Dollar Continues to Strengthen

It has all been about the dollar over the past couple of days ever since the Fed announced a hike in rates and also gave enough hints to the market to believe that there would be atleast 2 or 3 more rate hikes in 2017. This was a bit more than what the market had expected, the markets always tend to assume a lot more than what it actually intends to, and this has been sending the dollar into the stratosphere as the dollar bulls have been buying the dollar left, right and center and there does not seem to be any end to this trend in sight. The euro has been the worst hit as the EURUSD crashed through 1.0500, which was a strong support region, and has since gone below 1.0400 and with these levels being the lowest since 2002, there is basically nothing by way of support between where it is now and parity. We believe that the pair might reach parity within the next couple of weeks if the dollar strength continues.

It has been a comparatively quiet morning so far in the markets as the short term trends seem to have been set in stone for now. The USDJPY continues to gain and has broken through 118 over the past 24 hours and it looks set for more as long as the US yields continue to move higher and higher. The commodities have been dropping against the dollar onslaught and the gold and silver prices seem set to continue to fall as the Fed prepares itself to hike rates even further in the medium term.

Looking ahead to today, there is not much economic news from any part of the world as we enter into the second half of the last month of the year when the holiday mood sets in and the liquidity begins to dry up slowly. Expect the dollar strength to continue during the course of the day.
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