Euro Debt Concerns Heightens Due To Stressed Spain's Bank Industry

Wednesday, May 26, 2010

In late US session it was seen that the stocks rebounds benefits the Dollar to hit a high of 87.46. In may month there was a rise of 63.3 percent is seen in the Conference board consumer confidence data. It was highest since March and now reached above the expectations of 59.0. The fall of Euro currency becomes a worldwide threat as said by Bullard. He also mentioned confidently about the economic recovery will remain on track and rise in GDP growth will remain continue in the coming quarter and it leads to a full year growth in national income.

In yesterday's Forex session Global stocks tumbles down and there is rise seen in the USD currency and Japanese Yen. The fall of Global stock market is due to the Spain's banking concerns and Korean currency drop-down. The investors are so much worried about the Spain concerns since it may rise the debt crisis in European countries. The four Spanish bank had submitted a proposal to the Central Bank of Spain to merge their business. This causes the major European index to fall that is FTSE is down to 2.21 percent where as DAX falls to 2.34 low and CAC drops down to 2.9 percent.

Yesterday there was a great fall shown in the Asian stock market due to the Korean fall impacts. While the Dow and S&P shows a rise in the last session of forex to maintain its rebound after breaching to the low of Feb month. The Dow index again rebounds to reach above the 10000 at 10043 and is now just down to only 22.9 percent only from the past high. Dow may be rebounds to Feb's low until it touches a high of 12000.

There is a sharp fall is seen in the Dollar index yesterday that is USD unable to break through the 87 level and drops down. There was a recovery seen in the currency pair of EUR/USD and reaches to level of 1.2671 where as GBP/USD rises to 1.4527 high along with the recovery of AUD/USD to 0.8363 level. Crude oil tumbles further to the level below 67 while Gold remains steady at 1190 level in the Asian market. US equities open at low level to provide an additional support to the USD currency and Japanese Yen.

EUR/JPY pair reaches to a low level at 109.32 point in the Forex online market along with the currency pair AUD/JPY that dives to 72.04 low level but this does not impact on the major currency of Japan that is Yen. As we have seen that Japan's currency Yen is still in upward position in the market and may rise to high level in the coming Forex session. The currency pair NWZ/JPY again drops this week as compared to the last week's session. Where as there is some rise shown by the CAD/JPY to regain the past high of 94.46 level. But, it can be said that the currency pair remains bearish although the resistance holds at 85.86 level.

As the banking problem in Spain is the highest priority concern among the market investors because this will lead the European currency to wide spread in the Global economic market which impacts the economic recovery of the market. IMF warned the Spain's bank about the consolidations remains low then the Spanish banks have to get prepared otherwise the financial trouble will lead the bank into an intervention.

BOE policy makers specified the fact about the Japanese economy that it faced the same condition as the UK and US economy is facing today and it may lead to the recessionary condition due to the small policy making mistakes. But the Posen also specified that one major problem that was not faced by the Japan's economy in their recession time was that the poor demand of external prospects along with the productive resource reallocation need.

The euro zone countries again facing the same problem as faced by the last two weeks since the EUR/JPY currency pair falls to 109 level had confirmed the resume of downtrend. The upside break in the currency pair leads to the bullish convergence condition. Although we are expecting a strong support at the level below 2000 in the major currency pair of Japan.

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