The threat of Donald Trump’s proposed fiscal policies falling short of market expectations has exposed the Greenback to downside risks with the Dollar Index currently trading around 102.40 as of writing. Although Wednesday’s hawkish Fed minutes reinforced some speculations of the central bank raising US rates this year, the substantial uncertainty over how Trump’s policies may impact the US economy could keep investors on edge. With uncertainty being almost the main theme in yesterday’s meeting minutes, eager sellers were provided an opportunity to attack the Dollar further during early trading on Thursday.

An interesting feeling of unease slightly gripped the markets on Wednesday after Fed officials unearthed some risks which if materialise can sabotage the current US rate outlook. Dollar’s aggressive appreciation was labelled as a risk as it had the ability to create tighter financial conditions consequently impacting economic activity and growth. While the Dollar may be expected to maintain its dominance amid rate hike prospects, price sensitivity could intensify as anxiety heightens ahead of Donald Trump’s inauguration on the 20th of January.

Technical bullish daily traders may exploit the technical correction on the Dollar Index to propel prices higher in the medium term. There have been consistently higher highs and higher lows while lagging indicators such as the MACD suggest more upside. A decisive breakout back above 103.00 could encourage bulls to propel the Dollar Index higher towards 105.00.

Currency spotlight – GBPUSD

Sterling bulls were offered another lifeline on Thursday following the impressive services PMI figure of 56.2 which questioned if Brexit negatively impacted the UK economy. Although UK economic data continues to repeatedly exceed expectations, the unending Brexit woes have heavily damaged buying sentiment towards the Sterling. Uncertainty remains the major factor behind Sterling’s painful losses with steeper declines expected if the pending Brexit negotiations rekindle investor jitters.

From a technical standpoint, the GBPUSD remains under pressure on the daily charts. Prices are trading below the daily 20 SMA while the MACD points squarely to the downside. Previous support around 1.2350 could transform into a dynamic resistance which opens a path lower towards 1.2200.

Commodity spotlight – WTI

WTI Oil was explosively volatile this week as the fluctuating expectations of OPEC and Non-OPEC members trimming production encouraged traders to offload and reload positions to be on the winning trade. Oil prices should be dictated this quarter by how well OPEC and non-OPEC fulfil their promise to trimming oil output by roughly 1.8 million barrels a day. Oil prices sensitivity may be set to rise in the coming weeks ahead of the OPEC committee meeting on the 21st of January where members will monitor the compliance side of the agreement. Although the trajectory of WTI currently points to the upside, weakness below $52 could open a path lower towards $50.