BROKER ZOOM ANALYSIS
|
ONLINE FOREX TRADING
The forex or Foreign Exchange is a financial market place where you speculate on changes in exchange rates of foreign currencies such as the euro, the dollar or Yen.
FINANCE BUSINESS NEWS
The message that the G7 was trying to get across to traders and other financial gurus of the world last month is beginning to make sense and sink in. What was the message? “There have been at times sharp fluctuations in major currencies, and we are concerned about their possible implications for economic and financial stability. We continue to monitor exchange markets closely, and cooperate as appropriate.” In other words, while all of Europe is reeling in the fact that the US Dollar is giving the Euro a bit of a boost, traders and financiers alike need to remain vigilant because things can easily change.
Luxembourg Finance Minister Jean-Claude Juncker stated to reporters that, “Financial markets didn’t correctly understand the message from the G7. “I have the impression that more financial markets have a better understanding. I would encourage them to stay on track.” Juncker is the chair of the finance ministers from the fifteen nations that currently recognize the Euro as their currency. He realizes that things could change all too quickly if there was a sudden upswing in the dollar and that things need to move a slower pace to make sure other economies do not see the same financial slump as the United States.
The dollar has fallen yet again and with the newly released data on the economy’s strength, doubt has been raised over whether or not the Federal Reserve will be able to bring the interest rates back up later in the year. Of course, in Germany, the Euro got a nice boost thanks to producer prices hitting a three week high. Boris Scholossberg, who is the senior currency strategist at DailyFX.com, believes that the inflationary pressures in Europe are helping to keep the Euro up.
He went to also note that a weak 0.2 percent rise in American producer prices has also caused concern. The United States consumer market is currently sitting the lowest ever since 1980, the last time the country was in a recession. “This is really bothering the market, because last week people thought Fed easing was over and the economy had stabilized, but the numbers lately are causing doubt,” Schlossberg said.
While the interest rates in the United States seem to be helping the flagging American economy, the situation is more complicated than it seems. This is due in part to core producer prices rising more than 0.4 %. These prices do not include food and energy figures. “Nothing here to give the Fed a peaceful night’s sleep, even allowing for the better-than-expected headline for finished goods that was helped by a fall in gasoline prices,” stated Alan Ruskin who is the chief international strategist at RBS Greenwich Capital in Greenwich, Connecticut.
While Schlossberg stated that Wednesday’s Ifo survey of the German business market could push the Euro to a high of $1.60, the slower euro-zone growth is making it uncertain how markets are going to fare when the bank’s make their next move. Some people do not agree, however, and feel that the healthy first quarter growth in the euro zone will not add to the confusion of the rising and falling economic conditions.
The currency markets related to the bank of Japan has managed to keep their borrowing costs to 0.50% as was expected and the Australian dollar hit their highest number - $0.9617 – in 24 years. This was announced shortly after the central bank’s policy meeting told everyone that they had been discussing raising interest rates which may indicate that a future hike may be in store. There is still no word on how the Federal Reserve will take the new data or whether or not they will officially announce an American recession, something the American people are already accepting.