Forex Global Updates

Tax Brackets for 2010

2010-12-29T12:15:00.000-08:00

By law, the thresholds for the marginal federal income tax brackets must change each year to keep pace with inflation. For 2010, those brackets are as follows:

Individual Taxpayers

10% on taxable income between $0 and $8,375
15% on taxable income between $8,376 and $34,000
25% on taxable income between $34,001 and $82,400
28% on taxable income between $82,401 and $171,850
33% on taxable income between $171,851 and $373,650
35% on taxable income over $373,651

Taxpayers Filing as Married, Filing Jointly or Qualifying Widow(er):

10% on taxable income between $0 and $16,750

15% on taxable income between $16,751 and $68,000

25% on taxable income between $68,001 and $137,300

28% on taxable income between $137,301 and $209,250

33% on taxable income between $209,251 and $373,650

35% on taxable income over $373,651

Taxpayers Filing as Head of Household:

10% on taxable income between $0 and $11,950

15% on taxable income between $11,951 and $45,550

25% on taxable income between $45,551 and $117,650

28% on taxable income between $117,651 and $190,550

33% on taxable income between $190,551 and $373,650

35% on taxable income over $373,651

Taxpayers Filing as Married, Filing Separately:

10% on taxable income between $0 and $8,375

15% on taxable income between $8,376 and $34,000

25% on taxable income between $34,001 and $68,650

28% on taxable income between $68,651 and $104,625

33% on taxable income between $104,626 and $186,825

35% on taxable income over $186,826

These tables indicate your marginal tax rate, meaning the top tax rate at which you pay. Keep in mind that our federal income tax system is progressive -- tax rates increase as taxable income increases. This means each taxpayer reporting the same filing status actually pays tax at the same rate for the same income. So, for example, you and Warren Buffett actually pay the same tax rate on the first $10,000 of taxable income (assuming you have the same filing status).

Tax brackets are generally announced just before the next tax year begins (for example, these 2010 tax brackets were announced in the fall of 2009). With inflation remaining low, expect to see similar tables next season.

US Dollar Declines vs. Commodity Currencies on Signs of Recovery

2010-12-26T18:17:00.000-08:00

The US Dollar declined versus the higher-yielding currencies as the macroeconomic reports suggested that the economic recovery is underway, encouraging the investors to take more risk in seeking profits.

The University of Michigan index of the consumer sentiment in its revised edition showed the increase from 71.6 in November to 74.5 this month. The claims for the unemployment benefits in the US continued to decline, falling from 423,000 to 420,000 last week. The personal income in the US grew 0.3 percent in November, while the personal consumption rose by 0.4 percent.

The future reports may also provide evidences of the economic recovery. The experts predict that the Conference Board’s sentiment index would post the increase from 54.1 to 56.3 in November. The low market volatility also helped the investors’ risk sentiment to improve.

AUD/USD closed at 1.0042 after opening at 0.9990 and rising to the intraday high of 1.0065. NZD/USD closed at 0.7469 after it opened at 0.7401 and climbed as high as 0.7500.

India's Forex Reserves Decline by $1.9 billion

2010-11-20T14:36:00.000-08:00

India's foreign exchange (forex) reserves declined by $1.899 billion, going down to $298.31 billion, during the week ended November 12 because of a sharp decline in its foreign currency reserves.

Foreign currency reserves, that include US dollar, euro and British pound, among others, declined $1.79 billion going down to $269.49 billion during the week under review, according to data released by the Reserve Bank of India (RBI).

Special Drawing Rights (SDRs) declined $73 million to $5.152 billion and reserve with International Monetary Fund fell $34 million to $2.001 billion.

The value of gold reserves remained unchanged at $21.66 billion.

Loonie Falls vs. Greenback, Gains vs. Euro

2010-11-08T14:12:00.002-08:00

The Canadian dollar slipped against its US counterpart as the declining stocks and commodities caused the speculation that the global economic recovery is losing its momentum. The currency strengthened against the euro.

The Standard & Poor’s 500 Index and the MSCI World Index fell 0.3 percent each today. Futures for crude oil, the main Canada’s export, dropped 0.4 percent to $86.53 per barrel, following the 1 percent decline earlier.

