Dollar Back on the front Foot Again

General consensus around the market is that we’re seeing the start of holiday season trading patterns as we now have most of the big fundamental economic releases out of the way for the month and indeed for the year. The main themes are pretty much set into this week and the Christmas holidays with the market still concerned with the progress of the US tax reform plan and the UK’s Brexit. We will start to see markets become more flow driven as we move through the week as the lack of new data and thinning liquidity starts to take its toll on normal market conditions.

On Friday we saw the dollar and the stock markets recover once again as things looked better for the tax plan as the final draft was unveiled. The US stock indices all finished the week on much better levels and the dollar recovered its bid tone with the Dxy back near recent highs. The Sterling came off despite Brexit moving onto the next stage and we think this is possibly indicative of a bit of market fatigue with this particular subject.

It’s a much quieter week in terms of fundamental data this week and today’s calendar is particularly subdued with nothing in the way of tier 1 data due for released and only a couple of tier 2 announcements which are unlikely to stimulate much movement in the currencies. Traders will continue to focus on the main themes and any development there whilst as usual keeping a sharp eye on the news wires for any new significant geopolitical events across the globe.

Rakuten Securities Australia Review