Vantage FX provides a daily overview of the news activity and announcements currently shaping currency movements across the world. Jay Mawji, the company's head of market analysis, takes a look at news around the global economy on 5th December 2011.
"The Eurozone has dominated the financial media and the global economy for much of the recent past, with today being no different. Once again Angela Merkel and Nikolas Sarkozy have been in the headlines, announcing an agreement to form a new treaty in the Eurozone to prevent a new crisis developing; albeit before the current crisis is anywhere near solved. Some will view this as a 'media manoeuvre' to settle nerves as the current crisis appears to be drifting out of control.
Perhaps creeping under the radar are the rising tensions in Iran; with UK-Iranian relations straining after the British Embassy in Iran was invaded and the UK responding by sending all Iranian officials home. Of course, this isn't the time for political squabbles but Tehran hasn't taken lightly to the recent sanctions placed on them for their alleged involvement in nuclear programmes. What may not be appreciated as of yet, is Iran's influence in the production of Oil. Iran has made it clear that if sanctions continue, the inevitable impact will be the rising price of oil. Analysts have suggested that the price of oil could continue to rise, which could create upward pressure on inflation across the global economy. An Iranian official claims that the price of oil could reach $250 a barrel; whilst that may not be completely accurate, there is no doubt a rise in the price of oil will go some way to holding back prospects of growth.
The Bank of England meet again this week. On Thursday the MPC will make a decision on interest rates and Quantitative Easing. Whilst rates are likely to be kept on hold (unless there is a pleasant surprise in store!), there is a distinct possibility that further Quantitative Easing will be discussed and potentially introduced in February 2012 when the current bout of Easing comes to an end. With Sir Mervyn King playing down the medium term prospect of inflation, but clearly stressing the dangers of a second recession, it is likely that Quantitative Easing could be further engaged to prevent a 'worst case scenario' for the UK economy.
Could oil be the next 'golden haven' currently trading at just above 101.70"
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Vantage FX UK is a currency trading broker based in the City of London, providing foreign exchange trading services to clients in the UK, the EU and the rest of the world.
What sets Vantage FX apart is its wide range of services and outstanding level of customer support. The company strives to provide an intuitive, interactive Forex experience by continually innovating and taking advantage of the latest trading technology, such as MetaTrader 4 and Expert Advisors.
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