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Daily Forex Overview Tue, Sep 8 2009

2010-03-07T06:25:00.000-08:00

The dollar and euro fell against the yen in Asia Tuesday on selling by Japanese exporters to settle their accounts, with trading direction for the rest of the day likely to depend on stock movements, dealers said.

As of 0450 GMT, the dollar stood at JPY92.72 from JPY92.97 in London Monday, while the euro was at JPY132.90 from JPY133.54. The New York market was closed Monday for a holiday. Although the overall volume of trade in Asia was thin, some Japanese exporters and short-term hedge funds sold dollars and euros, dealers noted.

The Euro continued to be buoyant as fresh gains in Asian stocks sent EURJPY higher and Economic data in Europe underpinned gains into the USD1.4300's. July German Industrial Orders at 3.5% vs. 2% forecast. EURGBP was supported on GBP concerns ahead of the UK rate decision Thursday.

GBP peaked at USD1.6378 around the same time, but underperformed thereafter to USD1.6327. The Pound had a large bounce going into Europe as news of a USD16bn takeover offer of Cadbury from Kraft led to speculation of substantial M&A buying. This enthusiasm waned as the offer was rejected and attention turned to the MPC rate announcement on Thursday which has the potential to create further GBP downside if the Asset Purchase program is increased again from the current 175bn pounds.

The Australian dollar Tuesday continued to nudge higher while bond futures followed gains in Treasurys as dealers await a raft of top tier domestic data for the latest health check on the economy.

Market expectation

EURUSD breaks above Monday's high at USD1.4363, with reported stops above USD1.4365 targeted and triggered to take rate on to USD1.4371. Traders note major German name buys behind the move up. Next offers seen placed from USD1.4380 through to USD1.4400, with larger stops noted above here, a break to expose much reported barrier at USD1.4450.

Topping the list of releases Wednesday is housing finance, retail sales and consumer confidence, all of which will be crucial in feeding the debate on whether the Reserve Bank of Australia tightens policy as soon as next month.

Economists expect retail sales to have grown 0.5% in July, but housing finance is forecast to drop 2.0%.

Among the data Friday is China's industrial output. Economists surveyed forecast on average that output may increase by 12.0% in August from a year earlier, faster than July's 10.8% increase.

If results are weaker than expected and spur a fall in Chinese stock prices, the dollar may target JPY90 and the euro may fall below JPY130.00, some dealers said. On the other hand, if results are positive, currency market reaction will likely be limited because players have already factored in such outcomes, dealers noted.

Daily Forex Overview Mon, Sep 7 2009

2010-03-07T06:24:00.000-08:00

The euro rose modestly against the yen and dollar in Asia Monday, as stronger regional share markets encouraged short-term players to buy the risk-sensitive common currency.

If global share markets remain firm this week, the euro could continue edging up, traders said.

In Asia Monday, regional bourses strengthened, with China's benchmark Shanghai Composite Index up 1.60% midday and Japan's Nikkei 225 Stock Average up 1.0%. That came after the Dow Jones Industrial Average's closed up 1.0% Friday, which boosted the euro against its rivals.

But while the dollar fell against other rivals Monday, it gained slightly against the yen, trading hands at JPY93.15 at 0450 GMT compared to JPY93.03 late Friday in New York. Short-term players were buying the currency, prompted by the stronger regional equities and a rise in U.S. long-term interest rates, with the benchmark 10-year Treasury yield up to 3.43% Friday.

Better than forecast US jobs data, along with an absence of talk about a coordinated withdrawal of stimulus measures at the weekend FinMin G20 meeting (with the US expected to lag others in this eventual move) allowed euro-dollar to edge to overnight highs at USD1.4337 with pressure remaining into early Europe, the rate extending the move to USD1.4339.

The British pound remains steady vs. the dollar after the US jobs report for August. The pound's steadiness can also be attributed to British construction Q2 output volume falling by 0.5% which is a vast improvement from the estimated 2.2% decline, prompting speculation about a possible upward revision to GDP in the quarter.

The Australian dollar continue to break loose from its recent trading range Monday, breaching its highest levels in a year as firmer equities and investor appetite pushed the commodity currency into new terrain.

Market expectation

The euro is gaining against the U.S. dollar, UK pound and yen in rising along with stocks, though major pairs were still confined to their well-established summer ranges.

For EURUSD offers seen placed toward USD1.4350, and traders suggesting a fading toward this level on any extended rally. Above here and further offers seen placed toward USD1.4380. Traders remind that the USD1.3950/1.4450 dnt structure remains in place (matures Sep17) and expected to draw protection if either side threatened. Bids USD1.4290/85, a break of USD1.4280 to open a deeper move toward USD1.4250 ahead of USD1.4220 with stronger interest remaining in place around USD1.4190 (Friday low USD1.4191).

Dealers are focused on a raft of top tier domestic data due later this week, including retail sales and employment numbers, which could make or break a case for an October rate hike by the Reserve Bank of Australia.

Players will be watching U.S. Treasury auctions totaling USD70 billion this week for cues on interest rate moves, dealers said.

European stocks are expected to open higher Monday, following a solid finish on Wall Street Friday and an upbeat session in Asia Monday, after Friday's U.S. employment data pleased the market.

Weekly Trading Update - August 31 - September 04 2009

2010-03-07T06:21:00.000-08:00

Well thankfully it's been a much more profitable week this week after two winning trades on the EUR/GBP and GBP/USD pairs. There was also an opportunity to trade the EUR/USD pair as well this week but despite the daily Supertrend indicating a bullish trend, I'm reluctant to go long at the moment because I think this pair's heading lower in the next week or so. Plus there's been a lot of sideways action on this pair recently which is enough to put me off.

Anyway back to my trading results for this week and the first trade was on the GBP/USD pair on Tuesday afternoon. I had been waiting for this pair to break downwards and it do so convincingly during one 4-hour period. So as a result of the EMAs crossing downwards I entered on a pull-back at exactly 1.6250.

Thankfully the price continued downwards and I closed half the position for 50 points and let the other half run, moving my stop loss down to break-even. Later on the price had moved down to around 1.6125 so as it was getting late I moved my stop loss to 1.6150 and my target price to 1.6050 and let it run overnight. Sadly the stop loss was the one that got triggered but it was still a decent enough profit.

Incidentally the GBP/USD pair looks as if it may be about to cross downwards before the day is out, but I'm hoping it will hold on until next week because these crossovers often have much more momentum behind them at the start of the trading week.

The other trade was on the EUR/GBP pair and if you've been reading my blog this week you will know all about this trade already because I discussed it in some detail in this blog post. As I mentioned at the time this was a low-risk high-reward trade, and thankfully the 30 point stop loss wasn't triggered and I managed to bank a healthy profit of 74 points.

