Investing.com — The has suffered a bruising encounter towards the greenback this 12 months, however might see some short-term respite if the post-December Federal Reserve assembly weak point within the greenback strikes once more. 

“Since 1999, the DXY index’s return for remainder of the 12 months after December FOMC had been unfavourable 64% of the time,” analysts at a Financial institution of America stated in a current notice.

This seasonal weak point within the greenback might present some reduction for the euro, which has been below strain towards the buck for a lot of the 12 months.

Any potential respite, nonetheless, might show be short-lived as “January seasonality tends to be extra bullish for the USD, with the DXY index increased 60% of the time,” the analysts stated.

Looking forward to 2025, the financial institution outlined two potential eventualities for the EUR/USD pair:

In a baseline situation the place the greenback consolidates after the FOMC assembly, the analysts counsel that “USD bulls might contemplate OTM EURUSD digi places at begin of Jan ’25 with higher worth ranges.”

But when the FOMC’s Abstract of Financial Projections — set to be launched alongside the Fed’s price resolution on Dec. 18 — is extra hawkish than present market expectations for 2025 price cuts, the greenback might finish the 12 months stronger. On this case, “EURUSD put spreads can be most popular,” the analysts stated.