Bush Administrations Announces Auto Bailout

Last week was a busy one for Forex trading as several countries released economic and employment data. Most of the news was not good but on Friday the Bush administration announced that they would tap the Troubled Asset Relief Funds (TARP) to bailout the ailing US auto industry. Previous to the announcement the dollar was down against the Euro and Yen but quickly regained ground with the bailout announcement.

Dollar Rises

After the announcement many took advantage of the Forex opportunities the announcement provided to otherwise skittish investors and bought dollar backed assets. Many economists believe the Dollar was highly oversold last week and is currently positioned to regain last week’s losses and potentially even strengthen more in the coming months.

Calm Week Expected

This week is expected to be somewhat calm marketwise as Forex and stock and commodities traders take time off for Christmas. Tomorrow, December 23^rd, the US will release important housing data that should give some insight into the US economy and could affect the dollar and Forex investment opportunities.

Wall Street Reacts

The auto bailout has helped Wall Street regain some measure of confidence and markets quickly reacted to the announcement of the bailout agreement. It has been estimated that the US would face over 2 million lost jobs if the automakers failed and would have a ripple effect throughout the US economy.

For the immediate future things are looking up for the dollar although a small number of economists remain skeptical. At present the dollar is seen as a safe haven and is still the world’s reserve currency. The coming holiday week promises to be a quiet one and we at Forexopportunity.org. wish our readers the happiest of holidays.