It has actually dropped another 40 points since then but I was so bored watching this pair that I closed out the position shortly after it hit my initial price target.

Nevertheless it's been a profitable enough week on the whole.

Archive for the Forex News

2010-03-07T06:19:00.001-08:00

Most of the Asian shares end higher
May 6th, 2009

Majority of the Asian markets closed higher along with the miners and financial stocks growing with the steadiness signs in the worldwide economy. Mr. Jeffrey who is an analyst was of the view that over the last eight weeks they have made a decent amount of money and theye are making their best efforts to keep that amount. He also added that for the longer term they are positive and for the near term theye are quite watchful.

Hang Seng Index of Hong Kong added 0.2 percent ending at 16,430.07; it rose for a fourth straight session and expanding a 5.4 percent. Australia’s S&P/ASX 200 increased 0.1 percent; New Zealand NZX increased 1.8 percent. As for the afternoon trading India’s Sensex also increased 0.3 percent following a soaring 6.2 percent in the prior session while Straits Times Index of Singapore added 2.2 percent.

Taipei and Shanghai registered advancement with the China’s cabinet passed a plan for making developments in the country’s coastal economic zone close to Taiwan. HSBC Holdings shares increased 1.8 percent in Hong Kong following a report in South China Morning Post that it anticipates to be amongst the first ones to register shares in Shanghai.

The airlines in Shanghai continuously concentrated on making advancements on easing the distress of swine flu along with Air China increasing 4.4 percent and China Southern Airlines added 2 percent. Some of the analysts are anticipating the profit-taking to soon take place in Taiwan, Hong Kong, and China. Mr. Johnson who is the consultant president of Marbo Securities was of the view that foreign institutional shareholders will probably carry on buying. Dow Jones Industrial Average futures were lately down 33 points in screen trade.

According to the available data from China and America, it has projected a development lately, though some of the experts have advised to take care seeing the pace of the stock markets. On Thursday, the shareholders were still waiting the outcome of American bank stress test. The officials at Wall Street Journal were likely to direct about ten out of nineteen banks tested for boosting up their capital. One of the experts at UBS was of the view that the rally in risk assets is not showing any signs of stopping.

In Sydney, Yanzhou Coal Mining added 2.3 percent, while Macarthur Coal ended up 2.5 percent, and China Coal Energy increased 3.5 percent in Hong Kong. Capital elevating worries were in progress in Australia, limiting the market profits following BlueScope Steel planned to increase 2.67 billion Australian dollars. It is evident that that stock got discarded from the trade. The stocks joined with the economic cycle increased in Sydney with Rio Tinto adding 5.4 percent and Macquarie Group added 3.6 percent.

After Cosco received its opening job for this fiscal year, Singapore’s subdued shares related to shipping increased. Cosco increased 0.8 percent along with Neptune Orient Lines adding 3.6 percent.

In six months Mexico’s Peso rises to the maximum
May 6th, 2009

Peso of Mexico rose to the maximum in more than six months after Mr. Jose who is the Health Minister of Mexico said that the affect of swine flu has increased. This has strengthened the hope that with the reopening of the business the economy will get better. The Peso rose to 13.2338 which is a climb of 4.1 percent. Since October 13 this was Peso’s highest and it also registered the highest in opposition to the dollar amongst the sixteen of the world’s best currencies.

Mr. Salvador who is the head of the fixed-income planning at Banco Santander SA in Mexico City said that the fact cannot be denied that the country’s economy will get better and this will also be good for the Peso.

Mr. Jose said that though the swine flu has been responsible for 25 deaths but now its affects are decreasing. In a television interview the President of Mexico Mr. Felipe said that the exact loss by the outbreak of swine flu can not be yet calculated, but economy’s some parts will make progress very soon and this week the situation will again become normal. The rally of Peso removed last week’s downfall of 3.1 percent which was encouraged by the outburst of swine flu and it would also affect the economy.

Mr. Dirk and Mr. Chandran of Citigroup Inc. in a report have suggested the investors to purchase the Mexican currency in opposition to the dollar. They also said that it appears that swine flu has gone. As per a survey from a bank, the economists believed that the Peso will become weak this year as compared to their earlier expectation. By the end of the year 2009 the Peso will fall to 13.64 per dollar as compared to the earlier estimate of 14.24.

This survey also concluded that this year GDP (Gross Domestic Product) will come down by four percent. The early prediction by the economists forecasted that the economy would come down by 3.2 percent. Mr. Gabriel (chief economist for Mexico and Chile at UBS AG) in a note to the clients wrote that the economists might just decrease their GDP prediction in the next month survey keeping in mind the outbreak of swine flu.

Mr. Agustin who is the Finance Minister made an approximation last week that the fear of swine flu might decrease GDP by 0.2 percent in the year 2009. According to a statement made by Mexico’s finance ministry that Mexico might have to face a downfall of 2.7 percent with the slump in America. According to the ministry, in the first quarter Mexico probably shrank six percent which is a major quarterly downfall in six years.

At a local auction Banco de Mexico purchased pesos worth hundred million dollars. Since October it has reportedly spent $23.4 billion to support Peso from its foreign reserves.

European stocks opens high
May 6th, 2009

With the worldwide risk appetite seems to be cautiously making a comeback European stocks are likely to open high as they are backed up by impressive performance both in Asia and America. According to Mr. Matt who is a dealer at CMC Markets, oil reached a five month high and this will be a good sign for the petrochemicals market even as some positive Chinese economic data is also making an addition to all this.

Mr. Matt called FTSE 100 index of London, which is reopening after a long time gap, up with 72.7 points at 4316.0. DAX index of Frankfurt was called down 6.4 pints at 4893.0 and CAC-40 index in Paris up by three points at 3241.0. He also observed one more thing which is the fading of the fear of swine flu as victims are still not informed properly outside Mexico.

In the meantime the share markets of Asia were also on the higher side with the coal miners and cyclical stocks growing in the worldwide economy. Though the trading was low with the markets of Thailand, Japan, and South Korea stayed closed. In Taiwan shares witnessed a growth of 0.7 percent after gaining twelve percent while Shanghai Composite Index added 0.3 percent with the approval of the plan of developing coastal economic area near Taiwan. Hang Seng Index of Hong Kong was 0.1 percent higher.

On Monday American stocks increased with the traders making a bet that economic recovery was soon approaching, providing desirable lift for the commodity processors and banking sector. The Standard & Poor’s 500 also shifted positive for the current year and it was closed at the topmost position since January 8th, it rose 29.71 points at 907.23. The Dow Jones Industrial Average increased 214.32 at 8426.72. This was their biggest close since January 13th. The Nasdaq Composite Index increased 44.34 and it closed at 1763.54 which was is biggest close since November 4th.

