USD Takes Another Dive Before the FED – US Senate to Blame Probably?

The US Dollar has been kicked down this week as the last FED meeting for the year approaches. The FED is widely anticipated to increase interest rates one last time before the year ends, but the market has assumed that the FED will sound dovish today and decelerate the pace of rate hikes next year, that’s why the Dollar has been declining.

The decline stopped during the European session and we saw signs of a comeback from USD buyers. But as the confidence was growing we saw another wave of USD selling. EUR/USD finally broke above the 1.14 level which offers a strong resistance zone around it.

USD/JPY resumed its bearish trend and seems to be headed to 112 now while Gold jumped nearly $10 higher. Gold had formed a strong resistance area around the $1,250 level but that level was finally broken during that surge higher.

I didn’t find any reason for that sudden USD flushing apart from US Senate republicans pushing ahead to introduce a nee bill to fund the government until February. Donald Trump and the democrats have been arguing about the bill to fund the wall between the southern US border and Mexico and it seemed like the US government was heading towards a shutdown. This is the only development in the last few hours so it was probably this which sent the USD down again.