News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bearish
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • Retail trader signals still hint that the Dow Jones and S&P 500 may be at risk, placing the focus on year-long rising trendlines to see if dominant upside biases hold.Get your market update from @ddubrovskyFX here:https://t.co/lFpzIFNmzW https://t.co/2rHKbiByuR
  • Update on #Cryptocurrencies #BITCOIN -0.24% #BITCOINCASH -0.90% #ETHEREUM -0.40% #RIPPLE -0.07% #LITECOIN +0.51%
  • 🇦🇺 Balance of Trade (JAN) Actual: A$10.142B Expected: A$6.5B Previous: A$7.133B https://www.dailyfx.com/economic-calendar#2021-03-04
  • 🇦🇺 Retail Sales MoM Final (JAN) Actual: 0.5% Expected: 0.6% Previous: -4.1% https://www.dailyfx.com/economic-calendar#2021-03-04
  • 🇦🇺 Balance of Trade (JAN) Actual: A$10.142B Expected: A$6.5B Previous: A$6.785B https://www.dailyfx.com/economic-calendar#2021-03-04
  • The path for the Japanese Yen seems to favor the downside looking at a majors-based index. USD/JPY may rise within its Ascending Channel, but there is some scope for a healthy correction. Get your market update from @ddubrovskyFX here:https://t.co/7XFJiCYYEM https://t.co/sSMeHIti1B
  • Heads Up:🇦🇺 Balance of Trade (JAN) due at 00:30 GMT (15min) Expected: A$6.5B Previous: A$6.785B https://www.dailyfx.com/economic-calendar#2021-03-04
  • Heads Up:🇦🇺 Retail Sales MoM Final (JAN) due at 00:30 GMT (15min) Expected: 0.6% Previous: -4.1% https://www.dailyfx.com/economic-calendar#2021-03-04
  • RT @FxWestwater: Australian Dollar Outlook: $AUDUSD, $AUDNZD at Key Levels as Trade Data Looms Link: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2021/03/04/Australian-Dollar-Outlook-AUDUSD-AUDNZD-at-Key-Levels-as-Trade-Data-Looms.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https://t.co/…
  • 🇯🇵 Foreign Bond Investment (27/FEB) Actual: ¥-1719B Previous: ¥-1888.7B https://www.dailyfx.com/economic-calendar#2021-03-03
Here Comes the Sequester! What Does it Mean?

Here Comes the Sequester! What Does it Mean?

Jason Shemtob,

Over the last few weeks much political talk has been focused on the “Sequester”, signed into effect by President Obama today. But what exactly does the sequester entail?

Essentially, the sequester is a series of budget cuts attached to legislation from the 2011 fiscal cliff deal, meant to compel lawmakers into compromising on long term deficit reduction. Unfortunately, Washington lawmakers failed to reach any compromise by today’s deadline and now the US economy faces approximately $1.2 trillion dollars in federal budget cuts over a 9 year period. These budget cuts do not target any one specific source of government spending, but they do leave certain government programs like healthcare and Social Security alone. Meanwhile, the U.S. military will lose upwards of $550 billion in government funding and certain community service and state programs will lose significant federal subsidies as well.

The fear is that the aforementioned cuts will lead to job loss and a drop in overall economic growth. While no one can say for sure how significant the economic impact of the sequester will be, some economists estimate a drop in GDP of 1%, or even higher, and hundreds of thousands of layoffs. Others, however, do not expect major economic consequences due to the long time period over which the cuts take place and the fact that Congress can avoid many of scheduled sequester cuts should they reach a budget agreement in the near future.

Here_Comes_the_Sequester_What_Does_it_Mean_body_Clipboard01.jpg, Here Comes the Sequester! What Does it Mean?

The fiscal cliff negotiations held at the end of 2012 caused a significant drop in US equities, while leaving the dollar relatively unharmed. Investors appear to have fled equities over fears that the U.S. would go off the cliff, yet the dollar remained stable due to its international safe haven and reserve status. Following the fiscal cliff agreement, however, both assets appreciated significantly. While the sequester appears to be an economic event of much smaller caliber, forex traders may want to keep in the mind the market’s reaction prior and post the fiscal cliff debacle.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES