The USD didn't manage to strengthen against the Euro, despite the Fed's announcement of a tightening in monetary policy over the next few months.
The dollar struggled to maintain the strong rally it saw in the immediate aftermath of the US presidential election last year. Trump's slower than expected implementation of policies, such as tax cuts and fiscal stimulus, accounted for the dollar's weaker performance in May. Furthermore, the French presidential election, which regained the market confidence in the eurozone with Macron’s win, also had an impact on underwhelming US dollar performance.
However, as long as the Dollar Index remains above 96, we remain bullish on the Dollar, as weak performance of other major economies, together with Fed’s tightening and policy reforms, will eventually drive demand to the global reserve currency.
The US non-farm payrolls will be the number to watch this Friday, with a forecast of 186K new jobs – lower than May’s released number of 211K.
The dollar struggled to maintain the strong rally it saw in the immediate aftermath of the US presidential election last year. Trump's slower than expected implementation of policies, such as tax cuts and fiscal stimulus, accounted for the dollar's weaker performance in May. Furthermore, the French presidential election, which regained the market confidence in the eurozone with Macron’s win, also had an impact on underwhelming US dollar performance.
However, as long as the Dollar Index remains above 96, we remain bullish on the Dollar, as weak performance of other major economies, together with Fed’s tightening and policy reforms, will eventually drive demand to the global reserve currency.
The US non-farm payrolls will be the number to watch this Friday, with a forecast of 186K new jobs – lower than May’s released number of 211K.