Fundamental Forecast for Dollar: Bullish
- The probability of a December 16 FOMC rate hike according to Fed Funds futures Friday is 74 percent
- Monetary policy is a steady fundamental current, but the true engine for the Dollar may prove liquidity and volatility
- See how retail traders are positioning in the majors in your charts using the FXCM SSI snapshot
The US Dollar this past week thwarted what could have been a nasty reversal that changed the balance of sentiment. Having already stretched to 12-year highs, a number of surveys mark long-Dollar as one of the most oversaturated trades in the market. Yet, the market is there for a reason…for good reason. Whether we are looking forward to steady markets where the glint of yield attracts investors or liquidity-levered volatility that sends a current of fear through the system, the Greenback will be a favored vehicle for investors. The key variable is one of intensity, and that will be put to the test with the holiday trading conditions.