The Euro did start the week off lower with yet another downgrade of Italy by the S&P rating agency.By now the PIIGS (Portugal,Ireland,Italy,Greece and Spain) have all been down graded and are compounding towards the Euro down fall especially against the USD. The dollar is now becoming a more attractive looking currency as a safe heaven after the Franc pegged itself to the Euro and Greece looking more and more imminent towards a default.Just seen a feature on CNN talking about an increase in suicides and depression by up to 40% this year in Greece compared to the first six months of last year with an unemployment rate of 16% with 30% being the youth.Well in Kenya with a S&P rating of B+(an upgrade mind you) unemployment rate of more than 40% and 60% or more being the youth,we should have reduced our population drastically by now. Not to mention that we are the biggest economy this side of the Sahara.I cannot begin to imagine the rescue package that is needed to begin saving our economy forget about the price controls and alcohol laws.
Tomorrows meeting may make or break the Dollar further with some analysts hoping for a QE3 of some sought but most believe that the Feds will only twist the balance sheet a little to avoid making any serious policy announcements that may exacerbate the global economic problems.
There was a minor correction back to the 38.2% fib level last week and seems to be stalling temporarily.I will be on the sidelines until i get a clear signal on the fundamentals on most of this pairs as this meeting seems to be the highlight of the month. Most pairs will really be affected by its outcome especially the commodity currencies the CAD,AUD which rely heavily on the USD when trading and the US economy.
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