020 7898 0500The US dollar (USD) continued on its march stronger overnight after Janet Yellen and the Federal Reserve decided to hike interest rates for only the second time in a year. The move appears to be a sustained one, as speculation now turns to how many rate hikes can be expected in 2017 – with 3 hikes being priced in. It was speculated at the end of 2015, however, that there would be 4 rate hikes this year and that didn’t quite materialise.
US Consumer Price Index and manufacturing data came in line with expectations, as did unemployment claims, and the US Philadelphia Federal Reserve Manufacturing Survey came out much better than expected. As has been the case for much of the second half of this year, however, data appears to take the side-lines as macro trends, such as interest rates and political events, take centre stage. Christmas is known to be a volatile time for the USD, as liquidity and flow through the market reduces. It will be interesting to see what this festive period has instore.
