November 14, 2007

US Dollar vs. the Japanese Yen – How do They Measure Up in Forex?

There is nothing new in the fact that the US dollar is not as steady as it used to be. Back in the 20th century it was a one of the most steady currencies. In the 21th century many things changed and the currency is in a decline for a while now. The events and struggles America and the rest of the world have known since the beginning of the century have affected the currency and the economy of the US.

The Japanese Yen has been for many years a fair partner to the US dollar. The arise of a new currency – the euro - has made life difficult for other currencies. The euro currency has affected the dollar currency and the Japanese Yen very much. The euro currency in itself has managed to climb to the top of the market on the backs of the dollar and the yen.

A surprising thing happened to the Great Britain Pound even though many Europeans were angry and criticized the British for not changing their currency and changed it to the euro it seems now that it was quite a wise step. The Great Britain Pound today is a very strong currency that was not affected by the euro like the dollar and the yen.

Both the Yen and the Dollar seem to be competing for the title as to who has the worst fortune. They are both going down hill lately and they don't seem to be getting out of it. The reason why we hear so much about the Yen and the Dollar is because they were such strong and stable currencies not so long ago that it is unbelievable that things have changed so much in such a short time. The reason for all the attention the fall of the yen and the dollar might be the fact that people enjoy seeing the fall of the strong.

The difference between the Yen and the Dollar is that the Yen has no real reason for the fall. The US dollar has many good reasons to fall. If you take into consideration all the troubles America has gone through since the beginning of the century. Starting with 9/11 and the economic troubles that followed with a feeling of financial depression you have enough reasons for the big dollar fall.

The fall of the yen has its own connection to the US dollar. In the forex market you must first trade with the yen only then you can trade with the euro. This connection is probably causing some of the decline in the Yen. The trade between the Yen and the Euro is done with dollars there is no straight way to trade with the yen.

In conclusion, as sad as it may be, neither the dollar nor the yen are showing signs of hope. Even the future can't promise us any good news about this.