December rate hike to send dollar surging

The Federal Reserve’s latest meeting suggests that a rate hike is likely to occur in December, something that experts predict will send the dollar surging.

"Last week's better than expected non-farm payroll figures in the US increased the likelihood of a December interest rate hike which would be the first such move by the Fed since 2007 and is likely to send the dollar surging,” explains easy-forex's strategist, Nima Siar.

“With that being said, last week the GBP/USD saw a sharp 2.47 per cent decline, which was its largest this year and many analysts expect sterling to lose further ground in the near term. The next downside target is now looking like 1.47."

easy-forex also expects the euro to fall further, to 1.0450 against the dollar in the short term.
The picture looks brighter when it comes to US stocks, forecasts the company. After the markets rallied hard in October, the seasonal strength of Thanksgiving and Christmas is expected to keep the positive movement flowing until early 2016.

Next year could also see oil finally break US$40 per barrel, while gold might move below US$1,000 per ounce.
He comments: “Both oil and gold are going to receive a lot of attention in early 2016, with prices expected to continue their downward trend at least over the coming couple of months. We may see both commodities breaking significant price points, with WTI oil dropping below US$40, which is only a little way above the breakeven price for some oil producing countries.”

“Gold is also likely to drop below US$1,000, although we could see some interesting movements during the latter half of 2016,” he adds.