Risk appetite makes cautious appearance in forex trading

After reaching a compromise regarding economic stimulus measures, Congress is preparing to vote on the much-debated bill today. There is a combination of government spending and tax cuts in the bill that are meant to help stimulate the economy.

On the expectation that the bill will, in fact, pass, risk appetite is making a cautious to the market. Indeed, even with the recent data out of the euro zone, the euro is holding steady in forex trading as traders consider moving away from safe haven currencies.

Of course, the economic stimulus bill isn’t the only thing bringing a measure of optimism to markets; the government is also talking about further capital infusions to banks and subsidies for mortgages. The way the markets perceive these actions will have profound influence on how the U.S. dollar and other investments do in the coming weeks.

See Also

• More on the Plan for Mortgage Subsidies
  Will mortgage subsidies do more for the economy than the economic stimulus bill?
• U.S. Dollar in Forex Trading
  World currencies in forex trading

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