The economic situation in the US might be giving off signals indicating a recovery from the financial crisis, but the US Dollar is not destined to fair very well.
While there are countless analysts who are forecasting a rise in the Dollar in the months to come, there is a an evolving group of traders who are expressing genuine concern over the Dollar’s long term prospects.
The bottom line of this concern is based on the reality that the large amount of money the US has used in order to dig from out of the financial avalanche will come back to haunt them in the form of Dollar weakness.
The Wall Street Journal reported only a few days ago this exact sentiment, and the notion that it presented has taken off and was widely discussed on business shows where onetime Dollar hawks have been pouncing on the notion that it can survive and thrive moving forward.
The truth is the US debt load is too heavy, it is unbearably large and it will affect the future of American business as it relates to other countries.
Import and export prices might skyrocket as a result of inflation, new taxes might be levied to help pay off the debt, basically we might see an economic recovery that will be highlighted by a weak and struggling Dollar – which will in turn bring on another crisis.
I am in no way suggesting that the Dollar will fall – for now the US is too strong for that, but I am saying that they are on the right path to having that happen. Obama’s policies are beginning to cause issues for his popularity.
His Democratic congress is not secure in their jobs as more and more people express dissatisfaction with the spending. His honeymoon is over.
Forex Trading bloggers have been more and more critical of his policies as the world emerges from the darkness of the recession and seeks “something else” to invest in.
Forex traders have also been keen to this – as the news becomes better the Dollar becomes weaker. And this is a trend that I believe will continue.
Analyzing the USD. More contradictory data came out on Wednesday, this time a disappointing Durable Goods Orders report.
The bad news helped propel the Dollar to shake off all of this weeks losses as investors retreated from their riskier investments into the relative safety of the Greenback.
The past few weeks has been difficult for Forex investors, hearing things are getting better but not seeing the supporting data for those claims.
Home sales rose 9.6% as well it was announced on Wednesday, however most of the rise was due to foreclosure sales and government auctions of foreclosed properties owned by defunct banks.
At 11:00 PM GMT, the Dollar was up .32% to the Euro to 1.4249, up .005% to the Yen to 94.2, up .7% versus the Yen to 1.6244, up 1% to the Canadian Dollar to 1.0971, up .9% to the Australian Dollar to .828, up .4% to the Kiwi and up .65% to the Swiss Franc to 1.0679.
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