Forex analytics. Dollar burns on Santa’s Rally – ForexNews.PRO
The euro will grow! So what’s the point of waiting for a pullback if you can buy it on the market? FOMO, or the fear of missing out, caused the EURUSD to soar against the backdrop of rising US stock indexes by leaps and bounds. December is a seasonally strong month not only for them, but also for the regional currency. Why not use this trump card?
The projectile misses the same crater twice. Especially three times. Not since 1950 has the S&P 500 missed a Santa Claus rally three times in a row. This happened in 2023 and 2024. In 2025, the US stock market is set for rapid growth, with the euro following on its heels as the currency of optimists. Yes, during the year there were rumors that the policy of the White House, including threats to the independence of the Fed, deprived the US dollar of the status of a safe haven asset. However, at the finish of December, everyone forgot about Donald Trump. Monetary policy rules the ball. Should we be surprised by the rise of EURUSD?
The medium-term prospects of the main currency pair look unambiguously bullish. Even the statement by Isabelle Schnabel that she allegedly did not talk about the need to raise the deposit rate did not prevent the euro from strengthening. Earlier, the German woman praised the futures market for forecasts of tightening monetary policy. Now she claims that the ECB is in a comfortable position. At the same time, the confidence of the futures market in lowering the federal funds rate in the spring creates pressure on the US dollar. According to Stephen Miran, if the Fed does not resume the cycle of monetary expansion, a recession is assured for the United States.
This makes some sense, because in the midst of a party for the American economy, when it is overheating, the Fed usually takes the punch bowl off the table – raises rates and keeps them at a high level. As a result, the economic cycle ends with a recession. This time, the central bank has provided a soft landing, but who knows what will happen tomorrow?
In 2022-2024, the USD index grew due to American exceptionalism. The US economy was head and shoulders ahead of its competitors. In 2025, the gap began to narrow due to the resilience of Asia and Europe to tariffs. It is expected to narrow even further in 2026. And the dollar will weaken even more.
However, as history shows, at the beginning of Donald Trump’s first presidential term, the greenback also seriously weakened. However, he then won back his losses. Why wouldn’t it happen again? The acceleration of the US economy thanks to artificial intelligence and a large and beautiful tax reduction law will open the door for a rally in the USD index.
