Well, in all my 6 years or so of trading I don’t think I’ve ever seen an economic announcement been cancelled, but that’s exactly what has happened, the US has closed down and so the government department that announces the Non-Form Payroll change has closed, what will all the forex traders do? They’ll be at a total loss, but more likely down the pub celebrating an early finish.
Forex And The Non-Farm Payroll.
The NFP has given me many hours of interest and sometimes entertainment if not profits over the years, the way it sometimes jumps 300 PIPS and goes all the way back to where it was in a short few hours that are left at the end of the week. And of course I tried to trade it, hasn’t everybody? It’s a wheeze at first, especially if you get it right, the amount of profit I have made percentage wise sometimes from one NFP trade was eye-watering, like a 50% return in a couple of hours. At one time I was convinced I only needed to work 2 hours every month on the first Friday of the month, but of course that situation never transpired. I soon realised that news trading was fraught with danger and you you could lose money quicker than usual, and it wasn’t realistic to wait for the NFP every month, which may or may not cause volatility which might also be in a totally opposite direction to what you might expect. So today the 4th of October 2013, I expect little action on the forex market in the absence of the NFP, the only thing that would have an impact maybe is if the Dow suddenly lost nerve at the prospect of a whole weekend where anything could still happen because of the debt ceiling crisis and with the markets closed, it could be a big wide gap at the opening on Monday morning.
The ObamaCare Crisis And Forex.
This crisis is starting to drag on a bit, and it isn’t what could be the worst of it yet, the real major crisis looms when we arrive at the date for increasing the debt ceiling, which is needed so that the US doesn’t default on it’s debt. What would happen if the US defaulted on it’s debt, I do not know, nobody knows the full impact , we can obviously see that some bills won’t get paid but the jitters that would send through the forex markets could be quite staggering. The US Dollar could plummet across the forex market, how much and for how long, nobody knows, but it would depend on when the US could pay it’s bills again. It is quite an odd situation, take the Greek Crisis for instance, they couldn’t pay because they couldn’t raise the money to do so, they had no choice. In the States it appears more to the outside world that they could pay their bills but they can’t agree to do so, will this fact limit the fall of the dollar, for the short term I expect the international community will assume that eventually there will be an agreement and the debt ceiling will be increased and the US will default only temporarily at worst. Currently though the US dollar is relatively strong across the forex markets in general, with the EUR and the GBP closer to the bottom of their 10 year ranges rather than at the heights like we saw in 2007, prior to the big crash. One thing is for sure though, that current levels of borrowing in many western countries has to be restrained, it is only slowly that we are getting the rate of borrowing down, we need to be paying back this debt over the next few years, I don’t think the world financial system could handle more debt, it would get to the point of no return where the debts would become unserviceable without very drastic actions. All this though is great news for forex traders, it is the news that will drive the forex markets over the next few years. And no doubt the merchant bankers will still be earning their high commissions and no doubt the poor old tax payer and the pension scheme investor will foot the bill of the Champagne Charlie’s.
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