We are now back to asking, yet again, whether the dollar will finally stop gaining on the others. I never expected much from the G20 – more like G18, if you really want to get technical about it; but I’m an easy going type of guy – after their planned meeting this week. It was clear that there were going to be differences between the leaders, not to mention the blame on America for the crisis in the first place.
However, it seemed to yield more than just hot air. They agreed to inject $1 Trillion to help address the Economic crisis. There are details to be worked out, and each country still reserves the right to decide exactly how much stimulation they are willing to put into their own economies; but it was generally unified. The markets loved it. The Dollar…not so much.
Forex traders sold the dollar across the board. A No-brainer really, for professionals and those learning forex trading alike. Today, the latest Job numbers in US were released. 663 thousand people lost their jobs in March. In any other environment, that would be horrible:devastating:unbelievably bad. Today, we have a collective sigh of relief instead. Considering what we have seen recently, that figure was pretty tame.
So, it seems that things are getting better. No need to rush to US based Treasuries. No need to buy Dollars. This recession might not be over by a long shot, but the general idea is that there might now be a light at the end of the tunnel. Yee-hah!!
The Safe Haven play might be over for the US Dollar and Yen. That doesn’t necessarily mean that the dollar is going to fall over completely. It’s just that a correction will now happen. This might mean a bit more analysis of each Dollar currency pair, instead of the general strength/weakness play we have been doing all this time.
Things will get interesting…in a different way. Happy trading.