The renewed concerns for the European economy allowed the loonie, as the Canadian currency is often nicknamed, to rise against the euro. In the same time, these concerns damped the demand for the riskier currencies, weakening the loonie versus the greenback. This correction may also be explained as the profit-taking by the traders after the Canadian currency reached parity with the US dollar.

USD/CAD went up from 1.0002 to 1.0024 as of 19:10 GMT today, following the jump to 1.0054. EUR/CAD dropped from 1.4058 to 1.3955.

Loonie Falls vs. Greenback, Gains vs. Euro

2010-11-08T14:12:00.000-08:00

USD/CAD went up from 1.0002 to 1.0024 as of 19:10 GMT today, following the jump to 1.0054. EUR/CAD dropped from 1.4058 to 1.3955.

Good Week for Pound, Yet Outlook Remains Uncertain

2010-10-30T11:22:00.000-07:00

The Great Britain pound rose this week as the favorable GDP report and the improving consumer confidence caused the speculation that the central bank wouldn’t introduce the additional stimulus to support the economy.

The UK gross domestic product rose twice the forecast value and the consumer confidence improved, while it was predicted to decline. The favorable reports improved the outlook for Britain’s economy somewhat. The pound erased the losses of the last week against the US dollar and ended the five-week losing streak versus the Japanese yen.

The favorable outlook for the UK economy isn’t certain. There were poor reports this week, including the report about the mortgage approvals and the home price index. The analysts think that the confidence of the Britons may drop when they fully realize the implications of the budget cuts.

GBP/USD advanced from 1.5663 to 1.6022, while GBP/JPY went up from 127.44 to 128.94.

Forex Trading Forecast for Next Week, Oct.18

2010-10-16T14:06:00.000-07:00

US Dollar on the Verge of Reversal and in Need of a Catalyst

Euro’s Late Reversal May be Start of Larger Correction Against Dollar

Japanese Yen Threatened as Fed QE Hopes Stoke Risk Appetite

British Pound Awaits Bank of England Minutes For Direction

Canadian Dollar may Lose its High Yield Appeal after a BoC Hold

Australian Dollar Rally May Falter On Comments From RBA, G20

New Zealand Dollar at Risk for Large Correction Versus US Dollar

Gold May Lose Luster As Markets Question Scope of Fed Actions

Another Week of Dollar Weakness on Talks About Easing

2010-10-09T12:09:00.000-07:00

This week was marked by the talks about the possible quantitative easing by the US Federal Reserve, the talks which were further fueled by the unexpectedly poor report about the US employment. In such environment the dollar has no choice but to go down.

The unexpected cut of 95,000 jobs by the US employers added the incentive for the Fed to start next round of the bonds purchases to stimulate the US economy. The price of the US currency dropped as the traders expect the inflow of new dollars into the economy. The analysts speak about interesting effect all this talks about the easing may have: when the actual quantitative easing occur it won’t cause much impact on the dollar price. The stimulus simply already priced in, so there’s no reason for the dollar to react even more.

The dollar fell for the fourth straight week against the Swiss franc, the euro and the pound. Against the yen it dropped for the third consecutive week, going below the 82 yen-per-dollar level for the first time since 1995. The greenback declined for the sixth week against the Canadian dollar for the seventh week versus the Australian dollar.

USD/CHF opened at 0.9753 and closed at 0.9638 this week after declining to 0.9554. USD/CAD went down from 1.0194 to 1.0112. AUD/USD rose to 0.9859 after opening at 0.9725 and falling to the weekly low of 0.9541.

Dollar Demonstrates Mixed Week on Uncertainties

2010-08-28T16:44:00.001-07:00

The US dollar posted a mixed week against the other currencies on Forex, as the investors didn’t seem to be certain of which direction to choose on worsening of the economic situation and intervention threats from Japan.

The dollar fell for a first week in three against the euro and declined for a second week against the Japanese yen. Against the Great Britain pound, the greenback managed to grow for a third week in a row but the gain was minimal this time. The poor macroeconomic releases from US that signaled about a slower recovery and pushed back the future interest rate hikes were the main drivers for the dollar bears this week.

