Gaurav Kashyap

First resistance at the channel between $35 and $35.50 expected with second resistance at $36.90 levels, writes Gaurav Kashyap.

There will be intense scrutiny of the US data docket throughout this year and heightened levels of volatility through each of the major releases.

An improving data docket over the course of November has given the Fed a decent foundation to justify an interest rate increase.

The US economy has not built enough momentum to justify a rate hike, writes Gaurav Kashyap.

The volatility experienced in the markets over the course of the past two months, triggered by China’s slowdown, had originally pushed back expectations of a Fed rate increase as early as September.

Market expectations are tied now, closer than ever, to the Fed in anticipation of a potential rate increase and this will be the predominant theme in the future.

Market sentiment dictated there had been a breakdown in negotiations over the past few days in which the euro has slipped even further against its major currency peers.

With the recent run of anaemic numbers – it is almost impossible for a rate hike to materialise in the summer months, writes Gaurav Kashyap.

Since July last year, the US Dollar Index has gained 23 per cent – a staggering nine consecutive months of higher closings.

Brent gained more than 18 per cent on the month to stabilise over US$62 a barrel, while WTI gained 3.57 per cent to close the month just below $50.

Euro-dollar pricing action will remain volatile this month, writes Gaurav Kashyap.

Markets can poise themselves for the first US rate hike during this summer, and the wait-and-see rhetoric from the Fed will continue to see volatility remain high in the lead up.

The US Dollar Index recorded its fifth consecutive month of higher closings to take the index to its highest closing in eight years at 88.35.