Forex Fundamental Analysis

With US Federal Reserve interest rates at a record low and the US economy seemingly robust compared to Japan and the Eurozone, the only thing that rates can do is to stay where they are or increase.

It says much about the anaemic state of global demand when you realize that manufacturing output in the Eurozone has seen 23 consecutive months of growth yet unemployment is still at 11.3% - although there has been a reduction.

The assessments of quarterly growth are always subject to revision since the estimate of GDP is based on a subset of the data.

It is always easy to be wise after the event. Bank regulators should have been more wary of the risks to the banking sector through dubious loans issued to sub-prime lenders and the folly of “securitising” such loans in blocks and believing that that would make an investment grade product.

Last week saw the final trading session for the week, the month and the quarter from the perspective of these summaries. Get the analysis for March 30, 2015 here.

It may be counter-intuitive to consumers, but economists and central bankers believe that a little inflation in an economy is a good thing.

The latest Markit composite Purchasing Managers’ Index (PMI) for the Eurozone suggests that business output in the 19 member bloc is growing at its fastest rate for almost four years.

The latest set of data from the UK’s Office for National Statistics shows that prices in February, as determined by the Consumer Price Index (CPI), have remained unchanged from where they stood twelve months previously.

Portugal was a victim of the European Sovereign debt crisis which saw yields for its 10-year bonds spike at 17.3%, an utterly unsustainable value.

The Bull Run that the US Dollar has been on of late has been fuelled by a number of factors

Legend has it that whilst the Eternal City burned, the Emperor Nero played his fiddle. This image has been passed down through the centuries as an icon of inaction at a time of crisis.

The Japanese economy grew more slowly in the fourth quarter of 2014 than initially thought. Initial readings put Q4 growth at 2.2%, however, this has been trimmed back to 1.5% on the strength of more comprehensive data (figures on an annualised basis).

Last week was almost a repeat performance of the week before for the major stock exchanges, with American markets continuing to fall from recent highs as Dollar strength worries gain impetus, Japan and Eurozone markets adding value and the FTSE dipping.

The creation of the Euro required that states joining the single currency had to have their economies broadly aligned before being able to become a member.

The Dow Jones Industrial Average fell by 1.85% on Tuesday, tumbling to a close of 17663 and returning the index to a lower value than it started the year on (17833 on 2/1/15).