As for the currencies, the euro following its fresh run up at $1.3371 felt weaker from $1.3404. In the recent weeks the recent currency has rallied in the middle of a worldwide improvement in the risk appetite but on the other hand the euro zone is staying behind. Mr. Jan who is the head of Asian research at Rabobank was of the view that majority of the people will be concerned because of the development prospects in the euro zone didn’t improved as it did in America.

Mr. David who is a market analyst was of the view that the prices of the oil will probably test the $55 barrel level prior to facing the confrontation. In the meantime, the June bund futures agreement begun at 121.97, it came down by 0.02. In a different place spot gold was over nine hundred dollars a troy ounce, after a very impressive performance in New York.

Brazil’s Real witnessed a six month increase
May 6th, 2009

Encouraged by a rally in the stocks and services across the world the Real of Brazil increased a six month high. The currency became stronger 2.4 percent at 2.1195 per American dollar which is the maximum since November 10. The real rose 9.1 percent in the current year which is considered the finest performance amongst the other currencies of the world after rand of South Africa.

Mr. Mario who is the foreign exchange manager at Sao Paulo based Fair Corretora de Cambio was of the view that with the investors making a return to the stock market of Brazil, it will benefit the real. For the first time the Bovespa stock index increased more than fifty thousand since September with the rumors of growth outlook getting better for two of the country’s main export markets and it will encourage for services.

The real also became stronger with the rally in services prices and country’s two-third exports comprises of iron ore and raw materials. Mr. Jorge who is a foreign exchange manager at Rio de Janeiro-based Banco Prosper SA, the bouncing back of the services prices means extra income from the foreign deals and it will only increase the currency.

According to the Trade Ministry, the trading in Brazil increased from March’s $1.76 billion to $3.70 billion in April as China increased the imports of Brazilian services. According to a survey by some of the best analysts, the outcome was more than the median $3.13 billion. The survey conducted by the central bank the analysts make a prediction of 0.29 percent reduction in Brazilian economy in the current year as compared to the downfall of 0.38 percent which was approximated last week.

In nine months for the first time, the manufacturing developed in China while the American building expenditure concluded a six-month downfall. At an auction the central bank of Brazil settled to lend $804 million of a total of $1 billion to the local banks from foreign reserves. As per a statement the bank acknowledged 13 bids. The yield for Brazil zero-coupon bonds due January 2010 increased three basis points to 9.78 percent.

Berkshire Hathaway holds their annual shareholders meeting
May 6th, 2009

The annual shareholder meeting of Berkshire Hathaway Inc was an assortment of both predictable and unpredictable as Mr. Warren who is the chairman and Mr. Munger who is the vice chairman responded to the queries of investors. This years’ convention was a little different from the previous ones as this time around to avoid any individual query, the reporters have pre-screened the questions. As in the previous meetings Mr. Warren was asked about his relationship with Jesus and what he thinks about the game of baseball.

Mr. Warren who is 78 years old presided over the session along with different sayings, viewpoints, and also offered opening outline of how the company performed in the first quarter. According to the reports the entire results will be listed for next week.

The main focus of the annual meeting was mainly revolving around the matter that who will be taking over Berkshire Hathaway after Mr. Warrant mortality and the investors seemed also quite concerned about it. Mr. Warren didn’t mentioned any name that who will be succeeding the positions of CEO (Chief Executive Officer) and CIO (Chief Investment Officer) but the did mentioned about the candidature and about their performance. First quarter operating earnings of Berkshire Hathaway came down from $1.9 billion to $1.7 billion last year.

Mr. Warren confirmed that over last year the company’s book value per share came down by six percent and the reason behind is because of the downfall in the investments value.

Losses and profits from unoriginal are mainly shown in the net income which was not disclosed. Mr. Warren always has made a selection for those stocks which will be having everlasting value. While most of his investments include utilities and insurance, such firms and non-insurance working firms have experienced terrible economic condition. Early in the meeting one vital question which was asked to Mr. Warren was the fresh Moody’s reduction of Berkshire from Aaa to Aa2. Mr. Warren expressed his confidence that the downfall will not be making any difference to the company.

The board of Berkshire has selected four contenders, both externally and internally, for the position of Chief Investment Officer and three internal contenders for the Chief Executive Officer position. Mr. Howard who is the son of Mr. Warren will be handling the Berkshire’s management and taking over as the Chairman along with fifty billion dollar portfolio will get separated between the chairman, CIO and CEO. Four of the deserving contenders for the post of investment officer were unsuccessful to face 38% downfall S500 Index of S&P in the year 2008.

Uncertainty still prevails whether the profits will continue even after the rise in Asian shares
April 13th, 2009

With the preceding week’s profits on Monday the Asian shares witnessed a high once more along with the rise in the financial stocks through the turn down of the service stocks in Australia. The Nikkei of Japan rose to 2.3 percent, NZX-50 of New Zealand had an addition of 0.5 percent, and Kospi of South Korea gained a high by 1.1 percent. But some of the market analysts were not confident about the continual of the market mood due to the economic slump in America.

One of the experts at RBC Capital Markets was the of the view that with some good days in American market previous week the risk seekers will be able to have their first victory after so many months. Last week The Dow Jones Industrial Average increased to 9.01 percent. No main feedback is observed to the remarks made by Mr. Ben who is the Chairman of Federal Reserve. He was the first Federal chairman to be televised on sixty minutes in over two decades. He said that he believes that the economy will soon get normal and this will only happen after the stabilizing of the various banks and financial markets.

Nymex crude oil decreased in the field of electronics after OPEC chose to support enhanced compliance along with the current decrease amid doubts that with the high prices it could endanger the chances of bouncing back in the world economy. Economic stocks witnessed an increase with UFJ FG of Mitsubishi by 4.5 percent, Shinsei Bank increased by twelve percent, and Sumitomo Mitsui FG increased by 5.3 percent. Macquarie included 3.6 percent and Australia’s Commonwealth Bank increased by 3.5 percent.

According to a person having knowledge about the situation the government of Australia has extended the review of China’s Aluminum Corp or the planned US $19.5 billion investment in Rio of Chinalco. Also with an institutional shareholder with Australian Foundation Investment Co was of the view that Chinalco would give major authority and they don’t even have to pay the premium.

Pioneer shares increased by ten percent in Japan while they were not involved in talks with Mitsubishi Electric. According to Yomiuri Shimbun weekend report, the two had started discussion on alliance in car navigation and other fields of auto parts. In Korea the auto stocks were superior following the posting of the good sales in Europe as compared to their competitors. Kia Motors witnessed a high of 4.1 percent and Hyundai Motor increased by 2.1 percent.

