forexcryptozone — The greenback has endured a troublesome encounter in opposition to the greenback this yr, however may see some near-term respite if greenback weak spot following the Federal Reserve's December assembly happens once more.
“Since 1999, the DXY Index's return for the remainder of the yr after December FOMC has been adverse 64% of the time,” Financial institution of America analysts mentioned in a latest word.
This seasonal weak spot within the greenback may present some aid to the euro, which has been below stress in opposition to the dollar for a lot of the yr.
Any potential respite may show short-lived, nonetheless, as “January seasonality tends to be extra bullish for the greenback, with the DXY index larger 60% of the time,” analysts mentioned.
Seeking to 2025, the financial institution introduced two potential eventualities for the EUR/USD pair:
In a base case situation the place the greenback consolidates after the FOMC assembly, analysts recommend that “greenback bulls may contemplate OTM EURUSD digi places choices in early January 25 with higher worth ranges.”
But when the FOMC's abstract of financial projections – anticipated to be launched alongside the Fed's Dec. 18 charge resolution – is extra hawkish than the market's present expectations for charge cuts for 2025, the greenback may end the yr in energy. On this case, “EURUSD put spreads can be most well-liked,” the analysts consider.
