In the last week, the American currency surprised t he markets by hitting one year high levels at 101.54 following President elect Donald Trump’s victory on 9 th November’16. In his post winning speech, Donald Trump promised to increase government spending, cut taxes and ease financial regulations.
This has infused optimism in the market that his mix of policies could spur a still – fragile global economic recovery. Even the US Federal Reserve Chairwoman in her recent speech stated that America would get a rate hike pretty soon which boosted the demand for DX.
She believes that delaying rate hike might force the Fed’s hand in the future and cause economic and market disruptions. Keeping in mind the recent statement made by some of the US Fed policymakers, it is quite evident that there is a hawkish minority on t he Federal Open Market Committee.
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