The US government shutdown in October, and related concerns about a possible debt default, are still leaving a negative mark on the US economy. The footprint of this can partly be seen in the reduced value of the US dollar, which is currently struggling against most of its major competitors in the currency market.
The US government shutdown is now over. Concerns about the nation possibly needing to default on its debts, meanwhile, have come to a relatively positive resolution. The current plan seems to have put off the danger for the immediate future and put the US back onto a fairly firm economic footing.
Nonetheless, the US economy, while looking a lot safer, is still not entirely back to normal. In particular, the US dollar is struggling to maintain the value or the level of appeal to currency traders that it had before the shutdown. Prior to the crisis, the US dollar was performing strongly against competitor currencies. This was partly due to strong interest from foreign exchange traders, who were keen on investing in the US dollar.
This stemmed partly from Obama’s nomination of Janet Yellen to succeed as Chair of the Federal Reserve. Even though the danger of a possible shutdown was already looming, Yellen’s nomination was taken as a very good sign indeed for the US economy and for the buying power of its currency in both the short and long term future. Yellen was expected to proceed with policies that safeguarded key areas of the country’s economic strength, and fostered growth and progression in years to come.
The fact that this led many experts to proclaim the USA as a safe economy and the dollar as a good investment means that quite so much difficulty at this early stage has come as a shock to many. However, although the effects of the shutdown are taking longer than expected to dissipate, they are still likely to be relatively short-lived compared to the factors that inspired confidence. This fact means that hopes are still high among many analysts that the US may still have a strong, secure future after this setback. These hopes are bolstered by the fact that, in spite of all the recent troubles, recently announced figures have indicated a drop in unemployment within the US. However, some still maintain that the difficult times may last until the end of 2013.