BEST-FX-4U

Breath easy - Its bearable hit by Spain to EURO

Over the weekend the Bank of Spain intervened along with four other Spanish banks bailed out Cajasur to consolidate with the fifth largest group of the nation. These banks composedly submitted a proposal to Central bank of Spain to merge their business with them.

This news leads the EURO currency in low phase after going to a high of 1.25 in the past week. IMF had given a report on Spain yesterday for telling about the weak points. The report clarifies about the debt condition of Spain along with the productivity growth, huge private sector and weak competitiveness.

Forex market risk aversion is eventually trying to collect the momentum in bulk yesterday with the threat of Spain banking concerns along with the embedded impact of financial crisis problem of euro zone member countries. Investors are much worried after the fall of Korean currency drops against Dollar.

This impacts the Asian stock market to drop-down after the USD/KRW reaches below 1200 points for the first time after 2008 low. In today’s Forex market fall is shown in Japanese Nikkie that falls to 3.06 points and Asia Pacific Index reaches to 3 percent low.

Crude oil breaches to 69 level where as an upgrade is seen in the USD index of 86.8 point. Instead of this Japanese Yen seems to be strongest currency than Dollar even though currency pair USD/JPY falls below the 90 level.

It was anticipated in the market that if the sentiments remains worse for the coming days for the EURO currency then it can be a benefit for the USD and Yen as they reach to a high level against all the major currencies of the Forex market.

Overall it is said by observing the current situation of the market that the main focus of the Forex market is captured totally by the Spain banking concerns. Lets see what will be the next step that can be taken in the market for controlling the worsen situation of EURO currency.

Dollar goes up against Euro and pound but falls against Yen

Dollar puts in its best performance in more than three and a half years, as U.S dollar rose today against the Euro and Great Britain pound . The reason was the speculation that financial crisis in Euro zone will lead to long term U.S financial assets. The Euro fells below $1.43 first time since early September.

The overall improvement in the U.S economy has helped the dollar to grow in recent days. The U.S Federal Reserve has decided to cut down emergency lending and hopes for the U.S recovery. All these reasons helped the investors buying back the dollar and gaining the profit on core trades.

On the other hand there is concern for U.S as U.S currency dropped against the Japanese currency Yen due to unreliable assumption and reports on recovery of U.S economy .The Dollar drops down to 92.75 Yen in Tokyo from 93.21 in New York.
Nikkei newspaper report supported the Yen that the bank of Japan will think on revising its consumer prices forecast for the year from April 2011 from an annual drop of 0.2 percent to zero. Investors are buying Yen at the cheap rate causing the trouble for U.S dollar.

Some of the investors believe that the real reason for the rise of U.S dollar is not that dollar is strong but euro and sterling suddenly look more fragile than the greenback. The euro zone is going through recession and it will take hard to come out of it. Apart from it U.S is trying to improve its economic condition and putting their best efforts in making USD the best performing currency. But the current situation is not in favor of USD as it falls down today against EURO and this benefits the EURO. Since from past 24 hours the EURO is the best performing currency of the Forex online market. This is the good news for the investors whose sentiments are still with the EURO currency and hoping for the best of EURO.