Forex debt?

[fokerss]

i know the forex debt mean one contry take outstanding loan from other country or within country . but does it will effect the forex we usually play? it will make whole forex bankrupt?

 

[GOR FX]

Hi
It is highly unlikely that foreign debt will have a long term impact on Forex trading. The annual foreign sum is just a fraction compared to the daily 4T daily liquidity in Forex

 

[Pharaoh]

Debtor nations tend to end up with weaker currencies. It's a gradual process that won't have much effect on scalpers and day traders, but for longer term traders, the impact is there.

The combination of staggering debt, plus erosion of of the USD as the safe reserve currency is going to keep pushing the dollar downwards for years to come. The reasons it hasn't plummeted already is that many other currencies (such as the Euro) are having their own major issues and that the nations sitting on all that dollar debt don't want their dollar holdings becoming worthless overnight.

 

[Kristjan]

I have to agree with Pharaoh. I do have noticed that debtor nations in general tend to end up with weaker currencies. However, if a monetary zone can handle the problems without outside help (e.g. the Greece and EU), then it most likely won't have a long term effect on the currency.

 

[Pharaoh]

Greece had the rest of the EU help bail it out. If it had been Germany instead of Greece, the results would have been much worse for the Euro.

China and other creditors will continue to prop up the US dollar for awhile, but not forever. As it is, they can really only slow down the devaluation of the dollar, not prevent it.

 

[bigdolly]

It is possible that credit tranches have their impact on forex exchange only in a short period of time ( 1 month) after their execution. Debtor side currency get retracement (because of a short-term balance induced by filling of currency reserve) then slow creeping drawdown come.

 

[madi1991]

i think debt effect the forex.