As expected the dollar has slightly lost its ground in the global market from the very beginning of this year 2017.The leading investors in the global world were worried about the sustained of the strength of the dollar index after it retreated back from its 14 years high in the global market. In the last couple of months, the green bucks have gained an immense amount of strength in the global market as FED raised their interest rate on the basis of 25 points. The green bucks gained the strongest momentum in the market in the global market on that event and the dollar index secured a record high, a level not since for the last 14 years. However prior to the year closing the dollar index fell sharply from its 14 years high in the global market and most of the traders considered this sharp fall as a clear indication of the losing of the green bucks strength. Most of the professional traders wait patiently in the sideline since the market ceased most of its volatility due to the Christmas holiday. However, we are now seeing a decent amount of volatility in the market since traders are now participating in the market with full swing.
Future of the green bucks: In the last FOMC meeting minutes FED has raised their long anticipated interest rate and most of the traders in the options trading industry went long on the green bucks. The dollar gained a solid ground in the market since FED chairperson Janet Yellen stated that they are going for possible three rate hike in the year 2017.Since the equity traders have access to lots of financial instrument in the global world, most of the professional traders picked the most volatile stock in the market to trade the green bucks strength. However, some of the leading investors are overly cautious about the green bucks’ strength after the recent fall of the dollar index from its 14 years. The dollar index is the overall measure of the green buck’s strength against the six major currencies in the world. The leading economist is suggesting the green bucks bull be extremely careful since possible three rate hike by the FED will be extremely difficult for them since they need to look at every possible sector of their economy. Most importantly if they go for an immature rate hike in the global market then the green bucks are most likely to suffer in the long run.
Precious metal market: Most of the retail traders in the global market have access to the different financial instrument in the world from a single trading account. The most reputed brokers in the world have done an outstanding job by creating a one trading account which offers the trader to trade all the tradable assets in the market. The professional traders are now putting their call and put options in options trading with a great level of ease since they don’t need to worry about their running trades in the market. The can easily assess the price movement of stocks and precious metal in their robust trading platform and can execute their orders instantly. The price of gold recently bounced back from a critical support level in the market and most of the traders are thinking that a long term bullish reversal is going to take place in the precious metal market. But in the last trading week, the green bucks achieved its former strength in the global market upon the strong retail sales data and pushed the price of gold lower. However, the gold traders are still cautious since the dollar has secured a strong stable ground in the last trading week.
Fundamental outlook: Fundamentally the over scenario for the green bucks stills remains broadly supported in the global market and still options trading community is not will to go for put option in the green bucks. In the last trading week, the dollar gained some bullish momentum in the market against the EURO and the Japanese Yen. However, both the Japanese Yen and the EURO closed their trading week with a positive gain in the market. In the last week, the U.S retail sales increased by 0.6% in the global economy and this clearly indicates strong positive consumer sentiment in the U.S economy. Most of the leading traders in the world were expecting 0.1 to 0.2 percent gain but the green bucks surprised by the market by the strong retail sales data of the U.S economy. All the professional traders are now more concern about the green bucks’ strength since the U.S central bank will pressurize the FED for at least two rate hike in the month before the month of November in this year to balance their current inflation rate. If the FED can go for at least two rate hike in this year then we will a strong bullish rally in the U.S dollar index in the near future.
Summary: In the last week the dollar ended up by imposing a bullish threat to all of its major rivals in the global market. The professional traders are now sitting in the side line since the dollar bulls have not secured a stable position in the global market. But the leading economist is expecting stronger U.S dollar in the upcoming days as U.S economy is most likely to exhibit strong performance. Meanwhile, the stock market is now pretty much stable compared to the currency market and traders are making a nice profit out of it.