The US dollar failed to gain against the Japanese yen even despite the expected currency intervention there, which has been a major news topic of the week. A slight increase against the GBP can be seen as the result of some moderaterisk-aversion seen this week. The analysts believe that if the next week we’ll continue seeing the same levels of pessimism in the fundamental reports in the United States, the dollar will continue going down against the majors.

EUR/USD rose from 1.2705 to 1.2760 after touching as low as 1.2588 this week. USD/JPY went down from 85.60 to 85.20, while the drop on GBP/USD was from 1.5538 to 1.5525.

Can Yen Profit from Economic Uncertainty?

2010-08-23T19:45:00.000-07:00

The Japanese yen is considered a safe currency, which makes it attractive in the times of the economic instability, like nowadays. While its appreciation slowed compared to the beginning of this year, and it even weakened a little versus some other currencies during the summer, the yen remains very attractive currency for those who desire safety. Will it retain its value or it’s time to sell the currency while it’s still highly priced? The answer is hugely depends on the risk sentiment of the traders, which can be easily changed by any economic news.

The demand for a safe haven won’t likely to go away anytime soon. The news from the US, especially the slowdown of the manufacturing and the unexpected surge of the unemployment, fueled the fears of the double-dip recession. The data from Europe, while reduced the pessimism about Eurozone previously, wasn’t too encouraging either. Even the support from Asia, which is the main reason to be not overly pessimistic about the global economy these days, waned as China slowed its economic expansion. As we see, the necessity for a safety is undoubted.

The problem is that weaker global economy means weaker demand for exports, which may hurt the export-driven economy of Japan. And this may, in turn, weaken the Japanese currency. The economists estimated, before the government report on August 25th, that the exports expanded 21.8 percent in July from a year earlier, slower than in the previous month — 27.7 percent. Of course, the possibility of the intervention by the central bank also weights on the currency. The investors speculated that the intervention may be discussed on the meeting of Naoto Kan, the Prime Minister of Japan, with Masaaki Shirakawa, the Governor of the Bank of Japan. The meeting was delayed, though, and may be replaced by the telephone conference instead as the officials is concerned that the public opinion may consider that the government has too much influence on the central bank’s decisions. Nevertheless, Yoshihiko Noda, the Minister of Finance, said that he is going to meet with Kan and expressed the desire to cooperate closely with the central bank.

USD/JPY may remain in the range 85.00—86.20 for some time, unless a breakout will occur. The yen should rise to approximately 107.50 per euro before encountering a resistance. Against the pound the yen may encounter a resistance at 131.20 before rising further.

Japanese Yen Strengthens on Renewed Demand for Safety

2010-08-18T20:42:00.000-07:00

The Japanese yen rose today as the renewed concerns that the recovery of the global economy is losing the traction fueled the demand for the safer assets.

The experts say that Federal Reserve is expected to increase its purchasing of the bonds as the US economy may weaken. The recent improvement of the sentiment on the global markets wasn’t strong enough to completely remove the concerns for the global economy. The yen also strengthened as the concerns, that the policy makes will intervene to limit the currency’s gains, eased.

The gains of the yen were limited, nevertheless, by the rally of the stocks. The Standard & Poor’s 500 Index gained 0.5 percent, following the previous decline.

USD/JPY traded at about 85.43 today as of 19:51 GMT after previously declined to 85.18. EUR/JPY traded at 109.89 after it reached the daily low of 109.58.

Russian Ruble Rises with Oil Prices

2010-08-16T11:52:00.000-07:00

The Russian rose today after crude oil, the main source of the nation’s revenue, gained and as the exporters converted their foreign currency earnings into the Russian currency.

The Russian exporters exchanged their foreign currency earnings for the ruble to pay the taxes this week. The crude oil prices advanced 0.7 percent to $75.95 per barrel in New York. The oil prices gained as the concerns for the global economy eased somewhat, but the fears may return, pushing the prices down to $60 per barrel.

USD/RUB trade at 30.541 today as of 11:02 GMT after falling as low as 30.452.

