Forex Fundamental Analysis

First and foremost Japanese consumer tends to tighten their wallets during time of uncertainty.

Britain is obviously not a member of the Eurozone. Sterling has just reached a 19 month high against the common European currency, touching 1.2222 before falling back

The Federal Reserve board has decided to maintain its near zero interest rate policy for the time being and has indicated that the policy is likely to remain in force for the foreseeable future.

Governments have always borrowed to fund longer-term projects, but what has changed with the advent of the financial crisis is that the magnitude and sustainability of such practices has been called into question, by the public, politicians and the rating agencies.

The ratings agencies have raised the spectre of default on sovereign debt by Greece, Portugal, Spain and Italy which has put substantial downward pressure on the Euro.

The initially big but now somewhat diluted news is that China announced resumption of the Yuan’s flexible arrangement by abandoning the outright peg to the USD.

Another surprising week that saw volatility in the markets, concerns about the future of BP in the light of a $20bn provision and the usual worries about sovereign debt, has come to an end.

Anybody who has even a passing knowledge of the “struggle” between the “worker” and the “capitalist bosses” can’t help to be convinced that their relationship and the balance of their rights works like a pendulum.

Fannie Mae and Freddie Mac were obliged to de-list on the New York Stock Exchange, yesterday, when their share values fell below the $1 mark.

Despite the fact that another ratings agency has downgraded Greek bonds to junk status, the Euro is having a bit of a rally and all of the world’s major exchanges have ended higher.

Mr Kan warned that the world’s second largest economy is at risk of collapse, because of its debt burden and requires financial restructuring to avoid a Greek-style crisis.

Some of the best opportunities in Forex often present themselves when markets become obsessed with one side of a cross, as seems to be the case with each side of the GBP/USD cross.

Last week was again seemingly a turbulent affair and the sovereign debt crisis seems set to run and run.

Amidst the turmoil of the sovereign debt crisis and the consequent uncertainty on European and global stock exchanges, it was quite unsurprising that both the European Central Bank (ECB) and the Bank of England have left interest rates at their historically low levels.

The unfettered power of the ratings agencies is likely to come in for further scrutiny after a report issued by ratings agency Fitch caused Sterling to fall by a full percentage point.