Daily-FX-Market

Forex news: The Eurogroup, the heads of the eurozone member states defined the size of its agreed financing package for Greece, committing to provide up to €30 billion in loans over the next year if requested by Greek authorities, with the IMF expected to contribute a further €15 billion for a total of about 20% of GDP in the first year.

As you all probably remember, at the end of March,  the Euro fell to a ten month low against the US Dollar, beacuse fears that a deal would not be reached were spreaded, after Germany indicated that Greece did not need assistance and a credit downgrade for Portugal. However a compromise was reached, with the International Monetary Fund contributing to the aid package.

The move followed Fitch’s downgrade of Greece’s sovereign rating to BBB- from BBB+ two days before, amid uncertain financing conditions and concerns of a rapidly weakening Greek banking system.

RGE views it likely the size of the package will calm rollover fears this year, although the medium-term outlook remains uncertain. Indeed, the Greek debt maturity profile foresees further large issuance in 2011 and beyond amid a deepening recession, which makes it imperative for Greece to meet the 2010 fiscal target with the help of the financial backstop and regain investors’ confidence.

Meanwhile, solvency concerns continue to simmer, and on the political front, the required unanimous vote by the Eurogroup to disburse the funds upon request might still pose some headaches

In the UK, government borrowing could be less than forecast this financial year after better than expected figures for February. The UK government borrowed £12.4bn in February, less than economists had expected, according to figures released by the National Statistics Office yesterday.

The figure for January was also revised sharply downwards, to £43m from £4.3bn. Borrowing in the current financial year has now reached £131.9bn, but analysts say the full-year total may be less than the government’s £178bn forecast. Until recently, most analysts thought the government’s borrowing forecast was too optimistic.

The borrowing figure for February was not as bad as some had feared, partly because of the rise in VAT at the beginning of this year and new taxes on bankers’ bonuses.

The government is also paying out slightly less in benefits because unemployment is falling. The figures will give a boost to Gordon Brown’s Labor government ahead of next Wednesday’s budget.

Sterling gained 1.1% on the US Dollar yesterday ending the forex ession at USD 1.5245. It rose 0.31% against the Euro closing trading at EUR 0.8931.

In Canada foreign investment rose more than expected in January to CAD 11.83bn (USD 11.71bn) from CAD 11.4bn in December. But the Canadian Dollar depreciated against its American counterpart for the first time in thirteen days as crude oil prices, the nation’s biggest export fell.

On Wednesday and early yesterday the Loonie traded within one cent parity with the US Dollar before dropping 0.23% from its opening to close the day at USD 1.0131.

However yesterday’s setback looks set to be temporary as the Canadian Dollar has gained 6% against the US Dollar over the past three months, in part because of the oil-rich nation’s plans to erase its budget deficit by 2015 and the prospects of a quick recovery that may prompt the Bank of Canada to raise interest rates.

Later today Canadian monthly retail sales figures as well as the consumer price index numbers are due to be released.

Finally in Europe Greek Prime Minister George Papendreou has given EU leaders a one week deadline to come up with a concrete rescue plan for Greece and he has challenged Germany to abandon its doubts about any such rescue package.

Papandreou said he may turn to the International Monetary Fund to overcome Greece’s debt crisis unless leaders agree to set up a lending facility at a summit due to be held on March 25th and 26th.

The IMF option has already been dismissed by European Central Bank President Jean-Claude Trichet and French President Nicolas Sarkozy, who say it would only demonstrate that the EU can’t solve its own crises.

Signs that the uncertainty in the Euro Zone is far from over caused the Euro to tumble 0.85% against the US Dollar yesterday; it closed trading at $1.3617. It slid against 15 of its 16 major peers this week and looks set to have made its biggest weekly loss since the start of February by close of trade today.

Later this morning the German Purchase Price index is due to be released. After an unexpectedly strong rise of 0.8% last month, double the expectations, it is expected to gain 0.1% this month.

Also this morning, President of the European Central Bank, Jean-Claude Trichet is addressing the European Commission in Brussels. His comments will be closely watched for any indications that European leaders are getting closer to a unified resolution on an assistance package for Greece.

What is Better for a Trader: Fundamental or Technical Approach?

Forex analysis is thought to be just one big, encompassing study. But, there are actually two major types of forex analysis: the fundamental and technical approaches. Both of them make use of particular factors that could affect the forex market. Those factors, however, differ in both forex analysis approaches.

Forex analysis: technical style

The technical style of forex analysis could be thought of as the traditional type. This has not been particularly dubbed as such. However, when investors think of analysis, they initially think of trends.

In technical forex analysis, the investor takes a look at past and current trends, differences between two currencies in a pair, forex charts, and other available information that directly relate to foreign exchange.
Forex analysis: fundamental style

The fundamental style of forex analysis goes further by looking at outside factors that could affect foreign exchange. In the fundamental approach, the investors takes a look at current conditions such as interest rates, political and economic statuses of involved countries, and bank interest rates.

The verdict on forex analysis

Forex analysis should not be limited. Instead, the investor should be free to combine the two approaches if needed. There are times when fundamental factors matter a lot.

For example, times of political instability and recession will affect foreign exchange decisions. Still, past trends can provide enlightenment to the foreign exchange market.