The USD has had mixed fortunes against other currencies in 2017. For example, many traders expected the GBP/USD pair to come under tremendous selling pressure what with all the Brexit uncertainty plaguing the United Kingdom’s economy. In fact, sterling managed to pull itself out of the doldrums from a trading level of 1.23 at the start of the year to its current level of 1.34. The $0.11 appreciation is a remarkable feat for a currency under pressure.
In percentage terms, sterling appreciated by 8.94% against the greenback. It is worth noting the performance of the USD against other currencies, including the South African rand (ZAR), Euro (EUR), Japanese Yen (JPY), and the Australian dollar (AUD).
Given these broad trends across multiple economies in Asia, Africa, Europe and beyond, we can expect the USD to continue weakening over the short-term. Some positive news from the US economy bodes well for USD bulls. According to the latest US unemployment data, the total unemployment rate in the US is 4.1% and the civilian labor force in the US is 159.19 million people. The unemployment rate reflects the active labor force seeking employment, but unable to find it. In November, the US economy added 228,000 new jobs, in line with general trends since mid-2016.
A robust economy is reflective of what to expect for the USD moving forward. Now that Congress passed the $1.5 trillion tax cuts, the US economy will gain dramatic momentum from this move. Currently, the House and the Senate passed the sweeping tax reforms. For USD bulls and USD bears, the broader picture (the strategic perspective) is certainly positive for 2018.
According to Olsson Capital trading specialists, it’s pretty clear what a major tax overhaul could do for the US economy: “Companies that can retain more of their earnings after tax will certainly benefit from new legislation. The tax plan will boost the attractiveness of the US economy to foreign investors and generate massive and unprecedented growth. Many clients already expect the US economy to boom under Trump, despite all the naysayers who despise his draining of the swamp. Massive infrastructure projects could be on the cards once a tax plan overhaul is passed and signed by President Donald J. Trump.”
If you are interested in even more trading-related articles and information from us here at Bit Rebels then we have a lot to choose from.
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