The dollar continues to tremble against the wake of the euro despite having multiple hawkish and positive outlooks from the Federal Reserve and its new chairman. The euro, on the other hand, continues to rise further on US’ lack of inflows.
Market analysts and strategists recently announced that the dollar may need more than a hawkish tone to recover this year. The currency has been on a massive downtrend ever since the year started as great commodity prices rain.
According to reports, the dollar needs at least 3 or more interest hike from the Federal Reserve to have a notable impact on the market. The massive price reductions it has in the first couple of months this year continues to extend this month.
Dollar’s 2018 performance
All-in-all, the dollar is experiencing a massive 2% price decline this year from the past 3 months. It continues to shed prices as oil inventory reports continue to buoy the commodity further, trampling the greenback’s surge.
Furthermore, the dollar has entered this year with a massive 10% decline from the previous one. The dollar continued its losing streak this year, and a hawkish tone is not enough to pull the prices up as neighboring currencies surges on great economic data.
Net Equity and Dollar Relationship
Diving deeper, the scuffle of the country in fulfilling its current and net equity flow deficit which is currently around the $600 billion still weighs the currency down. This is the main reason why the dollar continues to struggle to a significant surge, despite having multiple positive reports.
Currently, the dollar can side with the possibility of rapid interest rate hikes the Fed is looking to pursue. These interest rates hikes are the most important factor for any currency to recuperate some of their losses and exponentially bring the currency up.
Moreover, the currency is looking to experience a rapidly paced interest rate hike this year. Furthermore, the market can expect U.S.A. to have the highest and fastest rate of interest rate hike in the whole conglomerate of G10 country.
Looking at its price today, against the euro, it is currently trading at a total of $1.28. The euro manages to beat the dollar in today’s market after trading at a $1.24 price mark just a day before.
The euro price is going up due to the fact that the Eurozone continues to post robust economic growth. This also managed to pull the long-running bonds buying the government had in a while. The bonds buying are expected to hit a halt by the end of the year.
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