Forex Blog: Currency Trading News & Analysis.

January 10th 2008

Potential Tax Cuts Boost USD

Recently, most of the news regarding the Dollar has, frankly, not been positive.  The housing crisis is beginning to take its toll on the broader economy.  The Fed is planning to lower interest rates at its next meeting, which will eliminate the positive differential with Euro-zone rates.  High commodity prices are driving inflation and eroding the value of the Dollar.  But today, the news was good- at least as far as the USD is concerned.  The Wall Street Journal leaked a document from the Bush Administration that mentioned tax cuts for households and businesses.  The aim of the tax cuts, ideology notwithstanding, is to provide a stimulus for the reeling economy.  As they say, what’s good for the US economy is good for the Dollar.  Reuters reports:

"Given the market’s perception that a (U.S.) recession is looking increasingly inevitable, tax cuts and any stimulus measures offered by the authorities will obviously bode well (for risk appetite) … It’s more positive for the dollar because there is a sense that it may help avoid a recession."

Read More: Prospect of US tax cuts boosts FX risk appetite

SocialTwist Tell-a-Friend
Posted by Adam Kritzer | in Politics & Policy, US Dollar | No Comments »

Sponsored Offers

FREE Daily Email Updates

Enter your email address:

Delivered by FeedBurner

Have Questions? Want to Share Your Review?

Be heard. Please share your reviews today!

Neighboring Posts

© 2004 - 2024 Forex Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.