World Economic Forum in Davos Switzerland

The annual World Economic Forum now taking place in Davos Switzerland has attracted the attention of Forex traders from around the globe. On their website the World Economic Forum states that their purpose is, “an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas.”

Forum to Address Crisis

Because of the global financial crisis this year’

s meeting will be of particular interest to Forex traders and investors. Forex trading has been tumultuous during the crisis and Forex traders search through reams of data and statistics to glean useful information that will help them make successful trades.

Dollar’s Role as Reserve Currency Criticized

The US dollar continues to be the world’s reserve currency accounting for 63.9% of official foreign exchange reserves as opposed to 25.5% for the troubled Euro and 4.7% for the British Pound. This has raised the ire of Russia’

s Vladimir Putin who believes that it is dangerous for the world to excessively rely on the US dollar as the only reserve currency. In a statement which should have Forex traders taking notice Mr. Putin said, “Excessive dependence on what is essentially the only reserve currency is dangerous for the world economy, therefore it would be expedient to encourage an objective process for the emergence of several strong regional currencies in the future.”

Concerns About US Stimulus Program

At last year’s forum Bill Gates, Warren Buffett and George Soros predicted a collapse of the US dollar that did not materialize. At present the US dollar is being propped up by the perception that it is a safe haven currency. There was concern about the ‘buy American’ provisions in the Obama administration’

s multi billion dollar stimulus plan. Peter Allgeier, acting U.S. trade representative, assured forum attendees that the Obama administration understands concerns that the proposal could spark a trade war which would prolong the recession.

Gathering of Business Elite

Forex traders and investors will be watching the annual forum very closely. The annual forum draws a collection of the wealthiest business leaders and government officials from around the world. The discussions have profound effects on global markets and wise Forex traders will be paying close attention.