December 2018 – IN BRIEF

What happened
  • Federal Reserve hinted at slowing down pace of hikes, thus slowing U.S. Dollar momentum
  • Consistent economic data kept the greenback afloat despite pressures; down only 0.3%
  • Oil prices fell around 30.0% in November, dampening chances of CAD or MXN going up
  • Brexit continued to wreak havoc on GBP as analyses of the potential deal considers it a disaster. Pound slid 2.0% in a month
  • Commodity-based currencies such as AUD, NZD, ZAR, and SGD rose on risk-appetite
  • Euro returned to positive territory as Italian budget woes faded with hopes of compromise
Tempus’ view
  • Trade issues likely will not go away as the U.S. stays the course on testing China
  • End of year may reflect doubt over economic growth, which could hurt the greenback
  • One more hike is expected from the Federal Reserve, but USD could sink on doubts over willingness for further monetary tightening
  • MXN and CAD could see better fortunes if the USMCA trade pact is ratified after being signed at G-20 Summit by all parties
  • Political turmoil, trade disturbances, and unprecedented situations will keep December interesting as dollar tries to close 2018 higher
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