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Forexmentor.com Forex Trading Price Action

So, what gives between Canada and the U.S.? Where is the U.S. dollar going anyway? Question, questions! Canada’s GDP is showing strong growth, as are employment and housing. Similarly, GDP and employment are strong in the U.S. – but not housing. The housing collapse in the U.S. precipitated a credit crunch that was felt around the world. To stem its after-shock, the central banks injected liquidity into their financial systems. The States went one step further, and cut interest rates. This presents a paradoxical situation.

If the U.S. economy is growing, why then would the Fed cut rates? This appears to be a reaction to the housing crisis, and its attendant effect on the U.S. financial markets – all the while the greenback is in the dumpers. One would think that the only result could be further weakness in the U.S. dollar. This news brought to you by www.forexmentor.com.

Source: CTVglobemedia Publishing Inc. - globeinvestor.com.

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