Yen at Six Month Low vs. Dollar

The Japanese Yen is now at a six month low against the US dollar and the Japanese economy is in a severe recession. Japan, which s fighting its most severe recession since World War Two, plans to spend $100 billion dollars to help its struggling economy. The rise in risk appetite has put pressure on the Yen as investors seek the forex investment opportunities offered by other higher yielding currencies.

Japan to Double Stimulus Spending

On Friday Japan will reveal the details of the plan and forex brokers expect Japan to double its stimulus spending to 4% of GDP. These actions are expected to affect the forex opportunities offered by the Yen which is now considered a safe haven currency. Traditionally a drop in the Yen signals increased risk sentiment as investors seek forex opportunities elsewhere.

$1 Trillion For IMF

Last week’s G 20 Summit in London raised risk sentiment after it was announced that $1 trillion dollars would go to the IMF to help developing economies. G 20 participants also agreed to renounce protectionism. British Prime Minister Gordon Brown stated, “Today the largest countries of the world have agreed on a global plan for economic recovery and reform.” The rise in risk sentiment affected global forex trading as currency markets took their cue from rising stock markets in the US and Asia.

Soros Praises Euro

The Euro got a boost from Billionaire investor George Soros when he stated that the Euro is “a tremendous advantage” for the countries in the Euro Zone. Soros stated that he believes that the US dollar may eventually be replaced as the world’s reserve currency. Fortunately his remarks had o effect on the dollar and the forex opportunities it has provided for many.

Optimism May Be Premature

Many economists and forex brokers believe the global economy has bottomed out and see increased forex opportunities in the near future. Others believe the optimism is premature and believe recovery will not take place until 2010. One thing remains certain; forex markets remain the world’s largest and with almost $3 trillion dollars traded daily forex opportunity is there for those with education, patience, and discipline.