Strong Impact US Dollar Over Long Run
The economic crisis is permeating various levels of the U.S. economy, as central banks and financial ministries are working concentrically to restore hope among investors. The enormous mass of money will have a strong impact on the U.S. dollar over the long run, albeit inflation should remain subdue for the shorter period of time. The Euro currency, in the mean time, is again testing important resistance levels against the greenback.
As the economic crisis is permeating various levels of the U.S. economy, central banks and financial ministries are working concentrically to restore hope among investors. The Obama administration is expected to promote a rich simulative fiscal package in the range of USD 500 billion to 1 trillion dollars soon after taking power. It should give a boost to the economy in the United Sates, but the enormous mass of money will have a strong impact on the U.S. dollar, the bond market and prices in general over the long run. In fact, incentives and regulations are only a short term cure that could exacerbate the damages created by decades of careless finance.
Inflation should again rise to historical levels, once the economic slowdown will subdue, and interest rates might reach the two digit numbers in the coming years. For now, nonetheless, one of the strongest recession of a generation is keeping prices at an acceptable level, albeit the cost in term of job losses could be substantial. In the third quarter of 2008, the Gross Domestic Product (GDP) was confirmed at -0.5%, but numbers could deteriorate in the fourth quarter of 2008, and eventually in the first part of 2009.
As the economic crisis is permeating various levels of the U.S. economy, central banks and financial ministries are working concentrically to restore hope among investors. The Obama administration is expected to promote a rich simulative fiscal package in the range of USD 500 billion to 1 trillion dollars soon after taking power. It should give a boost to the economy in the United Sates, but the enormous mass of money will have a strong impact on the U.S. dollar, the bond market and prices in general over the long run. In fact, incentives and regulations are only a short term cure that could exacerbate the damages created by decades of careless finance.
Inflation should again rise to historical levels, once the economic slowdown will subdue, and interest rates might reach the two digit numbers in the coming years. For now, nonetheless, one of the strongest recession of a generation is keeping prices at an acceptable level, albeit the cost in term of job losses could be substantial. In the third quarter of 2008, the Gross Domestic Product (GDP) was confirmed at -0.5%, but numbers could deteriorate in the fourth quarter of 2008, and eventually in the first part of 2009.
AUDNZD Technical Fundamental
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