In New Zealand Sentiment was assisted by Nuplex saying that for the time being their banks had given up agreements for its senior debt cover ratio and they are also planning a NZ$110 million capita increase.

Their shares got suspended from trade but in the midst of the active stocks, Mainfreight collected 4.0 percent and Pike River Coal increased by ten percent. The market of currency was uneven where the euro dropped early as compared to the yen of Japan and American dollar. After falling to $1.2832 as compared to Friday’s in New York $1.2919 and Y126.38 in Asia the euro was lately recorded at $1.2872. The American dollar was approximately at Y98.11 at first falling to Y97.56. A group of twenty central bankers and finance ministers discussed all new steps in facing the economic slump.

The profit of China Mobile up by 29.6 percent for the year 2008
April 13th, 2009

On Thursday China Mobile Ltd which is the largest phone company across the world made a statement that their profits for the year 2008 increased 29.6 percent regardless of the slow economy. It was also said that it will benefit from stimulus expenditure in Beijing. One of the Beijing’s company said that the earnings increased to 112.7 billion yuan as the revenue increased 15.4 percent to 412.2 billion yuan regardless of the slump and earthquake in China.

According to the statement released by the company, the China Mobile added over 7.2 million new customers every month in the year 2008 which helped in increasing the total to 456 million accounts. According to the number of customers which is estimated at 649 million accounts, China is ranked as the world’s largest cell phone market.

In a statement made by the chairman and Chief Executive Officer Mr. Wang, the year of 2008 was the year of the challenges and the group attained new heights in different fields. Various efforts made to develop the business really helped in flourishing the business. According to the China Mobile Ltd they are anticipating to earn profit from the China’s four trillion yuan stimulus. This way the demand will be increased for the telecom services and will also support government hard work for encouraging domestic development of the technology.

The economic development of China considerably came down to 6.7 percent for the final quarter of the year 2008 and it was down by 2007’s growth of thirteen percent. There is a prediction that in the current year the development rate will decrease to as low as five percent but it will be a major one as compared to any other main economy. Different carriers and China Mobile Ltd experienced heavy loss in the earthquake that hit Sichuan in the southwest of China on May 12th which killed around ninety thousand. One of the employees of the China Mobile Ltd died during the maintenance work.

In a statement China Mobile Ltd said that they suffered no considerable losses due to the economic crisis across the world. Mr. Wang was quite positive about the rollout of the Chinese Mobile of their 3G cell phone mobile network. The whole system is totally based on Chinese standard and it has not been used before. The experts are of the view that the company probably will face some tests if the company provides the complete services that is based on the technology.

The previous year Beijing reorganized their telecom industry in order to refresh the level of competition. They want to reorganize the carriers in the states in three different groups every carrier with the fixed and mobile resources. Mr. Wang gave a statement that China Mobile Ltd will seek more and more overseas investments but he didn’t mentioned any concrete target markets. In the beginning this year for developing the network, the company will be investing five hundred million with its subordinate in Pakistan, CM Pak Ltd.

The Dollar made a major downfall
April 13th, 2009

As the Federal Reserve is preparing for buying Treasuries promoted a rumor of degrading the greenback, the dollar came down against the currencies of the six of the main American business associates ever since the Plaza Accord which took place a quarter century ago. In an interview Mr. Bill who is co-chief investment officer of Pacific Investment Management Co. made a statement that it has given rise to the currency related problems to the degree which has led the Fed to purchase what is not liked by the foreign owners.

He also added that the Fed can easily maintain the rate of interest where they want at least from six to eighteen month but in the future it has its own disadvantages. With the central bank making a decision for increasing their balance sheet by $1.14 trillion lowered yields which reduced the value of US assets. This week since the month of January for the first time American currency came down further than $1.36 per euro.

With the Fed’s move encouraged the progress in the commodities, the New Zealand dollar and Norwegian Krone rallied. Yesterday the dollar decreased 4.7 percent in value from $1.2927 at $1.3581 per euro on March 13. On March 19 the American currency reached $1.3737 which was considered the best of the levels since January 9. The dollar also registered a drop of 2.1 percent from 97.94 to 95.93 yen. For a fifth week as compared to the yen, yesterday the euro increased 2.8 percent to 130.28 from 130.48 which was the highest level since December 18.

This week the trade-weighted Dollar Index of ICE came down 4.0 percent at 83.82. This was considered to be the highest reduction since the week in the month of September 1985 when the countries like Japan, West Germany, America, France, and Britain decided in bringing together the dollar’ depreciation as compared to deutsche mark and the yen.

On March 18 the American currency came down 3.2 percent as compared to the euro which is considered to be the highest fall since the sixteen nation’s currency debut back in the year 1999. Mr. David

Mr. David who is the global head of foreign-exchange planning at Barclays Capital in London in an interview said that the falling of the dollar this week has been valued in the policy reaction. This week the stocks witnessed progress and the crude oil. The 500 Index of Standard & Poor raised 1.5 percent and the crude oil increased more than fifty dollars a barrel.

As compared to the dollar the Krone of Norway came out as a major player where it increased seven percent at 6.376. As compared to the American cents the Australian dollar increased 4.3 percent. Norway is the biggest exporter of the crude oil and sixty percent of the abroad sales of Australia comprises of the raw materials. The peso of Colombia raised 3.5 percent at 2,358 per dollar.

According to Mr. Wen, the foreigners have fifty percent of the profitable Treasury debts. China is a major foreign holder along with $739 billion and China is concerned for the holdings of Treasuries and they expect a promise about the safety of the investments.

Goldman Sachs Group Inc has increased their betting objectives on March 19 to the dollar at $1.39 per euro. On the same day Citigroup Inc. also gave a proposal that their customers will buy the euro against the dollar. As the Japan bought the government notes and made the subordinate loans in banks to encourage the economy the yen came down a three month low as compared to the euro.

Ringgit of Malaysia move towards five week high
April 13th, 2009

Following the rumors of American attempts for removing the bad assets from the banks, Malaysia’s ringgit jumped a five week high. It will help in opening the credit and encourage the up-and-coming market assets and the bonds also registered a fall. The currency witnessed a rise for the fourth day versus the dollar. This happened after the statement made by the American Tresury for financing around one trillion dollars for buying the bad assets in order to renew the economic business.

MSCI Asia Pacific Index for the regional stocks increased on the second day and it is heading towards the biggest close in the two months. According to Mr. Lim who is the head of treasury at ECM Libra Investment Bank Bhd in Kuala Lumpur there is still hope as for the stock market to rise seeing the steps taken by the America. According to the available data in Kuala Lumpur, the rinngit increased 0.3 percent at 3.6264 per dollar. It touched 3.6201, the highest since February 17th.

