Economic Recovery Could Be On The Way

Currency trading on the FX market

When deciding on a plan of action for currency trading on the FX market, it can be a good idea to consider the possibility of economic recovery. Right now, there is hope that economic recovery is on the way.

The economic data, especially today’s jobless claims, shows an improving picture. However, the economy is improving at a miniscule pace, and there is speculation that economic recovery will be something less than robust.

GFT’s Kathy Lien reports in FX360 on the Fed’s cautious optimism about the economic recovery:

As for the economy, the Fed sees signs of stabilization. Housing activity and motor vehicle sales are improving while overall consumer spending is leveling out. The recovery is expected to gain momentum in 2010 but consumer demand will still be constrained by reduced household wealth. Although the Fed is more confident that the recovery is underway, the strength of the recovery is still uncertain. Even within the central bank, there is a disagreement about the pace of the upturn because of tight credit and the risk of adverse shocks.

These signs of stabilization are also leading to some changes in currency trading on the FX market. Risk appetite is slowly making a comeback, and the euro and sterling are higher today.