The Fiscal Cliff Clock is running out as Washington tries to decide what to do about the dangerous Fiscal Cliff.
After months of speculation, media coverage, and news articles, the peak of the event has arrived. If the United States does “fall of” the cliff, it is very possible that America will have another economic recession.
According to reuters a deal is said to be in the works that would raise taxes on those with a household income of $450,000 or higher. The democrats would have the task of getting republicans on board, which is very unlikely to be accomplished.
There is a high possibility of delaying the decision.
Kathy Lien gives insight on what she thinks will happen if a decision is delayed or if a decision is confirmed on Monday. “If it becomes evident that a deal will be deferred to January, expect currencies and equities to sell-off in disappointment. With some major currencies pulling back and equities declining, we have already seen investors take profit and hedge their positions ahead of the Fiscal Cliff deadline. If Obama announces a stripped down plan and expresses confidence that a deal will be sealed by end of day Monday, we can expect currencies and equities to rally in relief.”
It is no surprise that Forex Trading will be influenced by the decision today, or lack thereof.
It is paramount to protect your capital and be careful in these very uncertain times in the U.S. economy. I think risk aversion could play a big part in the value of the USD in the first quarter of 2013.
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