According to EPFR Global of Massachusetts which is a research company which manages funds worth eleven trillion dollars, the investors are placing $348 million in the equities of the up and coming market. Asia’s five famous currencies increased in which the yen was not included after Mr. Timothy who is Treasury Secretary made a statement that America will be using seventy-four billion dollars to hundred billion dollars for purchasing property assets. It is evident that Public Private Investment Program is dependant on Federal Deposit Insurance Corp and Federal Reserve financing debt assurances.

This year the ringgit dropped down 4.7 percent. For the consecutive second day three year bonds declined and this lifted the yields. The next week the government is also making plans for selling extra securities. According to Bank Negara of Malaysia which is responsible for the sales for the treasury, on March 30th Malaysia will use 4.4 billion ringgit for auction of 2012 notes.

As per their debt schedule next month one more time the government will be selling three year bonds. Mr. Wei who is a fixed income analyst with OSK Investment Bank Bhd in Kuala Lumpur said that as the calendar for auction has been skewed in the direction of temporary bonds, there is still hope some selling difficulties in the three year time. He also added that the supply will increase in the coming month. The price slashed down 0.32 and the basis point is 0.01 percentage point.

Once more Asian shares are on a rise
April 13th, 2009

On Tuesday the Asian shares once again increased which was maintained by a public gathering on Wall Street for detoxifying the banks of their unpleasant loans. Nikkei 225 of Japan increased 2.1 percent after it increased 3.3 percent along with S&P/ASX 200 of Australia increase by 1.4 percent and Kospi Composite of South Korea up by 1.1 percent. NZX-50 also increased 2.3 percent.

The Dow Jones Industrial Average crossed 6.7 percent on Monday as the investors accepted the particulars for the Treasury’s plans for relieving the banks from the debt. The financial field of S&P 500 increased seventeen percent. Mr. Philip who is the first NZ Capital Broker said that this is related to the basic matters which have now being addressed to in America.

The experts at UBS were of the view that they were anticipating rally in stocks to be one more bear market alteration. Mr. Alex who is a senior dealer with ANZ gave his comment as it is quite madness with the things taking place in the equity market. He also said that he would like to make use of an expression i.e. caveat emptor which means that buyer be cautious. The financial stocks making good progress with the ANZ of Australia increased by 3.5 percent, Adelaide and Bendigo Bank increased by 6.1 percent, Suncorp Metway increased by 3.3 percent and Commonwealth Bank up by 4.6 percent. In Tokyo Mitsubishi UFJ FG increased by 5.5 percent along with Sumitomo Mitsui FG increase of 3.8 percent and Mizuho FG up by 6.3 percent.

In Tokyo the insurers also increased along with Tokio Marine up by 5.1 percent, but there are chances that some of the profit-takers will turn up in the Japan’s shares. The commodity plays were associated by the strong base metals along with Rio Tinto increased by 5.7 percent, Bluescope Steel up by 4.2 percent, Arrow Energy up by 3.8 percent, BHP Billiton increased by 3.1 percent. OZ Minerals came down fifteen percent with the Foreign Investment Review Board expanded their evaluation of China Minmetals’ A$2.5 billion offer for takeover spoiling the planning of OZ of rapid sanction of the contract.

After having the fresh profits auto stocks didn’t performed well enough. Since February 17th the main index of New Zealand for a short time touched its maximum level. Fisher & Paykel Appliances increased by 8.1 percent, Telecom +4.2 percent, and Fletcher Building increased by 4.8 percent. With the euro at Y133.34, the Japanese yen constantly registered a fall with its maximum level since October 21. The euro also touched $1.3670 from $1.3644 along with the American dollar at Y97.65 from Y96.90.

The yen crossed the Australian dollar hit Y69.24 which is its biggest level since November 10th and the Pound reached Y142.52 which was its best since December 1st. According to Mr. Sean who is a Westpac’s senior currency strategist, the merging of the dollar probably will continue. It also included the selling of the euro in the middle of a talk about the possible step taken by European Central Bank in the direction of quantitative easiness should decrease. The quantitative easing is not possible next week. At the dollar’s cost the currencies of Asia increased along with the greenback fell at KRW1, 384.04 versus Korean won from KRW1, 391.59 on Monday.

Despite of the fall in American Treasurys the Asian government bonds were mixed. May Nymex crude oil futures came down twenty percent at $53.58 per barrel on Globex from rising up to $1.72 in New York.

Archive for the Forex News

2010-03-07T06:19:00.000-08:00

Archive for the Forex Guide

2010-03-07T06:16:00.000-08:00

Stock gains pushed US dollar up against yen
Monday, October 13th, 2008

On Tuesday, dollar moved up session high as strengthened by recovery in stock bazaar of US with the rise in technology shares. A gain in US equities was observed buoyed by $700-billion rescue scheme of government of United States.

Investors are hoping that the bailout package will help in soothing down the lending as well as strengthen the capital spending.

After trading half percent up at 105.94 on Monday, dollar rose session high at 105.99 against the yen at EBS.

Director of foreign exchange trading at Scotia Capital in Toronto, Steven Butler, said that according to the scenario it looks like the trading sector is being forced to buy US currency. He also said that while the rise in stocks is easing the market, it still doesn’t t mean much as the market is unstable.

On Monday the Australian dollar rose to a three-week high
Tuesday, October 7th, 2008

Maintaining the craving for high yielding currencies after the government of America declared a plan that will help in stabilizing worn out financial system, on Monday the Australian dollar witnessed a three-week high. In a week three-year Australian bond futures posted their major one day downfall with a loss of 0.22 points at 94.44 along with the ten year bond contract came down 0.254 points to 94.194.

With the investors came back to their trades, the Australian Dollar also increased as compared to the yen. The local currency was at 88.43 yen off at 89.78 which is a two-week high of 89.78, but up from 86.59 on Friday. It was around 4:10 p.m. that the Australian dollar was at $0.8299 as compared to American dollar, already raised to $0.8402 which was a three week high earlier.

On September 17th the Australian dollar came down to $0.7799 which was one-year low with the credit markets witnessed disorder of the carry trades. It also reduced the whole viewpoint of universal development and prices for the goods/services. On Friday the American Treasury moved to settle the financial markets, with a plan worth $700 billion for the purchasing of the bad mortgage related liabilities from various financial institutions. This also included American units of foreign banks in an attempt to stem the most awful financial crisis.

According to Mr. Joseph Capurso who is a currency strategist at Commonwealth Bank, risk hunger has been strengthened considerably on American news and with this the markets has been confident that a major upset may be saved. If the plans are accepted by the market then there are probabilities that this week we can witness a rise in the Australian dollar.

