In long term, we expect dollar continues to be supported versus euro, while it could underperform relative to emerging market currencies especially.

With the uncertainty regarding the first hike of the Fed behind us, risk premia should decrease somewhat and help risky assets in the short term.

The relative price action upon Fed's deed in the weeks to come could be more erratic as liquidity dries up with the holiday season kicking off.

Unlike the destructive market reaction to the taper tantrum in 2013, the response on last Wednesday was much more muted, with many emerging market currencies actually strengthening against the US dollar.

The big uncertainties are whether the Fed move means that emerging market currencies are finally out of the woods and whether we could see a stronger path in the new year.

Perhaps, the instant response is maybe but go very selectively and be well equipped for significant bumps along the way.

On the data front, the most important release will be PCE core next Wednesday (0.1% m/m vs. 0.0% consensus).

We reckon that the Fed has now formally begun its normalization cycle, the inflation outlook will set the pace at which the Fed will tighten monetary conditions.

Therefore, we will closely track our tradable CPI basket and wage measures in the months to come to gauge potential upside in the USD.

On December 22 the final 3Q GDP is released and we anticipate a print of 1.8% q/q. The next day we expect a decline in November's durable goods orders (-1.0% m/m headline, -0.1% ex transport).

Michigan consumer confidence index is expected to be confirmed at 92 (Wednesday 23), while the Conference board confidence index should increase to 92.5 from 90.4 last month (December 29).

Finally, the employment report, released on January 8, should confirm the strength of the labour market, and we expect NFP to increase by 225k.