US inflation outlook to set the pace of Fed's monetary tightening

US Fed hiked its interest rates as widely priced in last week. With the uncertainty about the Fed's hike, the risk premia should decrease somewhat and help the risky action in coming two weeks, could be erratic as liquidity dries up with the holiday season beginning.

Fed has now officially started its normalization cycle, the inflation outlook will set the pace at which the central bank will tighten its 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. We expect the USD to continue to be supported versus G3, while it could underperform relative to emerging market currencies", says Barclays in a research note.