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Let’s have a look on the example of U.S. unemployment rate report. Suppose there is a sudden reduction. So what sort of effect this particular drop has on the value of dollar? One obvious thing could be the fall in the value of dollar. Another question that might arise is that whether the dollar is presumed to increase in value, if there is a drop in the rate of unemployment? Even when people have more jobs, there is a reason why the dollar still has a decrease in its value.

Downward Spiral Trend Of The U.S. Economy:

There is still a long term and overall downward spiral tendency of the U.S. economy. This can be regarded as a first reason. The strength or weakness of an economy depends upon some basic factors. Even though there is a reduction in the unemployment rate, but it can not be considered as big enough means for the big traders as it can not change their perception about dollar.

Seasonal Hiring Of Employees:

The second reason can be associated with the drop in the rate of unemployment. Normally during the holidays, hiring of seasonal employees is done by many companies in order to sustain the invasion of the Christmas shoppers. Due to this increase in jobs, there is a short tem reduction in the rate of unemployment, but it can not be regarded as a long term viewpoint on the U.S. economy.

Making A Comparison:

An excellent way to obtain a more precise measure of the unemployment condition is to make comparison of the recent year statistics with the last year. Read the full story

When we talk about currencies, the US Dollar and the Euro dollar are the first ones that come up to mind, and no wonder, since these two currencies are the most commonly used and accepted. Due to their high liquidity ratio, some forex traders don’t even consider trading other currencies and only deal in the aforementioned currency pair.

In this article, some light will be shed on either currency, on how they might perform in the current year. Predicting and forecasting of euro dollar and US dollar with logical reasoning.

Euro Dollar Past

If we look back at 2010, it was a bad year for the Euro dollar, just plain bad. It came to such a point where it was trading almost as a direct exchange with the US Dollar. After a subsequent recovery, the euro dollar is now trading around $1.4. The problem that the weaker forces of the Euro zone faced, the big players were able to endure.

The financial crisis in Greece bought the attention of the whole of Euro zone and they had to be bailed out in order for them to survive. Similarly, Ireland had a minor bailout. The Euro zone dodged one bullet but what about the remaining bullets in the magazine!

Euro Dollar Present & Future

The year 2011 may not be so kind to the Euro zone if things keep on going the way they are. The country now facing a key economic encounter is Spain. A country much larger in every way than Greece, Spain is facing unemployment rate of 20.4% and huge debts. Greece was saved by a bailout, but the probability of a Spanish bailout is as much as that of a pirate is sentenced to death by the Somali government.

The demise of Spanish economy would not only hamper Spain itself but the euro dollar too. Meanwhile, other important economies of Euro zone like the Italian and that of Portugal may also require some aid for stability.

Read the full story