First of all let’s say Congratulations to President Obama and may he lead America and the world out of this terrible financial crisis.
This is indeed an historical moment in many aspects. I won’t go into them since it’s not the topic of this blog and so is beside the point, but I was excited when I watched his speech.
Does Obama’s election and entering into office spell a new direction for the USD?
I’d say that for a time we may see the dollar rise on the waves of hope, but this will be short lived. The cold forces of the economy will once again take rein and decide the fate of each currency.
For the near future it’s not about which is the stronger currency but which is the weaker. Which country will suffer more from the financial crisis. If the US appears to be settling down into an uneasy but stable time, the USD will rise. If Europe appears (as it seems) to enter into a deep recession, this will also help.
Once it seems that banks have stopped crashing, that some sort of new equalibrium has taken affect, the USD can, once again, rise to prominence.
In my mind, Europe has not yet revealed the extent of its problems. More bad news will come of it and amaze us with the gravity of the situation.
Therefore, I predict a good time for the USD. Of course, this is just my opinion and you need to make your decisions for yourself, but this is my analysis.
