(As featured on My Paper on 29 March. Click here to enlarge)

The ghost of sovereign debt returned to haunt Portugal and UK last week.

S&P downgraded Portugal two notches to BBB, citing political instability as a result of the resignation of Portuguese Prime Minister Jose Socrates, after his government lost an austerity-budget vote.

The downgrade comes after both Moody’s and Fitch lowered their ratings on the country as well.

Portugal faces the bulk of it refinancing needs within the next several months. Come April, an estimated 4.5 billion Euros will be redeemed, followed by 4.9 billion Euros in June.

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(As featured on My Paper on 22 March. Click here to enlarge)

In last week’s article, we discussed the 2 main reasons why the Yen strengthened amidst the crisis caused by the earthquake.

Last Thursday, the Yen surged further, strengthening to an all-time high of 76.25 against the US dollar. Prior to that historic level, the highest level recorded was 79.75 in 1995.

That prompted Japanese Finance Minister Yoshihiko Noda to request a coordinated intervention by the Group of Seven nations to stem the bleeding.

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(As featured on My Paper on 15 March. Click here to enlarge)

Last Friday, Mother Nature dealt Japan a cruel blow in the form of an 9-magnitude earthquake along the northeast region of Sendai.

The earthquake triggered a massive 10m-high tsunami which has added to the colossal damage. Now the country is facing the threat of a possible meltdown of several nuclear plants.

As Nobel prize-winning economist Nouriel Roubini has put it, the disaster came at the “worst-time” as Japan struggles to reduce its massive debt.

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(As featured in my paper on 8 March 2011. Click here to enlarge.)

It sometimes baffles forex traders to discover that the New Zealand dollar, or the Kiwi for short, is considered a major currency in the trading world.

Why is that so, some wonder, especially when we consider the country’s small manufacturing and technology sectors, and an economy that focuses more on tourism and agriculture.

In fact, with an annual GDP of about US$135 billion (S$171 billion), it really is a dwarf when compared to the powerhouse economies of the United States, Europe, China and its closest counterpart, Australia.

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