Greenback Pulls Back as Traders Consider the Future

US dollar is lower today, dropping as Forex traders and analysts consider what’s next and try to look ahead to 2016.

Even though the greenback is lower today and set to end the week with losses, there are some expectations that 2016 might be the year of the dollar. For now, the dollar is down as Forex traders have, for the most part, already priced in the expected Fed rate hike next week. Uncertainty about the pace of future rate hikes are weighing the dollar.

Also sending the dollar lower recently has been a reluctance on the part of the ECB to follow through with its extravagant promises of easing, as well as indications that other economies are on the mend and could reduce the amount of policy divergence in 2016.

Still, though, many analysts and traders think that 2016 will be the year of the US dollar. Commodities could recover, stealing some of the dollar’s thunder, but many don’t see other economies as strong enough to challenge the United States.

At 14:52 GMT US dollar index is down to 97.554 from the open at 97.984. EUR/USD is up to 1.1004 from the open at 1.0946. GBP/USD is also higher, up to 1.5224 from the open at 1.5161. USD/JPY is down to 121.1020 from the open at 121.5680.

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