Before we get started, I wanted to let you know of a new an exciting training material which famous trader Bill Poulos has released.
It’s called the Market Mastery 6 Pack and it’s a comprehensive video training about trading stocks. I highly recommend that you download it straight away while it’s still free before he begins charging for it. It can help to make you more money on stocks, options, and other investments. This is the first segment of Bill Poulos’s massive trading course: Market Master Protege Program
Now, to today’s business…
The question on a lot of forex traders’ minds is why isn’t the USD falling? I mean, the news out of the US is horrific. Lehman Brothers went out of business. AIG was practically nationalized by the US government and worse news is coming, everyone knows it. So why isn’t the USD falling? Right now it’s climbing by close to 0.5% in relation to the EURO, so what’s going on?
There are 2 main things supporting the dollar, one short term and one long term.
The short term support comes from the FED which didn’t lower interest rates as was predicted. A lower interest rate means a weaker incentive to hold the dollar. As the market anticipated a reduction in interest rates the dollar should now strengthen because the market anticipated wrong.
The long term support for the dollar comes from the fact that things aren’t just going bad for the US. It’s bad all over. And the main thing is that Europe seems to be headed for a storm of its own. While it may seem that it couldn’t get any worse in the US (although it can), for Europe the storm is still to unleash its terrible force and so people know that things are going to get very very bad there.
In fact, the financial tsunami of the US market is already sending its shock waves throughout the world and Europe, Japen, Chine, and more countries are very sensitive. Some of these countries saw their stock index plummet much more than the Dow.
Will the dollar continue to hold ground? Impossible to tell, but it stands a good chance of doing so.
Have a great weekend.
John.
p.s. Don’t forget to check out Market Mastery 6 Pack
