Sixteen Nations Remain Strong Even after the Protracted Agony Faced

Daily Forex Fundamentals | Written by ecPulse.com | Jun 16 09 13:21 GMT |

Remarkable improvements, economies across the world managed to tackle the worst Credit Crisis since the Great Depression, which have destructed all sectors starting with the financial sectors ending labor sector. We lived through many changes in the preceding year; the sixteen nations had tripped from an expansion into a contraction and then continued the episode of contractions reaching to the deepest in the first three months at -2.5% on the quarter and -4.6% on the year. Neither policy makers nor citizens thought that this Crisis would result in pushing the sixteen nations into a deep contraction, at first policy makers used to say that it was only a trough of a normal business cycle. Nevertheless, as we moved through the year witnessing the changes that took place we can understand the spillover from the United States dilemma resulted in destructing the foundations built by the European commission and the European Central Bank. Therefore, reforms are taking place and demands of violating the capital markets took place. Where now policy makers are asking for a stress test to all the large banks, this test will clarify whether financial institutions in the European continent are resilient to any further downturns, which might take place in the upcoming period; especially we are not sure that the Crisis had reached to an end. However, we can't deny an important fact that the European Central Bank did a great job in containing the endless spillover, Trichet had taken decisions slowly not rushing into any actions until he was sure that this would effect his economies. Compared with other central banks we can see that the euro area interest rates considered the highest at 1.0% where the United Kingdom took their benchmark down to 0.50% and the United States reaching to a range of 0.0-0.25%. The efficient use of instruments by the ECB along with the revived activity in the world had managed to shore up the endless deterioration in sixteen nations, where according to fundamentals we can say that they reached a bottom in the first three months of the year. Moreover, the bank had approved the use of 60 billion euro's in order to purchase long-term debts, as this action used directly toward injecting more liquidity in financial markets. The German ZEW Survey improved significantly in the sixteen nations, the ZEW Economic sentiment inclined in June to 42.7 levels from the previous 28.5 levels, followed later on by the German ZEW reading. The Economic Sentiment improved to 44.8 levels from the previous 31.1, even the current situation, which used to move in the opposite direction of others inched higher to -89.7 levels from the previous -92.8. Despite the seen improvement, the International Monetary Fund said that the Credit Crisis would extend to the upcoming year, as another downturn will be seen if economies and financial sector did not pick up pace. Even with all those improvements, the sixteen nations will remain under stress of contractions this year and the upcoming year, especially now economies are struggling with elevated Unemployment rates reaching 9.2%. Ecpulse disclaimer: The content of ecPulse.com and any page in the website contain information for investors/traders and is not a recommendation to buy or sell currencies, stocks, gold, silver & energies, nor an offer to buy or sell currencies, stocks, gold, silver & energies. The information provided reflects the writers' opinions that deemed reliable but is not guaranteed as to accuracy or completeness. ecPulse is not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trades currencies, stocks, 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, stocks gold, silver &energies presented should be considered speculative with a high degree of volatility and risk