Dollar Falls Against Euro and Yen
The US dollar was mixed on Friday’
s trading, falling against the Eu
ro and Japanese Yen but gaining against the Pound. The failure of congress to pass the automaker bailout has Forex traders closely monitoring financial and stock markets. The failure of the bailout has caused uncertainty in financial markets and it was revealed that General Motors has retained bankruptcy counsel.
US Retail Sales Fall
There was additional bad news for Forex traders as recently released figures show US consumption contracted for the fifth straight month in November. The US Commerce Department reported that retail sales fell 1.8 percent during the month and consumer spending is predicted to remain down through the years end and into 2009. On the positive side electronics, furniture, clothing, sporting goods, and general merchandise sales all rose slightly during November.
Some economists believe that the gain is a result of heavy discounting and promotions by retailers during the holiday shopping season. Forex traders would be well advised to watch retail sales figures as these figures could provide Forex traders and investors with a gauge of consumer spending and how long the recession in the US will last.
Fed Expected to Announce Further Rate Cuts
On December 16th the Federal Reserve is expected to announce further rate cuts and some predict a rate of 0.50% after the cuts are made. The decision is considered important not only because of historically low rated but the expected FOMC’
s ( Federal Open Market Committee) statement may signal that the Federal Reserve is done cutting rates. Forex traders and investors should watch these developments closely. The news could have major consequences for the US dollar on Forex markets globally.
The coming week could well determine the dollar’
s short term future and reveal just how bad the US recession has gotten. The automaker bailout is still unresolved and markets are sure to react. Forex traders. and investors should watch closely!
