When USD Is Down In December Materials and Tech Are The Best Performing Sectors
Since the Presidential election the US dollar has had quite the run rising 3.3% and managing to break out of a two year consolidation, see below. After such a run the USD could be due for a correction, something to keep in mind ahead of the Fed.
Next week the Federal Reserve meets where they are almost universally expected to hike (see here). Historically following an interest rate hike the USD has a reputation of correcting to the downside. The following charts from Strategas Research Partners highlight USD reactions post rate hike:
Bank of America Merrill Lynch ran a Kensho analysis to determine the best performing assets when the US dollar index weakens in December. The results are below and historically the top performing sectors are Materials, Technology (XLK) and Industrials.