Forex Fundamental Analysis

Japan is still the world’s third largest economy and its strength has been due to its exports to the rest of the world. A nation’s balance of trade is simply the difference in value between what it exports and what it imports; so Japan has historically enjoyed a very healthy balance of trade.

The concept of throwing Greece to the wolves and allowing it to endure a disorderly default preparatory to being slung out of the Euro was undoubtedly popular in certain quarters, but it was never going to happen.

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

The health of an economy is usually measured at quarterly intervals and expressed as a quarterly (or full-year) projection of gross domestic product (GDP). A positive figure indicates growth whereas a negative figure tells us that the country’s economy is contracting.

The UK government opted not to join the single currency adventure with its European partners and so it is insulated, to a first approximation, from the sovereign debt crisis in the Eurozone.

Japan remains the world’s third largest economy despite natural disaster, a high Yen and economic woes such as deflation; enormous public debt; (relatively) high unemployment (in Japanese terms); aging population with concomitant, rising social security costs; and falling demand in key export markets.

Last week, Greece’s government failed to agree on pension reforms required by the EU/IMF as conditional upon granting a fresh €130 billion bailout package.

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

The Greek Prime Minister, Lucas Papademos, has failed to secure the support of the leaders of other political parties in the Greek coalition government for austerity measures attached to a second EU/IMF bailout package which is needed to prevent Greece from a disorderly default on its debts.

The sovereign debt crisis is a high stakes game for the Eurozone. Failure to find a credible way out of the morass could scupper what confidence remains in the Euro leading, in the worst case scenario, to a break-up of the currency bloc.

According to the International Monetary fund (IMF), China is expected to return full-year growth figures of 8.2% for 2012. However, if the Eurozone is plunged into a sharp recession, the IMF cautions that growth could be slashed to 4.2%.

Economics is a cyclical beast, spinning between periods of boom and bust. The magic of it is that nobody ever really knows when one cycle will end and another start; nor how strong the growth or contraction will be.

Last week was a good week for the world’s major stock exchanges with only the Nikkei failing to put on significant value. Get the full market recap here.

Most analysts are expecting a painful year in 2012 with some nations returning to recession; hopefully only briefly.

Behind the figures of sagging demand, anaemic growth and austerity cuts, the lives of real people take a buffeting in these strained economic times.