Dollar’s days in doldrums may end in December as Fed likely to silence ‘pivoteers’

Dollar’s days in doldrums may end in December as Fed likely to silence ‘pivoteers’
Dollar's days in doldrums may end in December as Fed likely to silence 'pivoteers'
© Reuters.

By Yasin Ebrahim — The has been on the ropes since mid-October, but its wobble can be explained away by profit talking and could be nearing an end as soon as December, when the Federal Reserve is expected to squeeze the life out of the “pivoteers” once again.  

“We expect a strong dollar until at least the Fed Funds rate peaks in Q1 next year, and the market is able to price in a definitive Fed pause,” Oxford Economics said in a note, attributing the recent pullback in greenback to the “squaring of overstretched Dollar longs.”

The dollar’s date with destiny isn’t far away. In just under a month, the Federal Reserve Open Market Committee is set to deliver another widely expected rate hike, which is currently forecast to be 0.5%, according to’s

That would mark a slower pace of rate hikes from the jumbo-sized 0.75% rate hikes delivered at each of the last four . But the focus, for the greenback at least, will squarely be on whether the central bank believes its job of curbing inflation is nearing the end game, paving the way for a pivot.

Recent data pointing to slowing has brought out the “pivoteers,” but the messaging from a slew of Fed members this week suggests the Fed isn’t eager to declare victory against inflation just yet. The release of the Fed’s minutes from its October meeting is likely to reinforce the message.

The pivoteers have “already been rebuffed by recent Fed-speak once more, but the coming week is likely to reinforce this message,” Scotia Economics said in a note, ahead of the Fed minutes expected next week.

At the December meeting, the Fed will likely continue to insist that a pause is unlikely to come sooner rather than later, helping to stabilize the dollar.

“If the Fed continues to push back the “inflation has turned” narrative – which we expect – then the dollar will consolidate its gains around current levels and not weaken much further,” Oxford Economics added.

Leave a Reply

Your email address will not be published. Required fields are marked *

New Brokers
2.8 rating
Buy & sell Crypto in minutes
3.0 rating
Note: Investing involves risks. You can lose your deposit. We advise you to only invest in financial products which match your knowledge and experience.
2.0 rating
Interactive Brokers attracts active traders with low per-share pricing, an advanced trading platform.
4.3 rating
eToro is the world’s leading social trading platform, with thousands of options for traders and investors.
Risk Warning: The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory or other services by AdonFinance. In addition, the content of the website offers no opinion with respect to the suitability of any security or any specific investment. Trading foreign exchange, stocks, cryptocurrencies and commodities is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against traders. Before any investment with any broker you need to carefully consider your targets, previous experience, and risk level. Forex trading can result in the loss of your money, as a result, you are expressly cautioned that you should never invest or trade with money that you cannot afford to lose. For the avoidance of doubt, AdonFinance's service provides Brokers reviews in the Financial market. AdonFinance, its subsidiaries, agents or affiliates will assume no responsibility whatsoever for your trading activity. © Copyright 2021 AdonFinance