Canadian Dollar Fall vs. Greenback to Three-Week Low

2010-08-12T13:44:00.000-07:00

The Canadian dollar fell versus the greenback today to the lowest level since July 22nd after the Federal Reserve suggested that the US economy would grow with slower pace, reducing the appeal of the growth-linked currencies. The Canadian currency managed to outperform the euro.

The Standard & Poor’s 500 Index dropped 1.5 percent. Crude oil, Canada’s key export, fell 1.2 percent to $79.32 per barrel in New York. The Fed said yesterdaythat the US economic recovery would be “more modest”.

The markets still feel the impact of the yesterday’s Fed dovish statement. This are the bad times for the currencies tied to the economic growth. The loonie was particularly hit by the pessimism as Canada’s own economy showed the signs of the weakness previously.

USD/CAD jumped to 1.0446 from 1.0308 today as of 16:32 GMT after rising as high as 1.0473. EUR/CAD dropped from 1.3580 to about 1.3483.

Dollar Weakens for Sixth Week vs. Euro, Falls vs. Pound & Yen

2010-08-07T21:10:00.000-07:00

The dollar extended its losses against the other currencies as the macroeconomic reports continue to suggest that the US recovery is fragile and the additional stimulus may be required.

On Monday, the good reports weren’t able to aid the currency much, but boosted it slightly against the yen. Next day pushed the dollar down with the disheartening figures. The unexpectedly good employment reports on Wednesday sparked the optimism, which were removed on Thursday and turned in the pessimism yesterday as the reports showed that everything not that good with the job market in the US.

The greenback showed the same trend against other major currencies: the continuous decline for the whole week, except for Wednesday, when the currency jumped. The dollar also rose versus the yen on Monday, albeit not much.

EUR/USD rose from 1.3061 to 1.3292, advancing for the sixth straight week. GBP/USD jumped from 1.5895 to 1.5965 after falling as low as 1.5839 this week. USD/JPY dropped from 85.84 to 85.39, following the decline to the weekly low level of 85.02.

Euro Falls vs. Dollar on Lower German Production

2010-08-06T08:12:00.000-07:00

The euro fell vs. the dollar after the report showed that the industrial output in Germany declined and on the speculation that the conditions on the US labor market improved.

The German industrial production fell 0.6 percent in June, while the economists expected another month of the growth after the production expanded as much as 2.9 percent in May. The US non-farm payrolls expected to fall as the temporary census workers quit job, but the number of jobs, excluding the government workers, should increase.

EUR/USD traded at about 1.3172 as of 12:23 GMT after it opened 1.3188.

Bad Week for US Currency

2010-07-31T22:21:00.000-07:00

The US dollar performance was abysmal this week as concern about the slowdown of the US economic growth persists and even the good news weren’t able to weaken the fears. The dollar fell versus all other major currencies this month.

The manufacturing sector showed the signs of the weakness and the GDP slumped in the second quarter of 2010. It’s not surprising that the reports show that the consumer sentiment steadily declines. The Americans are also worried about their employment, despite the number of the jobless claims is decreasing.

In the environment of the uncertainty the Japanese yen thrives, rising against the dollar for the most part of the week. The Great Britain were rising for seven days, even on Wednesday, when it could go below opening level, but closed slightly above it. The euro fell on Friday, but overall the week was bullish for the 16-nation European currency.

EUR/USD rose to 1.3031 from 1.2893 this weak after reaching as high as 1.3106. GBP/USD went up form 1.5412 to 1.5689, while USD/JPY currency pair closed at 86.39 after opening at 87.54.

Bad Week for US Currency

2010-07-31T22:20:00.000-07:00

EUR/USD rose to 1.3031 from 1.2893 this weak after reaching as high as 1.3106. GBP/USD went up form 1.5412 to 1.5689, while USD/JPY currency pair closed at 86.39 after opening at 87.54.

Dollar Declines vs. Yen as Durable Goods Orders Unexpectedly Fell

2010-07-28T18:29:00.000-07:00

The U.S. dollar fell today against the Japanese yen after the report today showed that the orders for the U.S. durable goods fell unexpectedly in June, fueling the concern for the economic recovery and spurring the investors to turn to the safety of Japan’s currency. The EUR/USD moves up and down today after it closed yesterday near its opening level.

