There is an extreme level of uncertainty in the global market as no investors have any clarity regarding the next movement of the green bucks. The U.S dollar slumped hard in the global market even after the Fed hiked their interest on the basis of 25 points in the global economy. On the contrary, the recent election campaign on France pushed the Euro higher against all major rivals in the global market and the investors are now in doubt regarding the long term bearish trend of the EUR/USD pair.
During the recent weakness of the green bucks, professional traders calculated their forex margin and made a decent profit simply by going long on the EUR/USD pair. Though the performance of the U.S economy is not up to the market on the current situation, most of the dollar bulls are still keeping their hope for another bullish rally due to the possibility of a rate hike by Fed in the upcoming FOMC meeting minutes.
Dollar pushes higher despite strong bearish pressure
In the last week, green bucks tried to recover its loss in the global market and closed with a slight bullish sentiment. The U.S dollar index, which is the overall measure of the green bucks strength against the six major currency pairs in the market, bounced hard after hitting the critical support level in the market.
Due to this recent bullish bounce, most of the leading economists are thinking that the green bucks might again create another selling pressure on its major rivals in the market in the near future. The U.S. dollar index went up by 0.14 percent in the global economy and traded at 99.03 prior to the international Labor Day holiday.
During this recent bullish surge in the green bucks, expert traders made a decent profit by taking an aggressive trade without incurring a forex margin call in their trading account. The EUR/USD pair slipped from its recent high and traded at $1.09 exhibiting weakness in its trend.
U.S consumer sentiment
The U.S dollar is currently under strong bearish pressure in the global market despite the mediocre performance of the U.S. economy. The green bucks gained immense strength in the global market after the U.S presidential election held on the 8th of November 2016 after the newly elected President Trump stated that they are going to increase the fiscal spending and include tax cut policy.
Such an optimistic statement from the U.S. government cared strong bullish sentiment in the global market and pushed the dollar higher.
However, the consumer sentiment turned extremely negative after Mr. Trump failed to keep the high promise and this ultimately pushed the U.S. dollar index from its 14 years high in the global market creating a high forex margin requirement for safe trading due to excess volatility. According to the leading economist, the U.S. dollar might face prolonged bearish pressure in the market due to the projected three interest rate hikes out which one has already been implemented. If the Fed manages to hike their interest rate for in the upcoming FOMC meeting minutes then we might see another bullish recovery attempt in the U.S. dollar.
Summary:The U.S. dollar is now under extreme bearish pressure in the global market as Mr. Trump failed to keep his promise regarding the increase of fiscal spending and tax cut policy.
Despite the strong bearish sentiment among the U.S consumers the dollar still remains supported in the global market as most of the leading investors are waiting for the next upcoming FOMC meeting decision. Most of the expert traders are currently on the sideline and waiting for the Fed rate hike decision. The Fed is most likely to hike their interest rate at least two times before the month of November as they will be pressurized by the U.S. Central Bank since they will need to readjust their inflation rate to bring stability to their economy.