Forex Fundamental Analysis

The Dollar gained a little ground today as it advanced versus its G-10 rivals. DXY support at 74.90 held firmly again today as the index gained before closing at the 75.303 handle. The EUR was pushed lower as ECB President, Trichett applauded the Fed's Ben Bernanke's strong Dollar comments made day prior.

US President Barack Obama has met with the Chinese minister, Wen Jiabao in Beijing. Jiabao is the third most senior Chinese leader and is responsible for the Chinese economy. Whilst the two nations are agreed to work together on resolving tensions over North Korea’s nuclear ambitions and on climate change, no such breakthrough was immediately apparent with regard to trade.

Gold challenged the 1144 region but fell back almost couple of percent to around 1127 from its best levels but is still trading higher than last week when the EUR was pushing 1.5050, currently 1138 and 1.4840, respectively.

The DJIA completed the Global Equity Market rally today currently ahead 140 points to 10,410. The rally during the Asian and London session got underway as the Asia Pacific Economic Cooperation group universally agreed to maintain and support whatever measures are necessary to put the global economy back on track.

Gold hit a new high again today (yawn) and given the lack of follow-through in other markets to support the main theory that higher gold will drive the USD lower, we are becoming very wary of a breakout in the USD.

Traditionally, the US Federal Reserve doesn’t often comment on the value of the US currency abroad.

The Dollar ended the week mixed across the G-10 with commodity currencies advancing while the remaining G-10 currencies suffered minor losses. Global Equity Markets finished the week in positive territory although Futures are pointing towards a slightly lower open.

Last week was a second straight good one for the world’s major stock markets with all indices gaining ground over the course of the week, except for the Nikkei. In Europe, the FTSE put on almost 3% of its value, closing at 296.4; the CAC was up by 2.66%, closing at 3806.0; the Dax closed up by 3.6% at 5686.8.

Last week we touched on the theme of possible CNY revaluation, or de-pegging, as some might say.

The dollar finished, an otherwise strong week, by declining against most of the other major currencies on Friday after the disappointing releases of a widening US Trade deficit and falling US consumer sentiment figures.

The world is being led out of recession by Asian nations, according to regional leaders meeting at the Asia-Pacific Economic Co-operation organisation APEC.

Global Equity Markets advanced again on Wednesday. In the U.S the DJIA closed up 44.29 points to 10,291.26 in lighter than normal volume due to the Holiday. The Dollar strengthened later in the day after the DXY briefly touched below 75.00 The Sterling came in as the big loser giving up 1.05% to trade at 1.6570, while the CAD advanced again today up nearly .4% to 1.0450.

The European Union is composed of 27 sovereign member states – in essence the EU is a sort of club. Like any club, the EU has its own rules which govern the conduct of its members; but when your membership is drawn from nation states, it is not always easy for the club secretary to get them to fall into line!

At the end of today’s trading we note the following directional price changes since last night’s NY close:

Early this morning, UK economic data releases were the significant events with a 20,000 rise in jobless claims pushing the UK unemployment rate towards a 12 year high of 5.1%.