At present, the US is going through a tough time. There have been numerous rumors about whether President Trump should be impeached by the Senate. Given the gravity of the situations, it can be easily perceived that it would have a significant impact on the currency market. As the dollar is tied with the key currencies in the forex and make up the major pairs, the investors need to understand the probable impact of the upcoming situation. Although the news is still building and involves many angles, we will try to examine the possible outcomes from the lenses of a currency trader. If you are wondering whether the next trade is going to be a worthy decision, take time to read this article.
Why on earth Trump is on the verge of impeachment?
Before we go into the discussion, it is important to understand how the country works. It is the economy that drives any country to development. After taking over the White House, there have been significant changes in international trade relationships by the USA. As a result, it is not only facing global challenges but also causing a movement in the stable currency valuation. For instance, China has been banned in the US and this has become a global issue, triggering a series of events in the tech industry.
The dollar is the only currency that holds the power in forex. Every major currency is paired with the dollar, this small explanation can help to understand the value. This decision, if successful, will not only benefit the US consumers but also the economy as a whole by reopening the global business relations. Hence, the issue of currency exchange comes. If most of the country starts depending on Japanese companies, the Yen will start to rise in value. Of course, there is no way Trump can understand these complex topics but being a trader, it is the responsibility to assess all the dangers before investing.
Impact on the traders
Due to the ongoing crisis in the U.S economy, the traders need to be very careful with the trade executions. If the execute random orders in the Forex trading account, they are not going to make any profit. You must act like the elite traders in Singapore. They always consider the fundamental factors before they place any trade. If you want to change your life, make sure you are not aggressively taking things. Try to use the conservative method as it is the most efficient way to make a profit.
What happens if impeachment is successful?
Imagine for a moment this is no longer a dream but a reality. The first thing you will notice is there will a rise in the US dollar. This is natural as more investors will soon start putting in their stakes in US companies that will eventually raise the bar on the chart. Still, we do not advise the traders to get carried away. This can be only temporary, try to observe the market for a few weeks. Do not make any hasty decision, take time to evaluate the current conditions. Remember, a crucial deal signed with the UK overnight can change the tide in the morning.
The natural volatility of most major currency pairs will also shift. The only reason people take a keen interest in major currencies is due to the stability of the US currency. However, there will be a temporary shift due to this big event. Scalpers will try to make a profit on this opportunity but we would advise staying put.
Another fact that is not said is the correlation. Traders with all types of currencies will experience an economic shock. Do not think it is safe to invest with Pound as the world is a global economy. Observe the exchanges, take notes from financial gurus and formulate a plan.