Ticker tape by TradingView

December 16, 2021

Why 2022 Could Be A Great Year For The USD

Frank Cabibi

12/16/2021

A major end-of-the-year announcement from the FOMC yesterday waved a big bullish flag for the USD. Several factors were discussed in the conference including interest rates, inflation and tapering. Here is why 2022 could be a fantastic year for the currency:

Tapering Begins

The Fed decided to double the amount of asset purchases to a rate of $30 billion per month. By the month of January, they will only be buying $60 billion compared to what used to be $120 bn, and by March, the Fed should have reduced their purchases to nothing. This quick reduction of purchases will then be followed by rate hikes.

Fed Calls For 3 Hikes In 2022

After the Fed tapers in the early half of 2022, they will follow it up with three interest rate hikes which will likely equate to 0.75 basis points in total for the year. Although this is bullish news for the USD, it is still not set in stone with the concerns of omicron virus still lingering. Virus fears will likely persist in 2022, so the expectations of three hikes may be quelled if the problems with this strain gets worse. But, at least two seem promising for next year. These raises will help fight the CPI inflation factor that has risen 6.8% in the last month.

DXY

The US dollar index came a little off the highs around $96.9, but looks like it wants to come back up to that level once again. Price may have made a wedge formation on the 1D chart as higher lows and lower highs are taking shape. Support lies below at 95.545 and 94.600.

A1 Edgefinder

FLASH SALE
Take 40% off the Edge finder using code "READER"
GET ACCESS NOW

want to see what we're trading?

Join The VIP Community!
Our entries, exits & analysis
Live Webinar Coaching
Trading Chatrooms
Strategy Library 
Exclusive Trading Guides
Use Code "READER" for 10% OFF!
JOIN NOWJoin FREE Discord
A1 Trading Podcast
How These Factors Will Impact Oil Now

Oil prices have surged this year and have recently pulled back from the highs. However, there are some factors right now that will heavily influence the price of commodities in the long term. And it's important that we go over them so when the time comes, we'll have a better understanding of how to trade […]

Read More
We Like These Pairs For Next Week

As this week comes to a close, we are looking ahead at future setups that could be some of the best opportunities for the next several trading sessions. Here are some pairs for next week that we are looking at. EUR/JPY Recent data has shown a slow down in the German manufacturing sector. With European […]

Read More
More Downside On The SPX500 After This?

When it comes to testimonies, it's all in how you say it. Jerome Powell has to be very particular in the way he makes his statements and answers the ensuing questions. Here is what might be in store for the market in the coming days and weeks, and whether or not there will be more […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
homescreensmartphone linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram