At first, the European Central Bank managed to calm the markets. This didn’t last too long though.

Until new developments unfold, the markets are now closed and it’s time to lean back and enjoy some long term forex articles. Here are my picks with an extended selection this time.  Enjoy!

A new government in Italy couldn’t reassure markets, and the ECB’s bond buying was necessary. In Spain, a terrible bond auction also resulted in some ECB buying. But when will the central bank step up its action? Yields are rising in all countries except Germany. Perhaps they’ll act when German yields also rise – and that’s when the euro will suffer even more.

The US continues showing signs of improvement, but there’s still one highly regarded institute which insists that a recession is coming.

The euro’s ride began to face limits, as the promises began meeting reality. There probably won’t be any magic solution.

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When it all seemed that the euro manages to forget the debt crisis for a while and enjoy some good news from the new, Fitch poured cold water on the rally with a double downgrade of Italy and Spain.

Ben Bernanke also weighed in this week, pledging to leave interest rates unchanged for two years. At least. This surprising move still left the QE3 question open, although it doesn’t seem likely now. We’ll probably have to wait for the Jackson Hole Symposium on August 26th, where Bernanke hinted about QE2.

The month of June ended, and so did the second quarter of the year and the second quantitative easing program, QE2. No QE3 is planned for now. Will this have a long term and positive effect on the US dollar?

Apart from the ongoing mess in Greece, Ben Bernanke took the stage in the past week, and made it clear that QE3 isn’t on the agenda. This may have a long term and positive impact on the dollar.