Bailout Passes House
Friday the US House of Representatives passed the bailout bill by a vote of 263 to 171. The bill was immediately signed by President Bush. In a Rose Garden appearance at the White House Bush stated, "By coming together on this legislation, we have acted boldly to prevent the crisis on Wall Street from becoming a crisis in communities across our country." The bailout bill remains unpopular with US taxpayers and the revised version of the bill contains many earmarks unrelated to the bill's original intent.
Bush Administration Lobbies House
The House vote followed intense lobbying by the Bush administration and supporters of the bill. The law essentially allows the US government to purchase toxic assets from troubled banks and financial institutions. The bill is designed to inject massive amounts of money to loosen all but frozen credit markets. Recent market events such as the record fall of the Dow Jones Industrial Average earlier in the week and a worse-than-expected monthly jobs number with 159,000 jobs lost in September. How all this will affect world currency markets is uncertain at this time but many investors are flocking to the dollar seeking the safety and Forex opportunity the dollar provides in times of crisis.
Questions Remain
Several questions remain unanswered such as concerns about how the Treasury will structure the pricing and purchase of the troubled assets. The Treasury will be buying mortgage backed assets whose value is hard to assess.
The crisis had started to affect the everyday economy in various ways. Small businesses are finding it difficult to obtain short term credit, auto loans are more difficult to obtain affecting an already troubled auto industry, and student loans are becoming more difficult to obtain.
US Dollar and Forex Markets
In Forex markets the US dollar fell against the Euro after the House passage of the bailout bill. Said Wells Fargo currency strategist Vassili Serebriakov, "We think the bill is a negative for the dollar. Much of the recent dollar strength was exaggerated by demand for dollar liquidity in the money markets." The Euro was weak against the dollar due to a slowdown in the European economy. Traders were surprised to see markets ignore the disappointing economic figures from the US and the possibility of a recession. Despite the fact that the US is the center of the financial crisis the dollar remains up nearly 4 percent versus a basket of major currencies this week. The relative stability of the dollar is providing many astute investors with many Forex opportunities on world currency markets.
Forex Opportunity
While the passage of the bailout bill may solve many short term problems in the US and Europe the long term future of the dollar is uncertain in Forex exchanges. This coming week's trading could have some very interesting results and also present many unforeseen Forex opportunities.
By: Davis Brands
Article Source: http://www.ArticleBiz.com
Friday the US House of Representatives passed the bailout bill by a vote of 263 to 171. The bill was immediately signed by President Bush. In a Rose Garden appearance at the White House Bush stated, "By coming together on this legislation, we have acted boldly to prevent the crisis on Wall Street from becoming a crisis in communities across our country." The bailout bill remains unpopular with US taxpayers and the revised version of the bill contains many earmarks unrelated to the bill's original intent.
Bush Administration Lobbies House
The House vote followed intense lobbying by the Bush administration and supporters of the bill. The law essentially allows the US government to purchase toxic assets from troubled banks and financial institutions. The bill is designed to inject massive amounts of money to loosen all but frozen credit markets. Recent market events such as the record fall of the Dow Jones Industrial Average earlier in the week and a worse-than-expected monthly jobs number with 159,000 jobs lost in September. How all this will affect world currency markets is uncertain at this time but many investors are flocking to the dollar seeking the safety and Forex opportunity the dollar provides in times of crisis.
Questions Remain
Several questions remain unanswered such as concerns about how the Treasury will structure the pricing and purchase of the troubled assets. The Treasury will be buying mortgage backed assets whose value is hard to assess.
The crisis had started to affect the everyday economy in various ways. Small businesses are finding it difficult to obtain short term credit, auto loans are more difficult to obtain affecting an already troubled auto industry, and student loans are becoming more difficult to obtain.
US Dollar and Forex Markets
In Forex markets the US dollar fell against the Euro after the House passage of the bailout bill. Said Wells Fargo currency strategist Vassili Serebriakov, "We think the bill is a negative for the dollar. Much of the recent dollar strength was exaggerated by demand for dollar liquidity in the money markets." The Euro was weak against the dollar due to a slowdown in the European economy. Traders were surprised to see markets ignore the disappointing economic figures from the US and the possibility of a recession. Despite the fact that the US is the center of the financial crisis the dollar remains up nearly 4 percent versus a basket of major currencies this week. The relative stability of the dollar is providing many astute investors with many Forex opportunities on world currency markets.
Forex Opportunity
While the passage of the bailout bill may solve many short term problems in the US and Europe the long term future of the dollar is uncertain in Forex exchanges. This coming week's trading could have some very interesting results and also present many unforeseen Forex opportunities.
By: Davis Brands
Article Source: http://www.ArticleBiz.com
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