By Anton Eljwizat
Yesterday, Standard & Poor’s announced that their downgrading Japan’s credit ranking from AA- to AA, due to the sluggish economy that doesn’t seem to know how to address its sovereign debt of $11 trillion. This was the first time in nine years that S&P has cut Japan’s credit ranking.
The market, of course, had an immediate impact to this turn of events, and the Japanese yen instantly depreciated against all the major currencies, including a 100 pips fall against the U.S. dollar and the euro and the British pound. In the meantime since then, the yen has corrected come of its losses, but the Japanese currency is still trading at relatively low levels. It now seems that any further comment regarding the Japanese debts are likely to create similar responses in the market.
As for today, several significant economic releases are expected from around the globe. Here are the leading two:
• 10:30 GMT, Swiss KOF Economic Barometer
This is an index, which is designed to predict the direction of the economy over the next six months. The expectations are that the index result will be 2.09. However, if the end result will beat expectations, the CHF might strengthen as a result.
• 13:30 GMT, U.S. Advance Gross Domestic Product (GDP)
The GDP measures that change in the total value of all goods and services produced by the economy, and thus considered to be the primary gauge of the economy’s health. If the end result will reach projection to a 3.5% rise, the dollar might see a rising trend against its major currency rivals.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.
