World Watching After Obama Victory

The historic election victory of Barack Obama has the whole world watching the United States. The current economic crisis, the worst since the great depression, has been cited as a major factor contributing to Obama’s victory. The election is seen, in part, as a repudiation of Bush economic and monetary policies. Excitement about the election of Democrat Obama as the first black president has been tempered by the realization of the challenges he faces as the US economy teeters on the brink of recession.

A New Deal For A New World

European Commission President Jose Manuel Barroso stated; “We need to change the current crisis into a new opportunity. We need a new deal for a new world; I sincerely hope that with the leadership of President Obama, the United States of America will join forces with Europe to drive this new deal.” Obama is seen by world leaders as more amenable to working with the leaders of other countries to solve common problems unlike the ‘go it alone’ policies of the Bush administration.

Market Reaction Lukewarm

Market reaction to the victory was lukewarm. But shares on Wall Street are expected to fall because of concern of a world economic downturn. The Dollar remains firm still providing investors with Forex opportunities not available anywhere else. Asian stocks are at a three week high while European shares are down 2%. Economists agree that Obama has his work cut out for him.

The Likely Picks For Treasury Secretary

It is expected that Obama will move quickly to appoint his cabinet. The next Treasury Secretary will inherit unprecedented responsibilities and will be faced with the oversight of the $700 billion dollar bailout package. The actions of the Treasury can have an impact on the value of the US dollar, impacting world currency markets and affecting investor’s Forex opportunities. Obama’s short list for this position includes, Treasury secretary Lawrence Summers, ex-Federal Reserve Chairman Paul Volcker and Timothy Geithner, head of the Federal Reserve Bank of New York.

Second Stimulus Package in the Making

Obama has advocated a second stimulus package with a price tag of $175 billion that would include money for investments in infrastructure as well as another round of tax rebates. Obama has also announced plans for many n increased Federal programs although it is not clear how these would be funded. The Treasury has announced the return of the three-year note when it sets out plans for borrowing which could total $2.1 trillion in the current fiscal year, to fund its massive bailout program.

Dollar Holding its Own

The dollar has been performing well throughout the financial crisis providing investors with plenty of Forex opportunity against other major currencies. Credit markets are experiencing a slight thaw although things are far from normal. Stock markets are still somewhat volatile but currency markets continue to provide the small investor with Forex opportunities.

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