Fundamental Forecast for Dollar:Bullish
- Through trading at a 12-year high, the USDollar Index has struggled to make meaningful progress
- While uncertain risk trends remain ahead, a horde of event risk ahead is anchored by a FOMC decision and US GDP
- See our 1Q 2016 forecast for the US Dollar in our Trading Guides page.
Technically, the Greenback (USDollar specifically) has advanced for fourth consecutive weeks through Friday’s close. That’s an impressive run especially considering it is marking serial, 12-year high closes. That said, the run is virtually devoid of conviction – which is momentum from a price perspective. The lift the currency has found to its present lofty level was founded mainly through monetary policy, and the premium it afforded has been largely absorbed. Yet, that doesn’t necessarily mark the end of the bulls’ control. A divergent rate bearing will be revived with a range of rate decisions led by the Fed’s meeting. What’s more, the stronger the push of all those catalysts tracing back to risk trends; the closer the market comes to unleashing the Dollar’s haven appeal.