Will Devaluation Of The Dollar Impact Emerging Markets Growth?

Foreign Currency Trading

The US dollar is continuing  to gap down. According to the following article, sovereign nations are extremely concerned about the devaluation and are scrambling to stabilize their own economies. They believe this devaluation of the dollar will have an impact on emerging markets' ability to grow and we could continue to see the fallout of a deteriorating U.S. currency. That is quite possible.
    . . . June

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A Look at the Stock Market Cycles
Benzinga.com Posted on 09/27/10 at 2:23pm:

The U.S. Federal Reserve declared war on deflation Tuesday, stating that they will provide additional accommodations should any deflationary signs occur. I wrote several weeks ago that Washington will provide the relief necessary to rescue markets before the November election.

President Obama is in the process of changing his entire economic team before the election, while voters are expressing concern and outrage over high unemployment and the real estate foreclosure crisis.

Their concerns are valid as our unemployment rate is much higher than reported. Although published economic reports should be studied, the most important criteria is price action because that shows the true supply and demand of the global market. There are additional ramifications of Thursday's statement from the Federal Reserve. China and Japan have a seriously appreciating currency versus the dollar.

The dollar is gapping down to new lows. Usually a weak dollar has been bullish for stock markets as investors were less risk averse. However, I don't believe this will be the case this time. Sovereign nations are extremely concerned about the devaluation and are scrambling to stabilize their own economies. I believe this devaluation of the dollar will have an impact on emerging markets' ability to grow and we could continue to see the fallout of a deteriorating U.S. currency.

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