The competition between the United States and the Yin is one that has been steadily heating up over the past decade. The U.S. greenback recently gained some momentum, reaching a six month high for the year. The news has traders guessing about the future of the currency as they anticipate the influence that such news will have on coming decisions to be made by the Federal Reserve. Part of the rally for the greenback is thanks to the expansion of United States manufacturing. This expansion is well ahead of most United States, Forex competitors. The economic information indicates that the increase has been coming at a pace that has not been seen since 2011.
This news is extremely good for the largest and most influential economy on the planet. The data represents further evidence that the recovery of the U.S. economy is alive and well. Within the manufacturing sector, new orders and those applicable to existing production rose an average of 62.8 percent. The new confidence in the demand for good is allowing companies across the board to invest in expansion and hire new workers. The strength of the greenback and the fact that employers are opening their doors confirms the research that is being presented to the world by the ADP Research Institute. Investors around the world are taking notice and positioning themselves before the release of the Beige Book Business Survey by the U.S. Federal Reserve.
Neighbors to the North
The competition may be falling behind, but they are certainly not out of the race. The Canadian dollar has fallen primarily due to the fact that consumers in the private sector are getting into considerable debt. However, the country is counting on trade to boost its economy in the years to come. The Canadian exchange rate has also been feeling a crunch due to the increase in U.S. manufacturing as well. The Federal Reserve is likely to cut back on annual bond purchases from this country, causing further concern for the Canadian economy.
Not All Good News
There is a drawback to the recent financial news for the United States, however. Gold prices have declined, subsequently causing the increased demand for the U.S. greenback. Plenty of variables concerning the future of the greenback reside solely with the Federal Reserve, however. Monthly asset purchase within the country are expected to decline, falling below the average figure of $85 billion. Given the facts, all things indicate the end of stimulus programs around the nation.