Forex Fundamental Analysis

A sudden and dramatic loss of confidence in financial institutions on the back of some extraordinary “sub-prime” lending decisions was what triggered the worst global recession since the Great Depression.

For the first time in a year, the Dow Jones Industrial Average has closed above the 10000 point level. It actually closed at 10015.86 which was its best level since last October.

Although the Japan was amongst the first to emerge from recession, things are still far from perfect in the world’s second largest economy.

Let’s start with the good news; the FTSE in London closed at its highest level for more than a year.

Last week was a much better one for the world’s major stock markets with all indices recovering ground over the course of the week. In Europe, the FTSE was up by 3.47%, closing above the psychologically important 5000 point barrier at 5161.9; the CAC put on a healthy 4.1%, closing at 3799.61; the Dax closed up by an impressive 4.46% at 5711.88.

It was inevitable that a time of reckoning would come when the costs of the financial support packages and stimulus measures would need to be calculated by the US Congress. With loss of tax revenues from those who had been made unemployed by the global recession, payment of higher unemployment benefits and people tightening their belts to be factored in as well, it was little surprise that the deficit broke all records

Gold rose to new record levels yesterday, touching $1043.77 before closing at $1017.65 in London last night according to data from the Financial Times. The strength of gold is due to a number of factors acting in concert.

Data released yesterday from the Institute for Supply Management for September limped in at 52.6, down by 0.3 on the figure for August.

The International Monetary Fund (IMF) has revised its forecast for the cost to the banking sector, stemming from the global economic crisis.

The Chairman of the Federal Reserve has been stating his view that the US economic recovery is underway for some time now.

Figures released yesterday, show that Japan is in a deflationary phase. For the sixth consecutive month, consumer prices have fallen in the world’s second largest economy.

Economic parameters vary with great speed over the course of a trading day. For this reason, it is useful to look at data over a slightly longer term to gain an insight into any trends that might be emerging which can be exploited for your investment strategy.

Japan recently joined the post recession club with the likes of France, Germany and New Zealand. Yet, figures just released for Japanese exports in August showed that they were down by 36% on the previous year’s level.