Forex Fundamental Analysis

The stability of the Australian Dollar and the opportunity to gain reasonable returns on money on deposit has led to the currency becoming regarded as a safe haven.

Early in 2011, the British Pound started a nice rally. Unfortunately, this is not evident from the behavior during the past few weeks.

The cost to the Irish government of accepting the EU/IMF bailout was that it lost its mandate.

As financial markets come to terms with the Japanese natural disaster, markets have regained much of the ground lost the previous week. All of the markets closed higher.

The International Monetary Fund has expressed confidence that Japan will be able to recover from the disaster without requiring external help. The Japanese government has tentatively put the costs of the reconstruction programme at $309 billion.

The development in Portugal makes it more likely that the country will become the third Eurozone member to require EU/IMF funding – a situation which was strenuously denied by the government until recently.

Figures just released in the UK show that the Consumer Price Index (CPI) has risen by 0.4% above the January figure to stand at 4.4%.

Figures just released show that the average US house price declined by 5.2% in February; taking the average house price to the lowest value it has seen in nine years.

In the aftermath of the Japanese earthquake, tsunami and ensuing nuclear power plant crisis, last week was a turbulent affair on the world's stock and currency markets. Not surprisingly, all the world's major markets closed lower.

The Yen has appreciated to a post World War II high of 76.25 against the Dollar before relaxing back as investors speculated that the Yen would continue to rise.

The value of the Yen has risen on foreign exchange markets. Whilst this appreciation runs counter to all the insights of fundamental analysis, it has been attributed to the "repatriation" of funds from abroad.

Hard on the heels of the worst two-day loss that the Nikkei has seen in 40 years, the Nikkei 225 managed to recoup some of its losses yesterday, closing 5.7% higher.

Japan is still in the critical phase of the tragedy which struck on Friday when an earthquake off the Japanese coast triggered a tsunami.

The devastating earthquake and tsunami that struck Japan on Friday afternoon occurred too late to produce a very strong influence on the markets, but it is already feeding into this week's figures.

Despite significant speculation that rising inflation, buoyed by higher fuel costs, would force the Bank of England’s Monetary Policy Committee (MPC) to increase the bank's lending rate, the decision has been taken to leave the main rate at 0.5%.