The “Day of Reckoning” for the global economy is nigh, says RBS, and the weak USD just postpones it. What’s next? Here is their view: Here is their view, courtesy of eFXnews: The Fed’s shift toward a more growth-friendly stance ought to be helpful in mitigating the downside risks to the world economy in the near-term. We had previously articulated that there was a more than a one-in-two chance of a global recession in the period immediately ahead. But via an unexpected Fed-induced loosening of financial market conditions that probability has fallen appreciably. Keeping recession risks under wraps, however, will require ongoing Fed accommodation and a weak US dollar. Indeed in the absence of bolder reforms and greater fiscal activism a weak US dollar is one of the only valves that can be opened right now to alleviate underlying global financial tensions. The paradox, however, is that those tensions are a by-product of too much global debt but they are being alleviated by incentivising further debt accumulation. This dollar valve moreover can only be left open without duress as long as the Fed’s credibility remains intact. And that will clearly hinge on whether or not the US labour market can continue to tighten without generating meaningful wage pressures. Any sign that the US labour market is tightening more rapidly than expected would clearly erode that credibility and impair financial instability via its impact on US profits, monetary policy settings and the US dollar. A day of reckoning for the world economy in other words has been postponed but it has not yet been averted. For lots more FX trades from major banks, sign up to eFXplus By signing up to eFXplus via the link above, you are directly supporting Forex Crunch. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Opinions share Read Next Commodity currencies, GBP suffering, watch out for the Panama Yohay Elam 7 years The "Day of Reckoning" for the global economy is nigh, says RBS, and the weak USD just postpones it. What's next? Here is their view: Here is their view, courtesy of eFXnews: The Fed's shift toward a more growth-friendly stance ought to be helpful in mitigating the downside risks to the world economy in the near-term. We had previously articulated that there was a more than a one-in-two chance of a global recession in the period immediately ahead. But via an unexpected Fed-induced loosening of financial market conditions that probability has fallen appreciably. Keeping recession risks under wraps, however, will… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.