The following are the most recent pieces of Forex fundamental analysis from around the world. The Forex fundamental analysis below covers the various currencies on the market and the most recent events, announcements, and global developments that affect the Forex market.
Forex Fundamental Analysis
Forex Fundamental Analysis
In the last quarter of 2009, Wall Street bank JP Morgan Chase made a profit of $3.3bn, turning in an annual profit of $11.7bn – almost $250m per week. The bank did get financial help from the US Treasury to the tune of $25bn under the Troubled Assets Relief Program (TARP), but this was repaid in June 2009.
Most analysts believe that the global recovery will be a fragile beast, so it is unsurprising that the European Central Bank has decided to maintain interest rates at 1%. The move was widely expected; indeed most people expect the policy to be maintained well into the year.
Stocks finished last week on a sour note as both the European and U.S sessions ended Friday considerably lower. On Wall Street, the DJIA tumbled just over 100 pts to 10,609.65 on worse than expected earnings from JP Morgan and Alcoa.
With the exception of the Nikkei, all of the major stock markets retreated somewhat over the course of last week. In Europe, the FTSE fell by 1.4%, closing at 5455.3; the CAC dropped by almost 2.25% closing at 3959.4; the Dax shed 2.7%, ending the week at 5876.0.
According to the National Institute of Economic and Social Research (NIESR), the UK economy will return to growth in Q4 of 2009 when figures are finally released. The official figures are due to be released on the 26th of January, but NIESR, a think tank, has predicted that the UK will post growth of 0.3%.
In the overnight Session, the NIKKEI advanced 172.65 points or 1.61%, pairing losses from the day before which came on the back of the PBOC monetary tightening policies. On Wall Street the DJIA was up smartly to 10,680.77, picking up 53.5 points and making a new high for year. The European session saw modest gains across the board as well.
The US trade deficit has long been a source of worry to legislators in the world’s largest economy. Data just released for November will have given them further reason for angst. The fledgling US recovery has stimulated demand for exported goods within the American economy at a time when US exports are still weak. The imbalance has led to a significant widening of the trade gap, by almost 10% in November, to over $36bn.
Many people think that China will soon overtake Japan as the world’s second largest economy – particularly in view of the plight that Japan finds itself in currently with deflationary pressure; record unemployment; poor consumer confidence and an unrealistically strong currency.
Analysts had expected to see a continuing improvement in the US job market after revised data for November turned an 11000 job loss into a 4000 job gain, but the most recent figures showed that the US had shed another 85000 jobs in December with the national rate of unemployment staying obstinately around the 10% level. The vast majority of these losses were drawn from the beleaguered construction (53000) and manufacturing sectors (27000) sectors.
The Greenback continued to show signs of weakening yesterday as the DXY closed just above 77. All majors gained on the Dollar with the exception of the Loonie. The NOK picked up 1.03% from Friday's close. The EUR hit an intra-day high of 1.4557 before retreating. On the back of Dollar weakness Gold jumped up another $13.60 to close at 1,151.85. Oil was essentially flat on the day giving up 23 cents to $82.52 a barrel.
Last week saw the year off to a good start with all of the major stock markets closing higher. In Europe, the FTSE made almost 2.5% in the first full week of trading of 2010, closing at 5534.2; the CAC made 2.8% closing at 4045.1; the Dax put on 1.4%, ending the week at 6037.6.
After a stunning blow to dollar longs, one has to wonder if last Fridays dismal NFP report will continue next month, or if it is just a hiccup in the US recovery. At the start of today's Asian Session the dollar strengthened, but as of now has reversed those gains.
Global Equity Markets finished last week on an upbeat note. On Wall Street, the DJIA gained for a third straight session to close at a high of 10,618.20. In the overnight session, Asia advanced on better than expected Import/Export figures from China, signaling a continue confirmation of a pending global recovery.
Seasoned Japanese Financial minister Hiroshisa Fujii has had to step down from his post due to problems of ill health. The 77 year old tended his resignation to Prime Minister, Yukio Hatayama, who had little option, in the circumstances, but to accept it with reluctance.
One of the most spectacular casualties of the global economic was the state of Iceland. When the Icelandic banks failed, the government was forced to step in and the credit rating of the nation was reduced to “Junk” status by Fitch Ratings, meaning that the country had to pay higher interest rates to investors to attract finances and that the investors could not be certain that their funds were safe.