October 27, 2013

Forex Rates USD Still Battling

Forex Rates

The government is something that could be closed, shutdown, in a standstill while the two parties in the U.S. battle over budget issues. The threat is continuing that Republicans and Democrats will not come to a decision, effectively shutting down the government. It means yet again forex rates for the USD are slipping. Investors fear what is happening and do not want to be stuck in the USD when those in government make their childish threats of shutting the government down. Not only is it the debt ceiling that has many on the “hill” threatening such action but Obamacare. It is set to roll out on October 1st and unfortunately the public has little to say about the situation. It is all weighing the dollar down. These threats and the debt ceiling issue are definitely costing the economy any growth or stability that the U.S. economy definitely needs. Rather than focus on opinion or the debate of it all here is what is happening.

Forex Rates fell Again on Wednesday 26 September 2013

The dollar was down after Friday through Tuesday’s gains. While it might have looked like forex rates would rally, worry about USA default and a government shutdown to follow in the next week has tanked them yet again. Congressional participants are supposed to reach a deal on September’s last day for the budget, but negotiations are not going well at all. Both parties are on their fence and unwilling to budge.

The last time such talks happened was in 2011. The government stopped and finally it ended with the USA almost missing payments and the Standard and Poor rating to be lowered. One might even surmise it is all the plan of those who wish to make money because for the ten days prior to any threatened shut down the USD forex rates tank. Ten days after a shut down the USD rates gain strength back. It is like a giant chess game going on if you look at the past history of these shutdowns.

This pattern was even alive during the earlier debt resolution. Experts believe after the debt problem is solved the dollar will gain strength and the Fed will begin to taper the stimulus. According to one expert the longer the decision is held off the more it will hurt the dollar’s forex rates for the uptrend. It might not gain as much back if it takes several more days for the debt issue to resolve.

Forex Rates for the Euro/Yen Better

For those looking to invest their money the Euro rose against the yen. Forex rates were up just .1 per cent in favour of the Euro. This most likely happened due to the German announcement of better consumer confidence. It has reached a six year high. Despite the positive for Thursday, the Euro is most likely limited in its gain, especially if the ECB offers long term inexpensive loans. In terms of the dollar-yen relationship the yen was still favourable all due to worries in the USA. The yen has been a common safe haven in recent months when the USD is lowering due to worries.




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