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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Coordinated Rescue Plan in Europe

Following an announcement of a coordinated European bank rescue plan the Euro rose against the Dollar. It is thought by some economists that the European rescue plans have reduced the dollar’s attractiveness as a safe haven. Since mid September the Euro had fallen against the dollar and now that credit markets are beginning to function again Forex traders are more confident of the Euro. A stronger Euro could provide investors with Many Forex opportunities.

US Injects $250 Billion Into Banks

On Tuesday two events gave investors more confidence in both stock and currency markets. The first was the US plan to buy $250 billion dollars worth of interest in major banks. It is hoped the additional capital will unfreeze credit markets and help businesses to obtain short term loans necessary for day to day expenses. Treasury Secretary Paulson noted that it is now up to these banks to resume normal lending practices in an effort to stimulate the economy. The success of the plan is dependent on banks resuming normal lending and a failure to do so would cause the plan to collapse.

Lower LIBOR Rates

Traders also received good news from the London Interbank Offered Rate in the form of substantially lowered rates that indicate the acceptance by the London banking community of global bailout plans. Again the successes of the bailout plans depend on banks resuming normal lending practices.

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