Forex Fundamental Analysis

The world’s major markets were trading higher last week. In Europe over the course of the week, the FTSE was up on last week’s close by 3%, it closed at 6909.4; the Dax ended at 10627, up by 3.4% on last week’s close; the CAC was up by 3.6% to end the session at 4488.7.

The UK is gripped by a phoney war over the decision to leave the EU.

The Bank of Japan has left interest rates unchanged at its most recent meeting, but has made some changes to its stimulus programme which are designed to hold the yield on government 10-year bonds at zero.

The Irish and Spanish financial crises that roiled Europe during the Global Financial Crisis both had their origins in an overheated property and construction section that left banks with huge loans on their books which could not be repaid when the sector was hit by the crisis.

The big day is finally here: within a few hours, we will all know whether the Federal Reserve is raising interest rates this month of September. It has been the major topic of fundamental debate in the Forex market for quite some time now.

Brexit means Brexit, but the devil is always going to be in the details. All you can say for sure is that the UK’s “simple” in/out referendum on continued membership of the EU was anything but and has left the nation and its politicians divided.

There were many, frankly ignorant, voices in the UK that claimed that the EU needed the UK far more than the UK needed the EU in the run-up to the referendum (and since).

The Italians will be asked to decide on constitutional reforms in a referendum to be held before the end of the year.

The world’s major markets all closed lower last week with the one exception of the Nikkei.

The recent developments across global markets have market participants wondering what is going on in the currency markets. Market participants should be worried about what the Central Bank of England is aiming to do with its current monetary policies.

The European nation that finds itself in the greatest danger from an imminent loss of access to the EU’s single market is not the UK, but Switzerland.

Mark Carney, Governor of the Bank of England, seems to be about the only person in the UK who had a contingency plan up his sleeve for the totally unexpected decision taken in the referendum to leave the EU.

Without any doubt, the decision of the (slim) majority of the British electorate to leave the EU in June’s referendum will go down in the annals of economic history as one of the most foolish decisions ever taken.

The Federal Reserve is keen to continue the process of normalising interest rates to give themselves room for manoeuvre when the next recessionary wave strikes (as it must).

The world’s major markets all closed higher last week. In Europe over the course of the week, the FTSE was up on last week’s close by 0.83%, it closed at 6894.6; the Dax ended at 10684, up by 0.91% on last week’s close; the CAC was up by 2.3% to end the session at 4542.2.