Our last entry by our Forex Robot team discussed the gloomy outlook for both Europe and the rest of the international economic community if a viable solution was not quickly found . At the time, it had not been announced by the US Federal Reserve Bank, the European Central Bank and China that aggressive measures were agreed upon to supply much needed liquidity to financial institutions. Investors were exhilarated by this announcement yesterday and stock markets throughout the world jumped by nearly 3-5%. The EUR also recovered somewhat against the USD to nearly $1.34.
The question in the minds of our Forex Robot team is whether this is a short-term solution or something that will permanently have a positive impact on the markets and currency valuations. After yesterday's central bank induced rallies, it appears that markets are staying within range of their opening positions. The Europeans must continue to contend with a very complicated situation involving both Greece and Italy, who continue to struggle with the austerity measures they promised to implement. These policies are the reasons why so many Italian and Greek citizens are protesting against their respective governments. Unlike in the United States, that has relatively limited social services program, countries like Greece and Italy have many. These programs are quickly accepted by societies but very difficult to let go.
The possibility of a disorganized break-up of the Euro still exists and should be considered when investing in Forex. You should be vigilant and listen to news often. The Forex Robot will do our best in supplying you with information about current events related to economic activity and currency valuations, especially the Euro.