The Fight of the Dollar Versus the Yen
The yen is down against the dollar today, making the dollar a bit stronger around the world. At the time of this writing, the dollar was up about 0.5 percent for the day. Let’s examine this and see if this is a trend that is likely to continue.
The dollar is performing well around the world, thanks in part to a current lack of trust in the Euro. Thanks in part to the Greece debt crisis, the dollar has been slowly climbing. Japan, for the first time in a long time, has posted some economic struggling as well, although not nearly in the same boat as Europe. 2011 saw Japan post a trade deficit for the first time in over 30 years. And while Japan’s trading deficit does not compare in severity to the Greek problems, it is enough to keep prospective investors on their toes.
In comparison, the U.S. economy is finally starting to show signs of recovery. Joblessness dropped down below 9 percent across the country this past month—the lowest it has been in quite some time. While this alone is not enough to say that we are out of the throes of a economic hardship, it does indicate that things are getting better for the average U.S. citizen.
What does all of this mean to the Forex investor? The U.S. dollar is going to get stronger and the Japanese yen will get weaker, at least for a short while. This is something that Forex traders can use to help them make money, both short term and long. This is an especially great way to analyze binary options, as well. Since the yen is getting weaker, a binary options trader doesn’t need to worry about how much weaker, the price only needs to decrease by a single pip. If you haven’t tried binary options, you should. They are a great way to invest in the Forex market without exposing yourself to the same risk.
The economic hardship that Japan is facing is likely something that can be fixed within a couple months. Two months ago, the yen was up over 78.00 yen per dollar. Now, that number is below 76.60. With volume between the dollar and the yen slowly disappearing over the past couple years, it might be longer than usual for the yen to fully recover. In the meantime, it is quite likely that it will continue to fall. That is, until news out of Japan reverses this action. Last thing, don’t forget to checkout our Trader’s Elite Review. There is more information that will be mentioned in the future, but this is what we can provide you with today.