Before you know it, the Bank of Japan will be delivering their monetary policy announcement. Far less attention has been paid to the BoJ announcement than last’s ECB or RBNZ meetings and for good reason. For the past few years, the central bank has been more reactive than proactive and never one to opt for surprises. The following table shows how economic data has fared since the last meeting and its clearly been mixed. Given the lack of clarity on the state of the economy, there is very little reason for the central bank to act.

The Reserve Bank of Australia made it very clear last night that they do not plan to raise interest rates in the foreseeable future. Despite the rise in commodity prices, the RBA expressed little concern about inflation. As a result, the AUD/USD extended its losses as investors realized that unlike the ECB and other central banks who are just beginning their tightening cycles, the RBA is done.

The British economy continues to wrangle with very weak growth even as consumers are being hammered by surging prices. The result is an inflation rate double the target “ideal” of two percent annual inflation. And while the last few years have not been a walk in the park, there appears little prospect for immediate relief.

Now that the uncertainty that comes with the constant threat of defeat of the previous minority government has been set aside for at least the next four to five years, the Canadian dollar is quickly establishing itself as a top choice for investors. Canada has had a succession of minority governments over the past seven years but with the emergence of a Conservative majority government following Monday’s federal election, investors are expected to once again turn to Canada and the Canadian dollar as choice investment opportunities.

EUR/USD rallies in currency trading

The euro is heading higher in forex trading on the currency market today, gaining after pulling back some. EUR/USD is above 1.42 again, and going strong.

It’s deja vu all over again in the forex markets as another twist in the sovereign debt crisis has sent the euro tumbling by the greatest margin in nearly a year. It was only last month that I posted “The Euro (Still) has a Greek Problem,” and yet, forex markets are once again reacting to the possibility of a Greek default as thought it were a new development. At the very least, investors finally seem to be acknowledging the inevitable.

Greek news, economy sends mixed signals to greenback

The US dollar is mixed in forex trading on the currency market today as an interesting situation arises. On one hand, Greek officials are trying to make it clear that they are attempting to meet austerity goals.

Euro in forex trading

Euro is falling today, in spite of the general inclination toward risk appetite right now. The latest news out of the eurozone is providing disappointment, and that is sending the euro lower in forex trading.

There were no trades for me again this week, and I've actually decided to stop trading forex for the time being. (...)

Since Standard & Poor’s cut the ratings of 9 Eurozone countries, the euro has done nothing but rally. One of the main reasons why the EUR/USD has been so resilient is because the downgrades had very little impact on European bond yields. French and Spanish bond yields have increased but by less than a tenth of a percent while Italian bond yields decreased since the S&P announcement. The following table compares the 10 year bond yield and 5 year CDS spreads of key EZ nations today vs. before S&P’s announcement.