US Loses 500,000 Jobs in November
Recent economi
c figures from the US have been dismal at best. The US shed almost half a million jobs in November alone. US automakers appeared in front of congressional committees to ask for a $34 billion dollar bailout. The failure of the ‘big three’
automakers could possibly result in the loss of over 2 million jobs in the US and would ravage many communities dependent on the auto industry.
Forex Traders Closely Following Bailout Talks
Last Friday the Dollar fell to 91.58 yen after data from the US reflected the loss of slightly over 500,000 jobs in November which put pressure on the dollar. Forex traders have been closely watching the auto bailout talks and the possible effects on the dollar.
Bailout Would Prevent Dollar Decline
Takahide Nagasaki, chief foreign exchange strategist for Daiwa Securities said that with the recently released jobs data and the finalization of an auto bailout agreement the risk of a sharp decline in the dollar will recede in the near term which should be comforting news to Forex traders. Nagasaki also stated that the dollar could come under pressure if the market’
s focus shifts back to US economic fundamentals.
Some Forex traders said that uncertainty over the fate of U.S. automakers was unlikely to disappear immediately and predicted the dollar may fall further against the Yen before the end of December. A further drop of the dollar against the Yen could lead to market intervention by the Japanese government similar to the one in 2004.
Obama Says Economy Will Get Worse Before it Gets Better
The US automakers bailout talks have had Forex traders keeping a close eye on political developments in Washington. The recent statement by president elect Obama that the economy will get worse before it gets better has had a psychological effect on global Forex traders and global markets. At present the Bush administration is still calling the shots and it is anybody’
s guess what will happen between now and January 20th when Obama takes the oath of office.
