Forex Fundamental Analysis
Clearly, the Greek patient is ailing. Financial spin doctors in Germany and France seem certain that a further injection of cash will be needed to avoid a Greek default and behind the scenes discussions are going on at the European level to secure the required funds.
In return for the €110 billion bailout facility which was agreed in May 2010, the Greek authorities were required to cut €30 billion of expenditure over three years – naturally, biting austerity measures are hugely unpopular with the Greek people. However, the scope of the problem in Greece has turned out to be worse than originally thought (by a further 10.5% of GDP), as revealed in April of this year.
A look at each of the major currencies and a glimpse of what can be expected in the Forex markets in the coming week.
For a change, last week saw the world’s major stock exchanges close mixed, ending a general six week falling cycle. In Europe over the course of the week, the FTSE fell by 0.88%, closing at 5714.9; the Dax put on 1.3% to close at 7164.1; the CAC strengthened by 0.49% to end the session at 3823.7.
The US political elite has yet to agree to extend the nation’s borrowing ceiling. If they fail to come to an agreement before August the USA may default on some of its obligations.
India is the world’s most populace democracy and is an emerging, globally important economy. With a population of approximately 1.2 billion people, India represents an enormous potential market for the rest of the world which is likely to open up further as the nation becomes wealthier. India is already the third largest economy in Asia behind China and Japan.
Now the world’s second largest economy behind the USA, China is having to contend with (relatively) high inflation and a potential property bubble. Inflation figures released recently show that the consumer price index (CPI) measure stood at 5.5% in May. This is the highest value seen for CPI in the past 34 months.
Ratings agency Standards and Poor’s have poured more fuel on the sovereign debt crisis in Europe by a further downgrade of Greece’s credit rating. S and P has dropped Greece’s rating by a further three notches to CCC making it the worst credit “risk” of all of the world’s developed nations.
This Forex weekly snapshot gives our take on the majors. Get insights on USD, EUR, AUD, GBP and more from our expert traders before making your next trade.
Last week saw most of the world’s major stock exchanges again all close lower for the sixth week in a row; the Nikkei bucked the trend.
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