Forex Fundamental Analysis

The end of the European heat wave this week marked a downturn for most of the world’s major stock markets with only France’s CAC40 bucking the trend.

Australia is concerned that its economy is slowing too much and has acted to stimulate growth by trimming its interest rates to a record low.

The new Governor of the Bank of England, Canadian national Mark Carney has signalled that Bank of England interest rates are to remain on hold until after the recovery has kicked in sufficiently to bring UK unemployment down below 7% from its current level of 7.8%.

Markets like certainty to be able to plan ahead.

The Federal Reserve has made it clear that it will continue its policies of bond and mortgage-backed securities purchasing until US unemployment falls below 6.5% and that withdrawal of support will be a gradual process that will not be triggered until the threshold is reached and depending on current circumstances.

Another good week for the world’s major stock exchanges saw all of the majors end higher.

Initial figures, which will be revised as a more complete picture of performance emerges as further data becomes available, indicate that the US economy grew by 1.7% in the second quarter of the year, on an annualized basis.

A major policy imperative of the Japanese government is to stimulate domestic economic demand and put an end to the years of deflation that have dogged the Japanese economy.

The performance of the UK economy in the second quarter of 2013 needs to be set within the context that the Eurozone, as a whole, was in recession in the first quarter of the year and most analysts are expecting it to remain so until the third quarter.

In June, the US Dollar slipped from a value of 100 to the Yen down to a low of 94 before rallying to end the month at 98 Yen to the Dollar.

Friday marked the final trading session for July from the perspective of these summaries.

China is the world’s second largest economy behind the USA and enjoys the highest level of growth in any major economy by far.

Over the past 12 months, the Japanese Yen has depreciated by some 39% against the Euro.

The writing seems to be on the wall for large multi-national corporations over payment of taxes and ever more inventive ways to avoid them as the G20 backs moves designed to tighten up.

The market has reacted well to the economic direction that Prime Minister Shinzo Abe has taken since winning election in December.