Forex Fundamental Analysis

With the exception of the Cac, all of the world’s major exchanges ended the week higher. See how the currencies and commodities did with this Forex Fundamental analysis here.

The political right has doggedly stuck to its belief that “market forces” must be allowed free reign in almost every aspect of life, despite evidence in specific areas that the philosophy clearly does not work.

Italians went to the polls on Sunday and yesterday to elect a new government after support from Mario Monti’s (unelected) technocrat administration was withdrawn by former PM Silvio Berlusconi’s party.

On Friday, Moody’s rating agency downgraded the UK’s credit rating from the coveted AAA to AA1, down one notch. The move came as no big surprise to anybody who follows economic news since the ratings agencies had put the UK rating on a “negative outlook” some months ago.

Last week marked the final trading session of February from the perspective of these summaries. With the exception of the Nasdaq, all of the world’s major exchanges ended the week higher.

Quantitative easing is the name given to ambitious programmes, run by several central banks, which aim to boost liquidity through the purchase of (mainly) government bonds.

The world’s media were focussed on the potential ramifications of the US economy falling over the “Fiscal Cliff” at the turn of the year, It was feared that unless a deal could be struck between Obama’s Democrats and the Republicans that the mix of automatic, mandated tax increases and spending cuts, agreed during the 2010 fiscal impasse, would send the economy into a fresh recession.

In recent months we have seen a lot of chatter and headlines regarding oil shale. In this writeup we will explain what shale oil is and connect it to the Forex world. Specifically, we will discuss the connection between shale oil and the USD.

The German economy contracted in the final quarter of 2012 by 0.6%, raising fears that the leading Eurozone economy could be heading for recession. Whilst the Eurozone as a whole has been experiencing a recession, Germany has so far avoided it and, indeed, posted full year growth of 0.7%.

Japan has been in recession for the past three quarters and continues to suffer from price deflation despite a long-term near zero interest rate policy and numerous financial stimulus packages put forth by its government and the Bank of Japan.

Last week was a mixed affair for the world’s leading stock exchanges, but most ended lower. Check out the fundamental analysis for last week's markets here.

Figures just released show that the world’s third largest economy, Japan, contracted in the final quarter of 2012 by 0.1%. This is the third successive quarter of contraction, meaning that the nation continues to be in recession.

The European debt crisis of the past two years has now been relegated off market headlines as a result of policies being implemented by European political and economic leaders. Check out the review of the EU here.

By their very nature, quarterly growth figures are a backwards-looking index as to how an economy is faring since they can only be determined on historic data.

The new Japanese government has made it clear that they wish to see the Yen depreciate against major currencies in order to help boost the nation’s exports by making them more competitive.