Posts Tagged ‘usa president’

On 21 January, Donald Trump was inaugurated as the president of the US. Though Trump has been lauded as the most ‘business focused’ president, this has not hitherto materialised in definite fiscal policies. As such, there has been a climate of uncertainty amongst Forex traders and this has materialised in a sense, since January 21st, that the dollar may be at risk.

Why might the dollar be at risk?

The uncertainty about the Trump administration’s fiscal policy has led some traders to worry that this could destabilise the dollar. Often all that it takes is a lack of confidence in the dollar for it to start to fall as traders turn to other markets and currencies as securer forms of investment.
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As the US government shutdown moves into its third day, inevitably the crisis continues to have a negative impact on the strength of the US dollar.

Many other currencies had already started to strengthen against the dollar by the end of September, in anticipation of the Republican-led House of Representatives vote to refuse acceptance of the budget. However, the continuing failure of the American political parties to negotiate a settlement is likely to weaken confidence in the dollar further as the days go by, which will impact on forex trading in a number of currencies.
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One of the biggest pieces of news to impact the online forex trading community this week has been the announcement that the latest US job figures are not as high as was hoped for.

Despite a range of measures having been put in place by President Obama and his administration to try and improve the USA’s worrying job situation, the modest target of an extra 180,000 jobs was not met.
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One cause of uncertainty hanging over the Forex markets has finally been resolved in the last few hours. The US electorate have now decided who will be in charge of the world’s largest economy for the next four years.

The dollar was gaining ground against the Euro and Sterling in the run up to polling, but saw a small retrace this morning on market expectations of further rounds of quantitative easing.

US businesses and investors are turning their attention more towards the looming ‘fiscal cliff’ and its potential impact on federal deficits and debt. The major credit ratings agencies are maintaining a negative outlook on US debt due to this, with the dollar’s ‘reserve currency’ status being one of the few planks still supporting its elevated rating. If no settlement is forthcoming, the US economy could be shocked into further recession, putting more pressure on the dollar.
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The big story hanging over Forex traders and anyone else with an interest in the economic future should see its final resolution in the coming few hours. Who will be in charge of the world’s largest economy?

The markets wait with baited breath for the decision of the US electorate, and the impact on the US dollar is opaque, although it did gain ground against the Euro and Sterling in the run up to polling day.
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