for at least two rate hike before the month of November since they need to adjust the current inflation rate of their economy. If the FED fails to hike their interests rate as proposed than the U.S central bank will have a tough time to maintain the stability of their currency strength in the global market.

Summary: There has been a massive chaos in the global market regarding the green bucks’ next movement. Most of the leading investors in the world are thinking that the green bucks will lose its strength in the global economy if the FED fails to hike their interest rate in the month of March. However, Janet Yellen testified that their economy is doing pretty well and they are still determined for three rate hike in this year. Currently, the U.S dollar index is also trading near a critical support level so the dollar bulls might take control of the market at any moment.