After the investment bank Lehman Brothers fell down the American package came up, the Federal Reserve gave $84 billion in help to American International Group and Treasury took over the mortgage leaders Fannie Mae and Freddie Mae. Morgan Stanley and Goldman Sachs also renounced their status of investment banking to be converted into bank holding companies those are controlled by American Federal Reserve for providing security in financial scarcity.

The Australian dollar also increased with the high prices of commodity along with the increase in oil prices which is stable over $104 a barrel and the gold with $867 per ounce. For the past few years Australia has been very good with the resources and is a big exporter of products/services. On Monday Australian Bureau of Agricultural and Resource Economics was of the view that both the iron ore and copper will be going ahead from its previous predictions.

Morgan Stanley signs a letter to sell 20% stake
Tuesday, October 7th, 2008

On Monday, Morgan Stanley announced that a letter has been signed with objective of selling of 20 percent of the firm to Mitsubishi UFJ Financial Group Inc.

The firm did not disclose the financial terms of the deal. While the letter signed by the banks is said to be nonbinding, Morgan Stanley hopes to raise a price based on its book value following the completion of diligence review by the largest bank of Japan, if the deal is done.

The whole idea of the deal comes after the approval from fed to Morgan Stanley for becoming a bank holding firm. This major investment bank of Wall Street was allowed by Federal Reserve to become commercial bank in order to accept deposits. Now, this key firm of Wall Street will not be regulated by Securities and Exchange Commission anymore; instead will come under the Federal Reserve.

Morgan Stanley’s chairman and chief executive, John Mack, in a statement said that the deal would give opportunity to grow to both the banks as well as chance to make it big globally. He also added that the partnership would help the changeover of Morgan Stanley to a commercial bank as well as give a financial support to the firm in shoring its capital base in the time of credit crisis.

Past week has been busy with reports of sale of Merrill Lynch & Co to Bank of America, filing of bankruptcy by Lehman Brothers Holdings Inc and selling of Morgan Stanley.

Indian Rupee touches 2 year low against greenback
Monday, October 6th, 2008

Rupee reclaimed its ground at 45.85/86 against US dollar, after it lowered down in early trade with a two year low of 46. The gain had been a result of drop in local stocks and dollar’s weak position in abroad.

The Indian rupee strengthen at 45.53/55 against dollar after it had a close of 45.75/76 and later the currency reached 45.46, pushed by fall of dollar against major currencies. Although in late morning trade, rupee dropped to 45.85/86 against dollar, a level last reached in 10th October 2006 with a close of 45.80/81 a dollar.

In early trade, the Indian currency was found 25 paise down to 46 in opposition to greenback. According to foreign exchange dealers, the outcome of rupee hitting a low is a result of fall of Asian stocks as well as fine amount of dollar purchase done by banks.

Greek Unemployed Rate Falls to 10 Yr Low In 2Q
Friday, October 3rd, 2008

The quarterly unemployment rate of Greece came down to 7.1% in the second quarter of the year and the most striking part is that it is their ten year low. According to the data available from National Statistics Service on Thursday, it came down from 8.2% rate in the first quarter. According to the available data there was an ongoing job increase in just about all the industries and areas and brought continual unemployment rate in order with the Euro-zone averages in Greece.

According to a statement by Manolis Kontopyrakis who is the chief of the statistics services, with this data we are very pleased that we are experiencing a downfall in unemployment in all areas and sectors of the country. He also added that we have sufficient facts and figures to make a prediction that in the coming two quarters the ratio of unemployment will fall down more. This is for the first time that the yearly rate of unemployment for the current year will be below eight percent since the analysis got began in the year 1998.

Especially for the current year Mr. Manolis made a prediction that the standard rate of unemployment would be 7.7%. According to the new received data as compared to first quarter’s 4.50 million, the number of employed went up to 4.56 million in the second quarter. In the second quarter the unemployment rate for male was 4.6% which also witnessed a downfall from a 5.4%. As for the females the unemployment came down to 10.8% which was earlier 12.2%

Going according to the age group, the unemployment rate mainly comprised of the young population, here also the unemployment for the age group between 15-24 age groups came down to 15.4% in the second quarter which was 17.3% in the first quarter. Going according to the region in the year’s first three months main unemployment rate was in the industrial region of Western Macedonia where the unemployment was 12.3% which came down a little from 12.5%.

The islands of northern Aegean having the lowest unemployment rate, here also the unemployment fell to 4.1% in the second quarter earlier which was 5.3%. Attica where half of the Greek population lives, unemployment rate came down to 6.0% in the second quarter from 6.5% in the first.

Greece is happy with a healthy economic growth i.e. of 3.4% in the second quarter so far which is not influenced by any financial problems. But the employment opportunities stayed poor and were quite behind the average mark.

Dollar falls as Lehman talks of filing for Bankruptcy
Wednesday, October 1st, 2008

Monday witnessed a fall in US currency in Asian trade bazaar, as Lehman Brothers statement raised concerns regarding stability of financial system of United States. The Brothers sparked possibility of rate cut by Federal Reserve, by confirming about their plans for filing for bankruptcy.

From Friday’s closing point of 107.86, US dollar fell 2.3 percent down at 105.45 yen . Whereas the euro stumbled from 153.43 to 152.26 yen. With trade being thin during holiday in Japan, yen gained heavy with investors hanging on to it. Yen hasn’t gained this big since 2002.

On Sunday, chain of urgent and emergency actions was taken by Federal Reserve. The measures were aimed at controlling economical markets as well as to calm down commotion or disturbance following the end of Lehman. Out of the steps measures, one major step was to take equities the same as collateral. According to this change, equities will taken as collateral in support of cash at special credit facility. Fed has taken such step first time in its history so far.

Head of investment research at Bank Julius Baer, V. Anantha Nageswaran, called Federal Reserve’s such ability as a negative point for the United States currency. On Monday, Treasuries scaled on to the concern regarding Lehman, as the measures for rescuing Wall Street investment bank weakened along with the talks that insurer AIG was in quest for urgent funding. According to the statement made by Lehman Brothers, the firm would file for economic failure. Lehman also added that the filing would not include any of its broker-dealer subsidiaries.

In the meantime, reports came regarding acquirement of Merrill Lynch & Co Inc by Bank of America Corp for an amount of $44 billion.

Head of bond fund Pimco, bill gross, said that the decision of filing for bankruptcy could lead to turbulence in the market.

America faces business differences against China
Tuesday, September 30th, 2008

According to China’s WTO mission on Friday, China has started a dispute against America at WTO (World Trade Organization) over the American actions of importing certain steel pipes, woven sacks, and tyres. According to a statement, believing that two-sided discussion between China and America failed to resolve the problems of China. China had asked for consultation with America under the WTO dispute settlement mechanism concerning those measures.

