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Growth of the US dollar on the New Years’ eve put traders in an odd position

Yesterday meeting of the FOMC open market operations, which caused dollar to increase to 14 year maximum, was the last big event in the economic calendar of 2016, and this puts traders into an odd position.

15.Dec.16 11:54 AM
By Anna Tuzova


Growth of the US dollar on the New Years’ eve put traders in an odd position
To be reminded, the sharp rise of the American currency was not linked directly to the FOMC’s decision to raise the key rate (the majority of the market participants were sure of its rise), but to Federal Reserve’s plans to increase the rate triple in 2017. In its previous forecast the regulator included the probability of two increases. 

The most of market participants were waiting of the increase of the key rate. It was the obvious decision, according to Nomura trader John Gorman.

As a result, Yen fell more than 10% in relation to USD; the EUR/USD pair has descended to the lowest rate since 2002. The technological breakthroughs would be the strong signals to buy the USD any other time, except for the end of the year. Despite the whole dollar’s attractiveness, it’s hard to trade 15 days before the New Year, according to Adam Button, the managing editor of ForexLife.

It doesn’t mean it’s bad time now to buy dollar, but to check the signals every half of an hour is not the best way to prepare for 2017, as Adam Button pointed out.

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