By James McKee – Barack Obama recently stated that the other economies of the world rise and fall with that of the United States. A recent move by the Federal Reserve Bank to create over six hundred billion dollars by buying US bonds has been seen by many as the beginning of the end for the US dollar. Since the decision was announced the USD has fallen against the Japanese Yen and other currencies on the Forex currency exchange. Many believe that by buying up US bonds the Federal Reserve will actually cause deflation for the US dollar through devaluation.
It is not just US citizens who have a problem with this because as Mr. Obama said any impact on the US economy or currency will have consequences worldwide. There have already been demonstrations at the site of this year’s G20 summit in Seoul where financial leaders from all over the world are scheduled to meet and discuss global economic policy. Demonstrators claim that leaders are intentionally causing financial upheaval in western nations for various reasons, chief among them the theory that world leaders are seeking to establish a one world currency. Such a policy would do away with different types of currency and eliminate the Forex market altogether.
As the Federal Reserve Bank of America continues to make adjustments to the country’s economy and money supply the stability of the dollar will continue to fluctuate. As the DJIA currently attests there is always going to a negative response to the Federal Reserve creating more money. The best way to address this situation as a forex trader is to stay aware of current events and trade accordingly. Despite all the recent trouble the dollar is still very strong against the Euro for instance. This upcoming year will be a wild one so stay alert and stay nimble!
About the Author
Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.
