Forex Blog: Currency Trading News & Analysis.

August 25th 2006

Global economy might be hurt by US

For many decades, it was an accepted truth that the fate of the global economy depended largely on the state of the US economy. Over the last few years, however, this link has gradually eroded and many economists now believe the global economy can expand even when the US is in recession. As it becomes more apparent that the US economy is peaking, this belief will soon be put to the test. US housing data, which is closely followed by economists because of the important role it plays in the US economy, indicates that the real estate market is beginning to recede. If emerging markets-which are most dependent on the US as an export market- are able to cushion their economies from the looming US recession, their currencies will be the first to gain. AFX News reports:

Major currencies were stuck in narrow ranges against each other amid concerns about the prospect of a slowdown in the US spilling over to affect growth elsewhere in the world dampening sentiment all around.

Read More: Major currencies rangebound amid worries about slowing growth outlook

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