This is the second trade case that was initiated by China. It is evident that it was in the previous year’s month of September when China challenged the actions of America against their imports of coated sheet paper. One of the Chinese officials was of the view that going according to the consultations under WTO dispute method with America, Washington had ruled out that there is in fact no danger to the American business of paper and for that case there are no actions that needs to be used.

Without going to WTO panel China solved the case in their favor, though WTO didn’t gave any sort of confirmation that the case was really solved. It was the year of 2002 when China joined the case, after few months of joining the WTO, started by European Union against American actions on steel imports which afterwards America lost. China being the second largest exporter regularly has to face trade issues and America challenged China so many times from importing taxes on car parts to the safeguarding of the intellectual property.

It was the July’s unsuccessful ministerial talk looking for a get through in WTO’s Doha round where China conflicted with America over America calls to get rid of the taxes in some of the industrial areas and suggestions to protect the countries from the impact of agricultural tax cuts. According to mission statement, China has time after time showed their concern to America about the Commerce Department actions undertaking unjustly pricing, Chinese subsidies for various products, and imports. These include- round welded carbon quality steel pipe, laminated woven sacks, light-walled pipes and tubes in rectangular shape, and new pneumatic off-road tyres.

Week high rise in Taiwan Dollar
Thursday, September 25th, 2008

Monday witness a week high rise in Taiwan Dollar on quick foreign finance inflows following a stock market pushed forward, due to intervention to lift the local currency by central bank. Taiwan Dollar augmented to around T$31.498 to USD, which is 1.2 percent higher to T$31.875 i.e. the close of Friday.

The soaring point of the day was also the strongest intraday level ever since September 1. The Taiwan dollar had soared to a high of T$31.610, by 0239 GMT. At the first hour and 30 minutes, the main Taipei Forex Inc exchange volume was $896 million, which was $426 million higher than what it was at the same period in preceding session.

After trending down for last few months following the weak status of stock market, on Monday the Taiwan Dollar recovered from its losses. However, the currency is stills 5.3 percent low since it touched a 10-1/2-year high of T$30.

According dealers in Taipei, the Taiwan dollar has experienced a huge push following the improvement in Taiwan stocks, which got its boost due to foreign fund buying. With central bank trying to support and sustain Taiwan Dollar for last few months, officials on Friday made calls to dealers inquiring about USD purchases with currency hitting six and half month lows. Many dealers said the move of central bank of Taiwan calling up to inquire about USD was intended to make sure the Taiwan currency does not deteriorate or weakens after hitting six and half months lows.

With six-month NDFs quoted at -0.430/-0.380 in contrast to Friday’s session of -0.180/-0.130, USD sales were in on the go momentum, in non-deliverable forwards market. This clearly meant that the investors believed in huge degree strengthening of Taiwan Dollar, in half a year. From the last close of T$31.903, Taiwan Dollar toughened to T$31.610 to the USD on smaller Cosmos exchange.

Traders look forward to ECB and Boe, as the dollar trips
Tuesday, September 23rd, 2008

With traders locking in profit from the remarkable gains by dollar in last few weeks, Thursday saw the currency slipping down the board. As the dollar slipped, investors anticipated interest rate judgments by European Central Bank and Bank of England.

On Wednesday Euro touched an eight month low, as the US currency positioned itself to smash a five-day winning line. After the rate pronouncement, traders were left to anticipate any comments from Jean-Claude Trichet, the ECB president.

The rates are being left unchanged by ECB at 4.25 percent. While re-leaping collateral regulations, it is being anticipated that ECB might issue new set of financial or economical projections. The rate announcement is expected to come at 1145 GMT prior to a news conference of Jean-Claude Trichet.

Analysts and experts are expecting Jean-Claude to steady his acknowledgment slow and lower growth with a strict and sturdy attitude on the consequences of knock-on price rise.
Strategist at RBS Global Banking, Paul Robson, said that people hoping that Jean-Claude would maintain his tough attitude. He said that the new collateral regulations as well as the higher inflation outlook and descending growth prediction is expected to offered mixture of policy issues for the market and experts to think over, which might add to instability of euro.

Robson also added that the day of unchanged rates in UK and euroland could prove to be a remarkable one with the press conference of ECB. Rate decisions from central bank became the theme for the day, as Riksbank of Sweden raised the rates to 4.75 percent by 25 basis points in highly anticipated decision. But with a prediction of a fall in borrowing costs in upcoming weeks has put Sweden under a pressure of selling.

The European currency rose to $1.4510 as it pulled back from the previous day’s hit of $1.4384, a 0.1 percent of rise since January, where as the dollar was found moving up as it touched 108.50 yen.

With a 0.4 percent of increase in oil prices, the currency of US was weighed down as the dollar index .DXY skidded to 0.1 percent. The fall in oil prices is recovering from a fall of 9 percent so far in the current week.

Prior to any holding of rates by BoE at 5 percent, Sterling moved up to $1.7820 with a rise in 0.4 percent. But in order to support weak economy there is expected a cut in the works. On Wednesday, the anticipation of cut has pushed the currency of UK to a two and half year low.

Following an announcement from Riksbank, euro moved up to 9.4761 with a 0.2 percent rise.

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Reserve Bank of India generated surplus on weak rupee
Monday, September 22nd, 2008

Reserve Bank of India has cashed huge surplus on weak rupee. To stay steady in foreign exchange market, RBI sold a part of Forex reserves.

RBI has witnessed an increase in its growth by 45% for year 2007-2008 from foreign exchange market. The record growth is assisted with a record Rs 15,011 crore surpluses transferred to the government, whose accounting year finished in the June of 2008.

The total income of central bank rose 41 percent more, as it saw the growth of income from initial amount of 41,039.73 crore (the profit earned by the sale of SBI shares is excluded) to Rs 57,750 crore in the year 2007-2008. Central bank’s major source of income is foreign exchange operations, capital gains/losses on foreign currency securities, discounts gains/losses in Forex trading, and comprising interest.

With 90 percent of Reserve Bank of India’s income being generated from foreign exchange, the financial year of 2007 saw an increase in foreign sources as it went soaring from Rs 35,152.99 crore to Rs 51,883.27 crore.

Another area of profit used by central bank was the sale of dollar since the beginning of April, when dollar reached higher level of price from the level it was brought, which benefited the bank a lot. Reserve management strategy of the bank for the year included a prominent feature where it pulled out of deposits with reign commercial banks those hit by sub-prime emergency.

Since central bank has been lending to banks suffering tight cash situations on regular basis, it is expected of it to profit from hike in repo rate in the existing year. The cash situation of many banks has been stiffening up due to a hike in reserve requirements (CRR) by the central bank, which is a part or amount of deposits with the Reserve Bank of India. The funds or amount of money parked with central bank as CRR does not provides any interest rates to banks.

