Major Market Mover: Overall Picture…

Daily Forex Fundamentals | Written by Crown Forex | Aug 11 08 08:02 GMT |

Here we are starting a new week with the bulls dominating financial markets, as last week they conquered the movement of majors, taking the Euro and the British pound to dip down recording new lows. The outlook in those two major economies are getting gloomier, the Europeans are facing a threat of a contraction especially after markets saw the Italian GDP contracting 0.3% in the second quarter, as now expectations heads toward a contraction of 0.8% in Germany the leading economy in the Union. The severe fall in the Industrial production and the demand on the European goods along with high oil prices complicated the situation. If growth contracts, which I doubt my dear reader, the ECB would be facing a fear of stagflation; inflation is escalating higher with no signs that it would be easing any time soon even when the ECB hiked rates to 4.25% in July, besides the dropping growth levels due to the sliding confidence and the exports that got crippled badly in the previous period. This weeks EU calendar is full of inflationary, growth and the trade data, as it would clear up the picture more, though the fear between investors expecting the worse is what dominates markets, as I believe the Euro won't be strengthening any time soon as the clouds floating in the Unions sky's are not propagating of any good news. United Kingdom is falling too, fear of recession is increasing the housing slump diffused in the Royal had weighed strongly on the Britons, as they are unable to handle the situation with the flaming inflationary pressures. Whereas the Britons are waiting for some consumer prices, retail prices and the unemployment data, as expectations points out to a rise unemployment rate to 5.3%. Though the easing oil and depreciation of the major two currency would came as a survivor are the time being, or just to buy time for the ECB and the BOE to move fast to salvage their economy from an inescapable doom. If inflation eases till the end of the year the ECB won't consider a rate hike where they can head their attention now toward the upside risks to growth; as well as the Britons, they would ignore inflation and stick to the growth levels. As for the United States, the question still arousing in markets whether the effect of rebates creating a higher spending pattern between Americans would fade away in the last three months of the year. The Americans are still feeling the tension even when they had some extra cash given by the fiscal contribution; nevertheless rising unemployment and the endless layoffs are affecting consumer as they remain fearing that they would lose they jobs any time soon. SO lets just hope the bulls movement that controlled markets would ease, giving some space for the bears just to regain some of the losses that halted upon them last week. Crown Forex disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.