Opportunities to Profit for USD Traders
At the start of the year, newly-elected U.S. President Joe Biden revealed a promising $1.9 trillion stimulus package to boost the nation’s economic recovery from the damage inflicted by Covid-19. Fast-forwarding to his first 100 days in office, Biden shared his ambition to “win the 21st century” during a speech on foreign policy which he gave to mark the occasion. From tackling climate change to restoring relations with China, Biden’s plans appear to be giving strength to the US Dollar, but how has this been affecting the Forex Markets and why does it matter to traders?
The US Dollar, a.k.a. the ‘Greenback’ is the most popular currency in the world and any changes in its value can trigger market movements across a wide variety of assets. Moreover, the US Dollar has historically been viewed as a safe haven among traders – although crypto has now also proven strong in this regard – meaning that investors turn to the greenback during times of market volatility.
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Opportunities to profit in Q2 2021 and beyond
The global economy has made a remarkable recovery since the March 2020 market crash and appears set to continue striving towards pre-pandemic levels of economic output. Despite the volatile highs and lows reported throughout the past few months, the US Dollar looks like it will continue to pick up the tempo on its road to recovery.
Economic growth in the U.S. accelerated during the first quarter of the year thanks to huge government stimuli for both households and companies. America’s GDP also grew by 6.4 % from the previous quarter, according to the U.S. Commerce Department. According to official reports, the U.S. is en route to having the strongest performance of the past 40 years. In fact, the Q1 GDP acceleration was the fastest recorded growth rate since 2003!
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As the US economy continues to rebound thanks to government support, lower jobless claims and a successful vaccine roll-out, it is forecasted that consumer spending and consumer confidence may also continue to increase in the coming months. All of these factors could lead to bullish sentiment for the USD.
The International Money fund is anticipating a growth of 5.1% throughout 2021, which would make the U.S. economy grow faster than other major players such as the Eurozone, Japan and the United Kingdom.
While further recovery seems likely, traders should be aware that the future of market prices is speculative. Amid rising global competition, any unexpected event could result in the weakening of the US Dollar. Either way, traders can benefit from the USD’s rises and falls by trading Major FX Pairs at LonghornFX.
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