Dollar bulls fuels up as Trump states on U.S tax reforms
There has been massive chaos in the global industry from the very beginning of this year since Mr. Trump failed to keep his promise regarding the increment in the fiscal spending and U.S tax cut policy. Mr. Trump stated that they are going to increase the fiscal spending of the U.s government and included tax cut policy for the betterment of the U.S citizen and this gave the dollar huge boost in the global market after the U.S presidential election held on 8th November 2016.However, things settle down to a great extent as Mr. Trump failed to keep his promise in the last year. Most of the professional traders are now thinking that the market has already absorbed the bullish heat of the green bucks and in order to start a fresh bullish rally, it needs another high impact news release favoring the green bucks. In the last month, the dollar bulls suffered from an extreme level of selling pressure in the global market as most of the investors were selling the green bucks with high risk and eventually managed to make a decent profit in the global market. However, in the last week, the green bucks showed some bullish momentum in the market prior to week closing.
Possible tax reforms in the U.S economy: In the last week Mr. Trump attended a meeting with the Japanese Prime minister Shinzo Abe where he stated that they are going to implement tax reforms in their state very soon. Most of the investors were thinking that Mr. Trump will not implement tax reforms within a short period of time but such an optimistic statement from the U.S president gave the dollar bulls a solid ground in the global economy. Most of the leading investors are thinking that the dollar will remain broadly stronger against its all major rivals in the upcoming week against its all major rivals. Most importantly Mr. Trump stated that they are going to implement tax reforms within the next two or three weeks and this time specific time period has secured a solid platform to the dollar investors. During that event, the EURUSD pair traded at $1.0608 in the global market the lowest level since January 19, 2017.On the contrary, the green bucks rallied higher against the low-yielding Japanese Yen and traded at 113.85 in the global market. There has also been a decent gain of 0.3 percent in the dollar index which is the measure of the overall strength of the green bucks against the six major currency pairs in the world.
Green bucks secured two-week highs prior to market closing: In the last Friday, the green bucks secured two weeks high in the global economy as Mr. Trump statement regarding tax reform created a positive U.S consumer sentiment. On that event, the Great Britain Pound sharply dropped in the global economy for near about 0.27 percent and traded at 1.2464.On the contrary, the USDCAD pair gained near about 0.08 percent in the global market and traded at 1.3136.The dollar becomes broadly stronger upon the release of such statement from Mr. Trump. Most of the leading economist in the global economy is thinking that the dollar bulls might find a way back to regain their position in the market if Mr. Trump actually manages to keep his word. However, some of the leading investors are still in fear since Mr. Trump failed to keep his promise for the first time and they are in doubt about his word since it’s the second time he has been stating this same thing. However, there has also been a decent rise in the U.S dollar index from a critical support level in the global market and traders are thinking that the upcoming week might be for the dollar bulls.
A possible rate hike in next two month: The dollar is still holding its ground firmly in the global market as there has been three project rate hike by the FED in this year. Most of the leading economist are thinking that there is 60 percent chance that the FED will hike their interest rate in the month of March. If the FED hike their interest rate in March than the dollar will push all its major rivals in the global economy. On the contrary, a fall in the rate hike associated with a dovish statement from FED chairperson Janet Yellen will weaken the dollar significantly in the global economy. On the contrary, the U.S central bank will also pressurize the FED for at least two rate hike before the month of November so that they can adjust the current inflation rate of their economy. Adjust the inflation rate is extremely important since it impacts the economy in the longer time frame. Most of the leading investors are now in the idle line and waiting for a clearer clue to buy the dollar in the global market.
Summary: There has been a decent turn around by the green bucks prior to week closing as Mr. Trump stated that they are going to reform the tax within in next three week. If Mr. Trump manages to keep his promise this time than the dollar bulls will be back again in the market pushing all its major rivals down in the global economy. On the other hand, the dollar remains broadly supported as there is 60 percent chance of rate hike by the FED in the month of March. Considering all the parameters the dollar bulls are still in control of the market despite their weakness.