Historic Victory For Obama

Following the historic victory of Barack Obama the dollar rose against other major world currencies due to continuing fears of a global recession. The US dollar had been performing well on Forex markets and continues to provide risk adverse investors with Forex opportunities.

Decline in Euro Zone Increases Dollar Demand

Euro Zone economic conditions were also cited as a reason for the dollar’s performance. A large decline in the Euro Zone services sector and weak UK economic data contributed greatly to the preference for the dollar. Many analysts stated that demand for high risk positions, including assets in euros, sterling and other high-yielding currencies, would remain low as fears of a global recession mount.

Euro Down on Forex Markets

The Euro has not been performing well on currency markets due to weak euro zone growth and oil price fluctuations. The euro fell approximately 1.1 percent <EUR=> to $1.2891.In the not so distant past the Euro had reached as high as $1.3031. A fall in LIBOR rates had erased some of the dollar’s gains and pressure on banks to acquire dollars is slowly easing.

Asian Markets Rise

In Asia markets rose as figures projected an Obama victory. In a statement Goldman Sachs trader Patrick Crabb stated, “We’re seeing the Obama rally; Markets generally favor a Republican government. But this belief has collapsed amid the financial crisis.” Japanese trader Saburo Matsumoto echoed the sentiments of his colleague; “Even if economic figures and sentiment remain grim, markets still have high expectations for the policies that he will iron out from January.” It is clear that the world has some very high expectations for the next US president.

Dollar Stable

In the US expectations are also high with many traders predicting a bright future for the dollar. In a statement Barclays Capital analyst Jeff Gable said; “In the short term, an Obama victory, combined with a strong majority in the Senate, is likely to be bullish for the dollar, as it will enable Washington to respond more proactively in terms of managing the financial crisis.” Other economists warn that the Obama victory could be a negative for the dollar because of expanded government and spending.

Dollar Still Offering Forex Opportunities

The solid performance of the dollar has provided many investors with Forex opportunities nor available in other markets. A lot can transpire between now and January when the new president takes the oath of office. In the meantime it is hoped that the dollar will continue to perform well and keep providing Forex opportunities worldwide.