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Will The Global Financial Crisis Help Boost The US Dollar?

Whenever major economic problems in the world happen, everyone seems to focus on the bad. They fear defaults, they fear regulatory change, and they fear little to no growth for the near future. But sometimes, if you change your perspective and how you look at the issues, you may be able to find some good…

One instrument that may gain quite a bit of value when all is said and done is the US dollar. Now, it is trading quite low compared to some of the highs it has seen in the past and the overall situation isn’t really improving in terms of the domestic US economy, but things are pretty stable right now. The US isn’t really going through a liquidity crisis like what is happening in the EU right now, and the US doesn’t really have to contend with a ticking time bomb like Greece, so international investors see it as a potentially safe place to put their money. The more they buy the US dollar, the higher the value will go.

On the flipside, though, you have to take into consideration the potential damage a high US dollar would cause for the US economy. Since the domestic economy is pretty weak, they are relying on exporting goods for a large portion of their economic activity. But, if the dollar gets too high, that will slow down and they will take a big hit.

 

Greek and Slovak Situation Hit Euro Hard

The Euro fell on Tuesday after it had one of its biggest days yesterday in over a year. While it didn’t give back all of its gains, there were clear signs of a major sell off and a lack of confidence from investors worldwide.

There were two main issues that many people are pointing to that caused this move – the Greek situation and the Slovak situation, which are both related.

Investors are still a little weary about the situation in Greece – there are just so many questions that are still answerless. Investors want to know if Greece will actually get aid, when it will be delivered, what the conditions will be, what the package will entail, and any other important information that is yet to be revealed. EU officials have been pretty tight lipped, and this is causing trouble for the markets.

Also, Slovakia is the last EU country to vote on the EFSF, and while it is believed that it will be approved, there are some rumors of a potential split and a delay. This wouldn’t be good news overall.

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