U.S.: Growth To Expand. How Much? by Angelo Airaghi [Guest Analyst] 2/8/2010

Concerns on credit’s availability are putting a cap on growth prospective, while the U.S. dollar is once again the safe haven currency. However, the correction might be temporary and prices should again move to the upside in the coming months. We are only in the mid of a long inflationary cycle which contemplates higher commodity prices and a lower dollar. Current sell-offs might be only in anticipation of milder growth in the months ahead for the United States and the rest of the world.

The global financial reshuffling is underway, as worldwide markets are in a selling tone and the U.S. dollar is once again the safe haven currency. So, from stocks to crude oil, the decline is unfolding and it might continue for the shorter term as well. The escalation of fiscal and credit challenges for some European countries is keeping the Euro under pressure. Proposals, both in the U.S. and in Europe, for tougher rules for financial institution activities are increasing concerns on credit’s availability and economic expansion. Finally, the possibility of inflation in leading economic nations, such as China and India, is questioning the magnitude of current recovery. However, the correction might be temporary and prices should again move to the upside in the coming months. In effect, we are only in the mid of a long inflationary cycle which contemplates higher commodity prices and a lower dollar. In addition, the U.S. economy has just moved away from the bottom, output reached the positive territory only in 2009, and upside potentiality remains intact for now.


Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media.

This article contains the following sections:

U.S.: output to expand

EUROPE: Better than the U.S. overall

EUR/USD: reaching support lines

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