Durable goods orders declined for the second consecutive month, falling by 1.0 percent in June after dropping 0.8 percent in May. The impact of this report was even more significant as the market participants anticipated the growth, not another month of decline. The unfavorable economic data outweighed the better than expected corporate earning, causing the Standard & Poor's 500 index drop by 0.5 percent. The Stoxx Europe 600 index was down 0.4 percent.

Ben Bernanke, the Chairman of the United States Federal Reserve said on July 21st that “the economic outlook remains unusually uncertain”. The data from the U.S. definitely added to the risk aversion sentiment on the markets, increasing the appeal of the yen.

USD/JPY traded near 87.67 as of 16:27 GMT today after opening at 87.90. EUR/USD near 1.2995 close to the opening level of 1.2996.

Dollar Weakens as Risk Sentiment Improves

2010-07-27T00:32:00.000-07:00

The U.S. dollar weakened today as the new home sales surged in the U.S. and the corporate earning increased, improving the appetite for the risk among the investors. The greenback fell versus most of other major currencies.

The U.S.new home sales jumped in June to 330,000 (23.6 percent) from the revised May rate of 267,000. The U.S. house market was showing the awful values previously, and this improvement, while not unexpected, is much better than the economists hoped for. The Standard & Poors 500 Index rose 0.6 percent after jumping more than 3.5 percent in the previous week.

The improving risk sentiment spurred the investors to the riskier currencies, decreasing the appeal of the U.S. currency. The signs of rebound in Europe’s economy helped the euro to gain versus the greenback, while the Great Britain pound rose against the dollar after all major Britain’s banks passed the stress tests.

EUR/USD rose to 1.2997 as of 17:41 GMT today after it opened at 1.2887. GBP/USD reached the highest level in three months, climbing to 1.5490 from 1.5416. USD/JPY traded at 86.94 after it opened at 87.45 and jumped as high as 87.71.

2010-07-25T04:47:00.001-07:00

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Bank of Canada Raises Rate, CAD Reacts Positively

2010-07-22T17:44:00.000-07:00

The Canadian dollar rose against all major currencies after the country’s central bank decided to increase the target overnight rate to 3/4 percentage point on its meeting today.
The Bank of Canada announced in its statement that the interest rate is increased from 0.50 percent to 0.75 percent today. Although this decision has been expected by the majority of the market analysts, the resulting positive effect for the Canadian dollar was rather strong — it rose significantly against the U.S. dollar, the euro and the Japanese yen.
Despite the fact that the growth of the Canadian economy is slowing down, the analysts believe that the Bank of Canada may continue increasing the rates for some time, as the rate of growth of the economic output is still one of the biggest among the developed nations. Canada is now a leader by rate hikes among the G7 countries.
USD/CAD went down from 1.0545 to 1.0491 as of 17:15 GMT today. EUR/CAD dropped from 1.3654 to 1.3533, while CAD/JPY showed a growth from 82.25 to 83.11 today.

European Data Boosts Australian Dollar

2010-07-22T17:41:00.000-07:00

Better than expected news from the Eurozone helped the Australian dollar to grow against all other major currencies today despite the pessimism expressed by the RBA yesterday.
The Aussie rose against the greenback to the highest level since mid-May (this year) and extended its gains against the euro. The currency also rose against the Japanese yen and its New Zealand counterpart. The Australian dollar has been falling yesterday on concerns about the European banks’ stress tests and the statements by the Reserve Bank of Australia.
The major moving factor for the AUD were reports on Purchasing Manager Index in manufacturing and services in Eurozone. Both reports demonstrated growth and the higher than expected values. Manufacturing PMI rose from 55.6 to 56.5 and Service PMI rose from 55.5 to 56.0.
AUD/USD rose from 0.8768 to 0.8939 as of 17:28 GMT today after going as high as 0.8951 earlier — the highest level since May 14. AUD/JPY increased from 76.25 to 77.78, while EUR/AUD fell from 1.4540 to 1.4430.

