Forex Fundamental Analysis

Hard on the heels of the US Federal Reserve’s announcement that it was implementing a third round of quantitative easing and the European Central Bank’s pledge to support the bonds of Eurozone states in receipt of an EU/IMF bailout should borrowing costs become unrealistic, the Bank of Japan has announced further measures it will take to stimulate the Japanese economy.

The UK has the largest European economy outside of the 17 member Eurozone bloc. It is also the largest financial hub within the EU. Clearly, any meaningful changes to the way that the European financial sector is supervised and regulated would have to have the blessing of the UK.

The sovereign debt crisis was sparked by a loss of investor confidence in Greece’s ability to honour its obligations. Ultimately, of course, this lead to two bailout packages from the EU/IMF for Greece.

Check out how the currencies and commodities did this past week with this analysis from a fundamental perspective.

It has been on the cards for a while, but the Federal Reserve announced, yesterday, that it would embark on third round of quantitative easing.

Germany is the major economic force in the Eurozone and the wider European Union which means that it pays more into EU institutions than smaller economies.

The balance of payments for a nation is simply the difference between the costs of the goods and services it exports minus what it imports from other nations.

Just last Thursday, the European Central Bank outlined plans to buy sovereign debt (bonds) from EU member states that were being forced to pay unsustainable and, in the bank’s opinion, unrealistic interest rates to finance their borrowing requirements from the market.

See last week's trading activities and updates from the fundamental perspective of our expert analyst.

As we mentioned yesterday, the European Central Bank (ECB) held a key meeting on Thursday at which Mario Draghi outlined the banks plans to attempt to draw a line under the Euro zone crisis.

The precious metal gold has long been seen as a traditional safe-haven asset in turbulent times. The value of gold has hit a six-month high of $1698 per ounce.

The Bank of Canada kept its overnight rate at 1% during the Wednesday session as the market expected. However, there are hints and language that suggests that the BoC is still leaning towards possible rate increases in the future.

Australia is a major exporter of raw materials to the rest of the world. However, as demand for finished products around the world slows, there is a knock-on effect on the requirements for raw materials, of course.

The role of a ratings agency is to provide investors with an impartial evaluation of the risks associated with a given debt vehicle, be it a commercial or a sovereign bond.

See how the currencies and commodities did last week with this fundamental analysis.