Dollar Shining After Obama Inaugural

Friday, January 23, 2009

The British Pound Sterling is falling today, down to a 7 ½ year low against the dollar and the Euro has fallen to a new six week low against the currency of Obama as well. Banking woes, economic uncertainty, lack of faith in England’s new bailout plan are all contributing to the downslide while the US is tapering some of its inauguration day losses while Forex Brokers are scrambling to find something that is stable in what has been a highly volatile week. At the moment, the Sterling is trading against the dollar at $1.3718, a 1.2% drop bringing it back to 2001 levels.

But it is not only the US Dollar that is benefitting from the British currency’s woes, the Yen, much to the chagrin of the Japanese government which wants to keep the currency from getting too strong, reached a record high against the Sterling today – up over 1% to 123.53. In what Forex Brokers see as a response that is not in line with the wants of the Bank of Japan, the Yen is gaining strength against the majors – also hitting a 13 year high against the dollar. Today, the BOJ will be coming out with a plan to boost lending to businesses (aka commercial paper) in order to thwart ill effects of this credit crisis. Look for the YEN to pare some its recent gains as the BOJ’s hidden agenda is to stem the growth of the YEN in order to protect exports as well.

2 comments:

Pabbe January 26, 2009 at 7:51 PM  

I think this is just because of the Obama factor. Maybe we should let the new government settle down first before analysing it.

- www.seoin.info

somya January 28, 2009 at 1:23 PM  

Yea... obviously things cannot be rectified overnight but surely light of hope has definitely lighten the americans.......

Nice blog.... I'll keep following....

Great work.....

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