Will the dollar mark an end for its drop and resume higher?Posted on Tuesday, September 12 2017 at 3:20 pm GMT+0000
Dollar Pulled away from 2 ½-year Low, supported by two main factors.
First, fears over further North Korean nuclear tests eased, with no additional missile tests in the current days.
Second factor is that Irma’s impact was downgraded, giving the dollar a chance to recover and increased risk appetite in the market.
But in the medium term, I think that pullback is just a corrective wave within the long term downtrend. Why?
Further tensions in the Korean peninsula cannot be ruled out yet. North Korea threatened that the US will pay a “due price” if it continues pushing for new sanctions.
Hurricane losses exceeded $200 billion and led to a rise in the public debt and the loss of many jobs and this would have a negative impact on growth in the third quarter of this year.
I think the Fed is unlikely to raise interest rates before the end of that year.
The Dollar will remain under pressure in the coming weeks.