Forex Euro Dollar Forecast - Where is the USD Headed?

Now that 2010 is well underway, it is time to start thinking about how the rest of the year will look like. In this article, I want to share my prediction for the US Dollar in 2010. As always, predictions are totally personal and this one is based on my opinion alone, so you need to make your own trading decisions.

That being said, I believe (and have stated before) that this is going to be a very good year for the USD. Indeed, the American currency finished 2009 on a high note and it has been going strong ever since, rising about 10% versus the Euro.

I predict that the USD still has some way to go and may indeed continue to rise in relation to various major and exotic currencies throughout the year. I base this prediction on the following:

1. It is very clear that Europe is in a mess. Greece is close to defaulting on its loans and there is still no clear plan of aid from the rest of the Eurobloc countries. Other members of the EU seem shaky as well, including Spain, Portugal, Italy, and Ireland. How will be big European countries be able to help all of their weaker members? This is partly why the Euro has weakened and why it may continue to weaken in relation to the Dollar. Forex Euro Dollar Forecast

2. Japan is also on shaky ground with an ever increasing deficit and other financial issues. Some say that the Yen will crumble sooner rather than later. This will also mean that the USD will rise in 2010.

3. It seems that the Health Reform Bill President Obama promises is stuck in Congress and will not pass in its current form. I am not taking any political stand here, but if a smaller bill is passed, the US deficit in coming years is likely to be smaller, or at least so the market will believe. This will give another boost to the USD.

4. The American economy seems to be recovering, albeit slowly, and there is even talk of a rise in interest rates. If these rates are indeed raised (and this does seem likely), then the US Dollar will certainly rise as it becomes more attractive to investors worldwide.

For all these reasons I predict that 2010 will be positive for the USD and that it will continue to be the global currency of choice. Forex Euro Dollar Forecast