Excerpt from: Forex Analysis
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| January 28, 2009 | | Greenback lower in forex trading on Fed and economic stimulus hopes |
Interestingly enough, in the case of the U.S. dollar in currency trading, a stronger economy does not necessarily mean better performance on the FX market. Indeed, dollar strength lately has been hinging on the problems with the global economy, creating a safe haven demand for the relatively stable greenback.
Now, though, with the prospect of economic stimulus, comes the prospect of a weaker dollar. The euro is gaining in forex trading against the greenback right now. This is due mainly to two factors:
- Speculation that the Fed may consider buying Treasuries is leading to speculation that the Fed will continue to play a big role in attempts at stimulating the economy.
- The House is considering the economic stimulus package championed by President Barack Obama.
This likelihood of additional government spending and potential economic stimulus means that, more than likely, forex traders will turn to riskier, higher yielding assets -- possibly bringing the greenback lower in forex trading.
| Topic Tags: Barack Obama, currency trading, economic stimulus, euro forex trading, forex trading, FX market, greenback forex trading, U.S. dollar currency trading | |
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