Why”‹ “‹will”‹ “‹the”‹ “‹End”‹ “‹of”‹ “‹2017″‹ “‹be”‹ “‹Challenging”‹ “‹for”‹ “‹the”‹ “‹USD?
Forex News Today: Daily Trading News

Why”‹ “‹will”‹ “‹the”‹ “‹End”‹ “‹of”‹ “‹2017″‹ “‹be”‹ “‹Challenging”‹ “‹for”‹ “‹the”‹ “‹USD?

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2017 has been a challenging year for the USD and the fourth quarter may also see  some grey clouds too.

Despite this, traders still questioning whether there will be a silver lining for the  currency.

With all the endless energy from Bulls and Bears where evidence of bottoming, bearish  price action returned to punch prices down to new lows and with the same happening in  opposite market trend, has been quite fascinating to watch.

Throughout Q3, we have had two different periods where the USD appeared to try to  set some longer-term support. November saw the USD experience some hard-knocks,  looking at the play from various angles or potential risks particularly from a geopolitical  standpoint, but not entirely dominated by the bears as yet.

Below are some of the predictable factors that need to be considered when analysing  the USD for the last quarter of the year:

The Trump Administration

The chaotic administration of US President Donald Trump, together with his sharp  tongued, quick to pounce attitude, has seriously reduced confidence in the greenback  whilst tarnishing global economic and political relationships globally.

Since his inauguration,Trump has started fights with one government after another,  including allies like Australia and Germany. Most recently, Trump took the world to the  brink of nuclear war by crossing swords with North Korean dictator Kim Jong-un.

The USD will continue to be challenged as the big question is whether investors globally  will continue to put the trust in the currency of a country whose leader proudly provokes  North Korea with threats of war, or will the global players find financial security  somewhere else? A question that continues to patronize investors.

US Republican Tax Plan

Despite progress on tax reform and the prospect of a Federal Reserve rate hike in  December, the U.S. dollar has struggled.

Here, the market may have caused the possibility of a rate hike to be priced in  convincing the markets of an interest rates rise in December. Despite this, the most  recent economic reports have been far from encouraging. Retail sales growth beat  expectations but at 0.2% the increase was weak especially compared to the 1.9% rise
in September.

Inflation have been subdued while manufacturing activity in both the New York and  Philadelphia regions pulled back, due to lower food and energy costs. In spite of these  figures, the Federal Reserve could possibly still be reasonably focused on raising  interest rates in December but they could lead to a more cautious guidance for 2019.  Investors are worried about a ‘cautionary’ air surrounding interest rate decisions along  with tax reform in order to justify reasons behind why the USD could be having trouble  rallying despite the possibility of another rate hike.

Potential Risks of Nuclear War between America and North Korea

Based on what is thought to be the only strategic goal of the US, which is  ‘denuclearization’, many seem to have been calling for the US and its allies to  undertake crippling financial sanctions against North Korea

However, this mission of the US may bring about some practical problems which may  include the collateral costs that would result in more imminent risks and threats to the  U.S. strategic position in Asia, as well as a probable failure of the sanctions in achieving  their goal.