Investing.com — The has suffered a bruising encounter in opposition to the greenback this yr, however might see some short-term respite if the post-December Federal Reserve assembly weak point within the greenback strikes once more.
“Since 1999, the DXY index’s return for remainder of the yr after December FOMC had been adverse 64% of the time,” analysts at a Financial institution of America stated in a latest notice.
This seasonal weak point within the greenback might present some reduction for the euro, which has been below strain in opposition to the dollar for a lot of the yr.
Any potential respite, nonetheless, might show be short-lived as “January seasonality tends to be extra bullish for the USD, with the DXY index increased 60% of the time,” the analysts stated.
Waiting for 2025, the financial institution outlined two potential eventualities for the EUR/USD pair:
In a baseline state of affairs the place the greenback consolidates after the FOMC assembly, the analysts recommend that “USD bulls might think about OTM EURUSD digi places at begin of Jan ’25 with higher worth ranges.”
But when the FOMC’s Abstract of Financial Projections — set to be launched alongside the Fed’s fee resolution on Dec. 18 — is extra hawkish than present market expectations for 2025 fee cuts, the greenback might finish the yr stronger. On this case, “EURUSD put spreads can be most well-liked,” the analysts stated.
