Forex Fundamental Analysis

The financial sector on either side of the Atlantic has been in the dock recently over a number of scandals that, had they happened in any other realm of business, would usually land the perpetrators in jail.

While not one of the more commonly quoted figures, the Tokyo Core CPI numbers are one of my favorites as it shows the price of goods and services that people in Tokyo deal with.

The USA is still the world’s largest economy and its fortunes have a knock-on effect in other economies around the world. Initial estimates (always subject to revision) of economic growth in the second quarter of 2012 suggested that the economy had grown at an annualised rate of 1.5%.

On Tuesday, the US Consumer Confidence numbers came out at 60.6, a far cry from the expected 65.8 level. With this being said, it does look like consumer confidence in the United States is waning, perhaps a sign of the anemic economy that seems to be lingering in that country.

On Friday, the US Core Durable Orders release for the month of July came up much lower than expected. The release was expected to be a print of 0.5% but came out as a weak print of -0.4%.

During the Thursday session the US Department of Labor released the weekly Unemployment Claims figure, disappointing the market with a higher than expected 372,000 new claimants for unemployment insurance during the previous week.

The crucial Federal Reserve meeting held yesterday saw members leaning towards the possibility of economic stimulus. The increase possibility of stimulus caused the USD to plummet against most major currencies this morning in Asian trading. Disappointing existing home sales numbers also pushed down the value of the greenback. The USD/CAD is down 0.27% and trading at 0.9888, while the EUR/USD is up 0.14% and trading at 1.2546.

Investors continue to brace themselves for today’s Federal Reserve meeting, which could have a profound impact on the short term future of the USD.

The Reserve Bank of Australia released its minutes of the August 7, 2012 meeting on Tuesday morning. This release was highly anticipated by Aussie traders as the minutes could perhaps give some insight as to which way the board may be leaning as far as monetary policy.

Major currencies started trading this week in a quiet calm manner, while the euro completed its high against the dollar and the yen right before European leaders’ meeting.

In New Zealand prices paid by the owners of farms, factories, and producers for goods and services were raised in its most narrow year, referencing a moderation of inflation.

Another day starts in the old continent that is still facing the repercussions the sovereign dept crises with hopes that the central banks around the world would take actions to contain the ongoing dilemma.

During the Tuesday session, the United States released Core Retail Sales on a month to month basis, as well as Retail Sales for the month of July. The US Senses Bureau announced the better than expected results at 8:30 AM New York time.

New Zealand offered up two headline numbers early this morning to give a peek into the mind of the average Kiwi consumer. The quarterly Core Retail Sales number came out at 0.9%, which was just slightly under the anticipated 1% reading.

On Friday, we saw the release of the employment numbers out of Ottawa, and they were most certainly a disappointment. The projected employment change for the previous month of July was expected to come at a positive 9,600 jobs, but was reported to be a loss of 30,400.