Followed by the escalation of US-China trade tension, the American dollar had been experiencing a mysterious rally since early September, which had carried the American dollar into its 18-months peak and there had been chances of breaching its key technical level at 98.00, while it was being traded near 97.72.
However, later part of the year, due to a series of dovish comments from Federal Reserve Chairman Jerome Powell and continuous scrutiny over US central bank’s monetary policy, American dollar failed to hold on, as it has now been trading slightly below 95.80.
Adding further stress in to the dollar rally, the Trump administration decided not to reveal its economic data amid partial government shutdown, which is also dragging the American dollar downwards.
Apart from these critical events, the Fed might not be able to raise interest rate twice next year, amid escalated tension between US and China, and there had also been a possibility of US-Japan trade war, as US seemed to be jawboned to reduce its trade deficit of $69 billion with Japan.
Hence, a forecast poll including financial analysts, economists and heads of financial organizations, predicted on Friday, December 28th, that the American dollar would end 2019 around 5 percent below current level.