FX.co ★ Fundamental Analysis, November 24, 2010

Yesterday Wall Street trading closed with sharp index declines due to concerns over the Irish economy and the firefight in South Korea. By the end of the trading day, the Dow Jones Industrial Average dropped by 1.3% to a total of 11,036 points, the NASDAQ index descended by 1.5% to 2,495 points, whereas the S&P 500 dove 1.4% to 1,181 points.
A mixed trend has been recorded this morning on the Asian stock markets after yesterday's sharp index decline due to the tensions between North and South Korea. As such, the Tokyo stock exchange decreased by 0.7%, the Seoul stock exchange descended by 0.1%, the Hong Kong exchange rose by about 0.7%, and the Australian stock exchange ascended by 0.5%.
Ireland's RTE public channel has reported that the European Union's and IMF's bailout package for Ireland is expected to come out to a total of 85 billion Euro (114 billion US dollars) for three years, in order to reduce the government deficit and transfer capital to the banks.
Thus, the S&P rating agency reduced the long-term credit ranking for Ireland to a level of AA- from AA and for the short term to a level of A-1 from A+1. The ranking reduction places Ireland five levels away from a level of high-risk obligations. We must note also that Ireland's credit ranking is also five ranks higher than that of Greece.
In the macroeconomic arena, the American department of commerce has reported yesterday that the economy has grown in the third quarter of 2010 at an annualized rate of 2.5%, higher than previous data pointing to a growth level of 2% for the quarter, and slightly higher than economists' predictions of 2.4% growth for the quarter. Furthermore, the consumer price index, excluding the food and fuel prices, has risen 0.8%, as predicted previously. The real estate agents' organization in the United States had announced yesterday that existing home sales in the United Sates declined by 2.2% compared to the previous month, when sales had leaped up by 10%.