Source: ForexYard
President Barack Obama’s economic stimulus plan is set to be voted on tonight in the U.S. House of Representatives. There is no certainty that he will get the required number of votes in order for the bill to be passed. However, the odds are in the bill’s favor. When the $825 million economic stimulus package does get approved, this is likely to push the Dollar up in the short-medium term. Additionally, it may curb the severity of the global economic recession.
It is important to understand that Obama faces opposition from conservative Republicans and liberal Democrats within his own party. On one hand, the conservative Republicans are concerned about socialism. Also, they want Obama to make more guarantees of tax cuts to middle-income workers, and to help small businesses. On the other hand, liberal Democrats are concerned that the tax cuts won’t go far enough to help lower-income workers, and will mainly benefit corporate America.
The approval of the stimulus bill will not only strengthen the U.S. Dollar, it will also lead to more volatility in the forex market. This may come about as each economic data release and important news event coming out of the world’s leading economies is likely to have a bigger impact on the currency markets than today, because if economic figures are negative, then investors will be more wary of the global economy than before the bill was passed. This is so, because the stimulus package is meant to kick start the U.S. economy. Additionally, it is meant to have knock-on effects on other leading economies.
On the other hand, if there is good economic data releases in the future, then safe-haven currencies such as the Dollar and Yen are likely to fall more than in today’s circumstances. Traders are advised to follow the news coming out of the U.S. as America’s Congressman vote for or against Obama’s stimulus package. The outcome of the vote later on is likely to lead to high volatility in the forex market in tomorrow’s trading. If you want to take advantage of the forex market, then we recommend you open an account and start trading today!
Forex Market Analysis provided by ForexYard.
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