Dollar set to stabilise on recovery talk

People concerned about the recent volatility in the foreign exchange market may be relieved to hear that experts are expecting to see the US dollar begin to stabilise after months of turbulence.

The global financial crisis which began back in October last year has led to significant volatility on foreign exchange markets as countries have struggled to cope with the problems and have entered into recession.

However, a growing number of experts are suggesting that the US and UK may be on the verge of emerging from their recessions, which could help to stabilise both currencies.

People from the UK planning to make an international payment will be hoping to see some stability in sterling, but the success or otherwise of the dollar remains important because of its position as the world's reserve currency.

However, an unexpected rise in unemployment in the US in recent months saw the dollar dip further this week, although most investors believe the economy is now beginning to pull out of recession, meaning long-term stability and growth of the dollar is expected to begin soon.

The foreign exchange markets have faced a torrid time in recent months and it has recently been suggested that the dollar may be toppled form its position as the world's reserve currency, although some experts have since dismissed that view.

By Paul Jarvis