Forex Gump

Remember last week when I told you that China is the world’s third largest economy? Well, scratch that. A report just released today showed that China grew 10.7% during the final quarter of 2009, overtaking Japan as the second largest economy on the planet.

By now, I guess you’re probably tired of hearing me talk about the UK as the only major economy stuck in recession. So let’s take a look at the possibility of stagflation, another problem that’s lurking around the corner for the British economy.

A year ago, the ECB’s concern was simple: economic recovery. The year 2009 proved to be relatively good, as the euro zone was able to finally climb out of recession and post some optimistic economic data here and there. All good, right?

Ugh! Did you see that recent report on US retail sales for December? It was terrible! Apparently, sales at the retail level fell 0.3% instead of growing 0.4% like initially expected.

Who cares about inflation? Hardly anybody expects it to rise sharply in the coming year anyway. But I think it is important to take a look at it every now and then. Inflation figures play a key role in the Fed’s decision on interest rates – and that should be reason enough!

Compared to the rest of the major economies, Australia has been highly aggressive with its exit strategies as their central bank hiked interest rates for the last three months. And who could blame them?

China might not be your picture perfect country but nobody can deny its importance in the global economy and international trade. China has been dubbed as the fastest growing country over the last several years, making it the third largest economy in the world.

Ladies and gentlemen, are you all ready for the much-awaited NFP report this Friday? November’s report printed only 11K in net job losses, which was 100K less than the consensus. Could we be in for another major upside surprise?

The pound was off to a bad start this year as it tumbled against its major counterparts during the first trading day of 2010. Oh bugger, does this spell gloom and doom for the pound for the rest of the year?

Although 2009 has been quite a rollercoaster ride in the currency markets, I’m looking forward to the surprises that 2010 will bring. After all, Fed Chairman Ben Bernanke did say that 2010 would be the ‘Year of Recovery’. But I have a hunch that there’s plenty more in store us…