Forex Fundamental Analysis

As the world waits to see if America will step away from a voluntary default on its debts and plunge the global economy into chaos, further news has emerged in Europe of a strengthening recovery.

Major markets ended the week higher, with the exception of the Nasdaq composite index, on renewed optimism that an agreement will be reached to raise America’s borrowing ceiling and reopen government, but no concrete deal has been struck yet.

The US Dollar is the world’s reserve currency and many bilateral trade agreements that involve currencies which cannot be immediately converted into one another are conducted via the Greenback.

Ben Bernanke is to step down as Chairman of the Federal Reserve after eight years at the helm of America’s central bank. The 59 year old will step aside in January, so naturally there has been much speculation as to who will succeed him.

The UK economy shrank in Q4 2012 and it was initially suggested that the nation would fall back into recession in Q1 2013, but in the end, revised figures showed growth of 0.4% for the quarter.

Central Banks try to control their economies through monetary policy, a key component of which is the base interest rate. The European Central Bank (ECB) has decided to leave interests rates unchanged at 0.5%, its lowest ever value and where it has been since May.

The US government shutdown and the impending debt ceiling crisis have caused markets to fall. Only the Nasdaq managed to put on any value.

Established in 1948, England’s National Health Serivce, has grown to become the largest and oldest single-payer healthcare system in the world. Get the full article on the recent Obamacare events here.

The US government has run out of money for many of the day-to-day activities that any administration needs to cover since the 2013 budget allocation has been exhausted.

Prime Minister Enrico Letta has comfortably survived a confidence vote in his government, with 235 votes in favour of the government continuing and 70 against.

An uneasy coalition emerged after Italy’s general election in February which saw Beppe Grillo’s 5 Star Party poll 25.5% (108 seats) in the House of Deputies, making it the largest party in parliament, and 23.8% (54 seats) in the Senate.

Midnight last night was the deadline for finding a consensus between the Republican led House of Representatives and the Democrat led Senate over a budget for next year which would have allowed the government to continue to pay all public employees.

Friday marked the end of the week, the month and the third quarter of 2013 for the purposes of these summaries. Get the full fundamental analysis here.

The London Interbank Exchange Rate (Libor) scandal has claimed another victim, ICAP, with further fines levied and criminal charges brought against 3 former employees.

It is often said, and for most people true, that the biggest purchase you will ever make is your home.