Investing.com — The has suffered a bruising encounter towards the greenback this 12 months, however may see some short-term respite if the post-December Federal Reserve assembly weak spot within the greenback strikes once more.
“Since 1999, the DXY index’s return for remainder of the 12 months after December FOMC had been unfavorable 64% of the time,” analysts at a Financial institution of America mentioned in a latest be aware.
This seasonal weak spot within the greenback may present some aid for the euro, which has been below strain towards the buck for a lot of the 12 months.
Any potential respite, nevertheless, may show be short-lived as “January seasonality tends to be extra bullish for the USD, with the DXY index greater 60% of the time,” the analysts mentioned.
Looking forward to 2025, the financial institution outlined two potential situations for the EUR/USD pair:
In a baseline situation the place the greenback consolidates after the FOMC assembly, the analysts recommend that “USD bulls may contemplate OTM EURUSD digi places at begin of Jan ’25 with higher value ranges.”
But when the FOMC’s Abstract of Financial Projections — set to be launched alongside the Fed’s price determination on Dec. 18 — is extra hawkish than present market expectations for 2025 price cuts, the greenback may finish the 12 months stronger. On this case, “EURUSD put spreads can be most well-liked,” the analysts mentioned.
