Will a $700 Billion Bailout Even Help the U.S. Dollar in Currency Trading?

September 25, 2008 by Trader Rich

Greenback may still falter in FX trading — even after the bailoutIt seems pretty obvious that a bailout bill of some kind is going to be passed by Congress, perhaps as early as next week. But will it even matter for the U.S. dollar in currency trading on the FX market?

Congress keeps calling on the Bush Administration to compromise and the administration has conceded in some cases. But will the new version provide support for the greenback in FX trading?

Some forex analysts think not. Indeed, some are rather pessimistic about the U.S. dollar going forward — even with the weak economic data coming out of the eurozone. Bloomberg reports on thoughts surrounding the bailout and the U.S. dollar in currency trading:

“The prospects of loose fiscal and monetary conditions in a economy that’s slowing rapidly is hitting the dollar, said Simon Derrick, chief currency strategist in London at Bank of New York Mellon Corp. Treasury Secretary Henry Paulson’s 0 billion bank-bailout package “may restore confidence in a lot of things but it won’t restore confidence in the dollar.”