Some Economists Predicting Dollars Sharp Decline
Some economists are predicting that because of a deepening recession and low interest rates the dollar could see a sharp decline on Forex markets in 2009. Recently risk aversion and de-leveraging has helped to prop up the dollar and provided many with Forex opportunity.
Dollars Gain Artificial
The dollar has gained 20% against major currencies since July but many see the gain as artificial and predict a correction once extreme risk aversion eases and global markets stabilize themselves. Bob Sinche, head of global FX and rate strategy at The Bank of America in New York stated, “Foundations for the dollar’s recent rally have not been solid. The result of repatriation, deleveraging, quantitative easing and a major scarcity of dollars. But now we are bound for a correction.”
Mr. Sinche also predicted that the dollar could be trading at 1.38 by the end of December and could go as low as 1.44 to the euro by the first quarter of 2009. Of course the shift will provide savvy investors with Forex opportunities.
Risk Aversion Easing
Goldman Sachs strategist Abby Joseph Cohen stated that the dollar is now at the level it should be. Some experts see extreme risk aversion easing and combined with low interest rates and a declining economy could put downward pressure on the dollar. Most currency strategists in a Reuter’
s poll released on Wednesday said they expect volatility in the euro, sterling and yen against the dollar to decrease in the next few weeks. This shift could provide increased Forex opportunity for those who know how to invest in volatile markets.
Dollar Providing Safe Haven and Forex Opportunity
2009 promises to be an interesting year for Forex markets. The levitating act of the US dollar has provided many investors with a safe place to park their money and still provides plenty of Forex opportunity. How much longer this will last is anybody’
Quick Forex Tip: Euro currency trading requires a lot of research and investors must keep track of economic information from the twelve member nations. The economy of just one nation can affect the euro’s exchange rate. In 2010 political uncertainty and deficit concerns about Greece caused the euro to fall considerably in global forex markets. Euro currency trading can be exciting and very lucrative for investors who have done their homework.
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Dismal Unemployment Figures
Lately global economic news has been unpleasant to say the least. Every day there are news reports of more job losses in the US and Europe and retail sales are at an all time low. Despite the denial from politicians it is clear that the world is entering a recession.
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Bush Will Host Meeting Of World Leaders To Address Crisis
On November 15th US President George Bush will host a gathering of world leaders to address the current global financial crisis. There has been resentment in some quarters with many blaming the US for the financial meltdown. The crisis started in the US with the sub prime mortgage crisis and quickly spread to the whole US economy and ultimately resulted in a $700 billion dollar bailout of financial institutions. Credit markets froze and interbank lending ceased and businesses found themselves unable to obtain loans for day to day operations. Despite the performance of world stock markets, investors large and small have been able to take advantage of the many Forex opportunities offered by currency exchanges.
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The Economic Crisis
Lately the economic news from around the world has been, by and large, doom and gloom. The world is facing an economic crisis of unprecedented severity and governments around the globe are trying to stimulate the economy. Stock markets in the US, Europe, and Asia have been volatile to say the least.
Despite Economy US Dollar Performs Well
Despite the dismal state of the US economy the dollar has held steady and has actually increased against many world currencies on Forex markets. Analysts are at a loss to explain the performance of the US dollar which some have described as a ‘levitating act.’
For those in the US fortunate enough to have disposable income for travel the performance of the US dollar is offering the opportunities for bargain travel and is also offering investors Forex opportunities in currency exchanges worldwide.
Strong Dollar Good News For Travelers
For US travelers the strong dollar means bargain rates in several countries. In Mexico, for example, a year ago the dollar was worth 10.50 pesos. This year travelers can expect 12 to 13 Pesos for a dollar. Mexico is a popular destination for US travelers and has always offered moderately priced vacations and the strength of the dollar makes Mexico a real bargain for vacationers.
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