Dollar to suffer from losses amounting to about 20 billion
The world’s largest economy is likely to suffer from a short term, yet strong blow in the gut owing to the super storm that is engulfing it at the present. The storm struck on a working day forcing an emergency closure of all financial offices and markets. Even the sturdy figure of the New York Stock Exchange was forced to close down owing to the wrath of the storm. Although the storm’s effects are not expected to be long lasting and the damages would be abated soon enough. Still a loss of twenty billion dollars, ten of which are insured, is expected.
The question mark of Greece Debts
The euro zone is trying its level best to hold the crumbling Greece economy but to little avail. There are meetings scheduled next week to find ways to stop Greece from running out of funds but the problem of the worsening debt crisis is unlikely to be solved in the near future. Greece is almost certain to face a recession phase and the euro zone which is attempting its revival will also feel its pang showing weak numbers. Buying back the debt doesn’t seem a feasible solution as it would be too much money wasted on little relief from the problem. Consequently the euro is suffering against all major currencies. It is currently trading at $1.2829 versus the dollar.
Holding its fort despite BOJ policy
The Japanese yen is not going to suffer too much due to the massive release of funds by the Bank of Japan. It is expected to stay near 80 yen against the dollar in the near future as it was on Friday and may climb up to about 83 in a year or so. The strong yen is detrimental to an export dependent economy; hence the devaluing policy of the BOJ was put to effect. The Japanese economic data and corporate earnings reports are also weak at the moment. The Japanese Yen denies shedding its strength even when it is borrowed against other high valued currencies ridiculing the forecasters’ expectations of it to weaken against the dollar.
Dips despite strong US employment report
Crude oil has retreated against the popular belief of it to raise due to increase in the US jobs. The main reason for this being the decrease in demand from the euro as the euro zone is suffering from a debt crisis. A combination of weak growth, enhanced fuel efficiency and sky rocketing prices has led to a dip in crude oil prices. Brent crude settled at $105.68 down by $2.49. The two oil refineries in the Northeast have been affected by “Sandy” and thus haven’t resumed their work which has also hit the crude oil prices a little bit. To add to all of this, the imminent presidential elections are also having a toll on oil prices.