Forex Fundamental Analysis

Recent events as well as economic data published lately all indicate that the Canadian Dollar (CAD) will be facing headwinds in the near future. We suggest exploring the idea of selling the CAD, especially against the USD and currencies highly-correlated to the USD (MXN for example).

The trade deficit (or surplus) is simply the difference between what a nation imports from other countries minus what it exports to the rest of the world.

With the exception of the Nasdaq, all of the major markets ended the week lower. The picture would have been gloomier still had markets not been buoyed by encouraging US trade deficit figures which were released toward the end of the week.

The Euro has been appreciating against the US Dollar, Sterling and, notably, the Yen since last August. To a large extent, this is an overdue correction of the depreciation that the currency suffered as the European sovereign debt crisis raged.

Ireland was forced to ask for an EU/IMF bailout package in November 2010, worth €85 billion when borrowing costs in the money market became prohibitive. At the heart of the Irish crisis was the bursting of a property bubble and the fallout from incautious loans made to property developers.

The West won the Cold War which raged for half a century between Communist standard bearer the USSR and the Western philosophy of Capitalism and democracy.

Over this past week, the common currency faltered from its recent uptrend despite some clear and welcome signs that the Eurozone’s economy is improving. Check out DailyForex.com's special piece on the Euro here.

In November of last year, the Bank of England (BOE) announced that in July of 2013, the current Governor of the Bank of Canada (Canada’s central bank) – Mark Carney will assume the position of Governor of the BOE and replace Mervyn King.

The role of a ratings agency is to make an honest assessment of the value of debt vehicles (e.g. bonds) such that investors can make an informed decision about the wisdom of backing it.

The wave of optimism has continued for another week with all of the major markets ending higher. The Dow Jones Industrial Average has hit its highest level for five years, breaching the 14000 point level for the first time since October 2007.

America didn’t really resolve its problems when it came to an overtime compromise to avoid the automatic tax increases and spending cuts which were due to come in on 1st January 2013.

Most analysts were anticipating that the world’s largest economy would produce growth of about 1.1% in the final quarter of 2012.

Data just released shows that the rate of expansion of the Indian economy is slowing. The GDP figure for the year ending in Q4 2011 came in at 6.1% compared to the same quarter twelve months earlier.

See last week's trading activities in perspective from this fundamental analysis by one of our experts at DailyForex.com!

The housing market is an indicator of a nation’s confidence. When people are worried about job security and their ability to pay a mortgage, the number of houses sold (and price) declines, with people needing a compelling reason to commit to a move.