Near-Term Outlook for Decline of U.S. Dollar

2010-07-20T14:34:00.000-07:00

The U.S. dollar was rising as the European crisis increased the demand for the safe currencies, but recently began to decline as the focus of the concerns turned to the U.S. themselves. While at the end of this week the greenback rebounded against some other major currencies, the future of the U.S. currency looks uncertain.
The dollar will likely weaken in the near future unless some good news from the U.S. prove the strength of the currency. The lower number of the jobless claims may spark some optimism, but other than that there is nothing to be hopeful about. In case the speculations that the European economy is stronger than it looks would prove true, the greenback will certainly fall further.
The moves of the EUR/USD currency pair can be expected to be volatile, as the sentiment shifts according to the news from Europe and the U.S. For now the shared European currency shows trend to rebound as there are more bad news from the U.S. than from Europe. On the other hand, the gains of the euro can be restrained by the uncertainty, brought to the global markets by the weakness of the U.S. economy. GBP/USD may experience some volatility too as the traders are uncertain yet what influence the budget cuts will have on Britain’s economy, so we should wait until picture becomes clear here to predict where the currency pair will go. The Japanese yen are likely to profit from the concerns about the U.S. and global economies and continue its rally against the greenback.
The dollar is nowhere near parity with the euro. It’s unlikely that greenback will go above 1.20 per euro in the near term. For now it hasn’t fallen far beyond 1.30 per euro level, but we should wait to determine if this would be the support level. Against the sterling the greenback wouldn’t probably weaken beyond 1.5475 per pound level and might trade near 1.5150 per pound. The dollar will likely be traded near the current level against the Aussie, while against the loonie it may rise to 1.0675 before dropping again.

Bank of Canada raises rates, sees recovery slowing

2010-07-20T14:31:00.000-07:00

OTTAWA (Reuters) - The Bank of Canada raised its key interest rate on Tuesday, as expected, but warned the domestic and global recovery will be slower than it had previously forecast, suggesting any further hikes may be gradual.
The central bank became the first in the Group of Seven advanced economies last month to raise rates from the emergency lows introduced during the global financial crisis. It took a second step on Tuesday, lifting the rate 25 basis points to 0.75 percent.
Canada's blistering growth rate and job gains had led to widespread expectations of another rate hike, putting the Bank of Canada leagues ahead of the U.S. Federal Reserve and other G7 central banks, which are not yet ready to end the era of easy money.
But the hawkish stance on rates contrasted sharply with the dovish outlook in the accompanying statement, leaving markets in suspense about the bank's next move. It shaved its growth forecast for the Canadian economy this year to 3.5 percent from 3.7 percent and said Europe's bid to wrestle down sovereign debt would pinch the pace of the global rebound.
"Given the considerable uncertainty surrounding the outlook, any further reduction of monetary stimulus would have to be weighed carefully against domestic and global economic developments," the bank said in its announcement.
The lack of guidance on rates was identical to language used in its June 1 rate hike announcement.
In a Reuters poll conducted after the rate announcement, all 12 of Canada's primary securities dealers predicted another quarter-point increase on September 8 but most expected a pause in the tightening cycle in either October or December.
That puts Canada in the same basket as other commodity exporters such as Brazil, which is seen raising interest rates on Wednesday but pausing soon on signs that strong growth is cooling.

Dollar Falls as U.S. Economic Expansion Slows

2010-07-15T14:06:00.000-07:00

The U.S. dollar fell today against the euro and the yen as the macroeconomic indicators suggested that the economic expansion in the U.S., while continues, is slowing its pace, curbing the appeal of the U.S. currency.
The Philadelphia Fed index fell from 8.0 in June to 5.1 in July, instead of the expected growth to 10.2, showing the slowdown of the manufacturing growth. The NY Empire State Manufacturing Index showed the same picture, dropping sharply to 5.1 in July from 19.6 in the previous month. The indicator showed that the conditions for the New York manufacturers improved in July, yet the pace of growth in business activity slowed substantially. And only the claims for the jobless benefits brought more pleasant news, falling more than expected to 429,000.
The analysts don’t look surprised by the dollar’s slump. With the depressing U.S. economic indicators the investors have no choice but to sell the dollar, looking for the more reliable currencies.
EUR/USD traded at 1.2911 as of 15:41 GMT today after opening at 1.2742. USD/JPY traded near 87.47, tumbling from its opening price of 88.49.