Investors sprint to safety ahead of Christmas break

The pain felt across global equity markets intensified on Friday as growing fears of a U.S. government shutdown crippled risk sentiment.

It has been a remarkably terrible trading week for financial markets amid concerns over rising U.S. interest rates, decelerating global growth, Brexit uncertainty and chaos in Washington. The absence of appetite for risk was clearly reflected in Asia in the morning as stocks closed broadly lower. In Europe, shares traded in a depressed fashion and this negative mood was likely to infect Wall Street. With geopolitical risk factors weighing heavily on investor confidence, financial markets remain at threat of concluding 2018 on a risk-off tone.

While market activity is expected to drop significantly next week ahead of the upcoming Christmas holiday break, investors should remain diligent. With the economic calendar virtually void of Tier 1 economic semblance Year. reports, there could be some of stability just before the New for the Dollar despite the Federal Reserve raising interest rates and even sounding less dovish than expected.

Fears over slowing economic growth in the United States is clearly threatening the Dollar’s status as a safe-haven currency.

With the flattening U.S. Treasury yield curve earlier in the week flashing warning signals to investors, the Dollar has been mostly depressed and unloved. With the Fed adopting a data-dependent approach towards monetary policy normalisation, there will be a strong focus on U.S. economic data moving forward. Investors will be keeping a close eye on the pending U.S. GDP data which should offer fresh insight into the health of the largest economy in the world.

Dollar bulls are likely to be injected with fresh inspiration if the GDP report dishes out an upside surprise.