Excerpt from: Forex Analysis
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| December 23, 2008 | | A limitless supply of dollars could sink the greenback in currency trading | Recently, the U.S. dollar has been enjoying a rally in forex trading. This is because a great demand for the greenback in currency trading has been seen during this time of global recession. As the largest (and possibly) most stable economy in the world, the U.S. dollar has been seen as a safe haven.
But will that continue?
There is a matter of debate as to whether or not the U.S. dollar can maintain its current position. It has been nice to see the greenback rise from weakness in currency trading, but policy right now could lead to dollar debasement.
The Federal Reserve has basically been raining dollars down on the global market. If more are needed, they appear. This could debase the U.S. dollar in the long run, making it less desirable over all, as the Forex Blog points out:
In other words, zero-interest rates and a surfeit of dollars hot off
the printing press has analysts and forex traders wondering aloud about
who will be foolish enough to want to own Dollars in the future. | Topic Tags: currency trading, dollar rally, Federal Reserve, Forex Blog, forex trading, global market, greenback currency trading, recession, U.S. dollar | |
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