U.S. Dollar Sees Strong Recovery after Economic Stimulus Bill is Approved
Posted on 16. Feb, 2009 by admin in USD Analysis, USD Economic Analysis, USD News
The U.S. Dollar opened this week with a dramatic jump in the right direction. Gaining strength against every major currency, except the JPY, the greenback has been benefiting heavily from the passage of last week’s economic stimulus bill, which is due to be signed by President Obama this Tuesday. Closing last week against the EUR at 1.2870, and against the Pound at 1.4358, the USD saw lows this morning around 1.2783 and 1.4251 respectively after market open.
The $787 billion economic stimulus bill passed by both the U.S. Senate and House of Representatives marked a great success for the early period of Barack Obama’s administration. The market jumped in excitement from the optimism this legislation brings to the American economy. While not a clear indication that the economy will start to recover immediately, it nevertheless places a degree of confidence behind the notion that it may indeed recover at a later time.
For now, the market focuses its attention to the signing of this bill on Tuesday, followed by the discussion of another bank bailout program to be detailed by various FOMC Chairmen later this week. The important economic figures to watch this week, outside of the layout of various stimulus and bailout plans, is this month’s housing data. On Wednesday, the U.S. government will release data on building permits and housing starts during the month of January, and may likely show a continuation to the recent downtrend these figures have seen since last year. Balanced against the stimulus euphoria, these negative figures may not carry as large an impact as usual.