Forex: USD/JPY moves in ranges between 92.35 and 92.00

2010-03-07T06:15:00.000-08:00

fxstreet.com
USD/JPY has been moving inside a range with support at 92.00 and resistance at 92.35, since the beginning of the American session. The pair is now near resistance zone of the range, in case the Dollar recovers further the next resistance lies at 92.55. On the other side, if the pair managed to break below 92.00 the next support lies at 91.70 and below at 91.40. Greenback is falling for the fifth consecutive week and is facing a downward trend that started two year ago.

FOREX-U.S. dollar slides to 2009 low vs euro 9/09/2009

2010-03-07T06:14:00.000-08:00

Currency update
$A Prices9 September,2009
09/09/2009 13:16 Sydney, Australia.
Currency Value Change
USD 0.86 -0.19%
GBP 0.5202 -0.42%
EUR 0.593 -0.27%
JPY 79.39 -0.21%
CAD 0.9264 -0.38%

* Investors in risk-seeking mode as global stocks rise

* Diversification talk keeps dollar on back foot

* Euro breaks above $1.45, highest since December (Recasts, updates prices)

NEW YORK, Sept 8 (Reuters) - The U.S. dollar on Tuesday sank to its lowest level against the euro this year as volume returned after a summer lull and traders sold the currency amid a rosy global outlook.

Analysts said the dollar could resume seasonal declines as liquidity increases after a brief period in which the greenback rose following upbeat economic indicators.

The U.S. currency, seen as a safe haven in times of uncertainty and financial distress, tends to fall when investors' risk appetite increases.

Further weighing on the dollar were renewed concerns about the status of the greenback as the world's reserve currency sparked by a United Nations agency report on Monday and news out of China expressing concern about printing money to fund Treasury purchases. For the UN report, click on [ID:nL7696421].

"The dollar has been beaten down by several news headlines -- with the UN report and the China news," said Jacob Oubina, currency strategist, at Forex.com in Bedminster, New Jersey.

Britain's Telegraph newspaper over the weekend reported that China was concerned about the Federal Reserve's policy of printing money to buy Treasury debt, which could threaten to set off a serious decline of the dollar and compel China to redesign its foreign reserves policy.

The report quoted a top member of the Communist hierarchy, Cheng Siwei, former vice-chairman of the Standing Committee and now head of China's green energy drive.

"All these things are dollar-negative. This is a reminder that the U.S. dollar is poised for some weakness in the months ahead," Oubina said.

In addition, the euro's push above $1.45 should pave the way for significant gains. The euro rose as high as $1.4535, the highest since December 2008.

In late afternoon trading, the euro last traded 1.2 percent higher at $1.4508.

NEXT TARGET FOR EURO/DOLLAR

HSBC said in a research note "the increased participation and liquidity (as summer trading ended) would theoretically increase the chances that the latest rise in euro/dollar can be extended."

HSBC said the euro's next upside target is $1.4720, a breach of which should propel the unit to its highest in nearly a year.

Against a basket of major currencies, the dollar slumped to its lowest in nearly a year. The ICE Futures' dollar index <.DXY>, which measures the value of the greenback against a basket of six currencies, fell to 77.047 -- its lowest since late September 2008. The index was last at 77.3064, down 0.9 percent.

"As we enter the first trading day after the summer, investors are decisively in risk-seeking mode," said Camilla Sutton, a currency strategist at Scotia Capital in Toronto.

Over the past two decades, September has been the second weakest month of the year for the dollar against the euro, with December being the weakest, according to data compiled by RBS Global Banking and Markets.

"Today's price action may likely be the beginning of the next leg lower on the dollar," said Scotia Capital's Sutton. "It all started when gold led the move higher in commodities, and as it broke the key $1,000 level it helped push the dollar even lower."

Gold earlier jumped to $1,007.45 an ounce , its highest since March 2008. It was last trading at $993.70. The yellow metal tends to track moves in the U.S. dollar inversely, as it can be bought as an alternative asset to the greenback. It is also cheaper for non-U.S. investors to buy gold if the dollar falls.

U.S. crude futures also rose sharply on the New York Mercantile Exchange and traded above $71 a barrel .

Sterling, meanwhile, rose to $1.6587, its highest in two weeks against the dollar, spurred by a bigger-than-expected increase in UK industrial production. [ID:nONS004469] It was last up 0.9 percent at $1.6488.

What moves the currency rates?

2010-03-07T06:13:00.000-08:00

A lot of reasons can have their hands behind the fluctuating market and currency rates, and not one or two can be blamed for any sort of rise or fall in them. Although it would not be entirely wrong to say that the Forex market business is more or less based on these fluctuations only. Traders trade in this market, purchase and sell various currencies with the expectation of making gains if the value of the exchange moves in their favor. Now this sudden movement in the market can be caused by either market news or current events all over the world, which have an effect on the demand and supply of these currencies.

This law of demand and supply is what works well in this Forex market too. When the demand of a particular currency goes up, its market price also escalates as compared to the other currencies in the market.
Similarly, if the demand of a particular currency goes down, traders are no longer interested in holding it back with them, and so the market price of the currency also decreases.

Economic development

It is quiet obvious that the traders trading in currencies and interested in exchange markets, will be equally keen and interested in knowing about the overall economic development of the countries whose currencies they hold, or are interested in buying. Every trader wants to be convinced that they economy they are about to invest in is developing with a solid and steady growth, which can be known by studying various factors such as unemployment, import and export, and the GDP statistics of a particular country.

Rise in Unemployment experienced by any particular country is considered as a negative factor, whereas a fall in Unemployment is always measured as a positive aspect.

Similarly, an increase in the GDP figures of a particular country is considered as a positive feature, whereas a decrease in GDP figures is always measured as a negative aspect.

Also, a mount in the Exports numbers of a particular country are always considered as a positive trait as compared to the decrease in Exports numbers which is looked upon as a negative aspect.

Political strength

Lots of factors are responsible for determining the political stability of a particular country. These factors can be any kinds of alterations in government or by the government, rising unemployment rates, elections or international and political conflicts.

Every investor is cautious enough and considers all these factors in his mind before going in for investing in a particular economy.

Any kind of Political conflicts, natural calamity or terrorism attacks or wars are major contributors in making or marring the economy of a country.

Interest Rates

Around the world, interest rates are always followed by money. If the interest rates of a particular country rise up, investors big and small from all over the world would want to invest their money with it in order to gain higher returns on their investments.

Mostly it can be said that if you want to capitalize on higher investments, then you have to keep an eye on the rise and fall of the interest rates in a particular country. And the factors which will help you determine this rise and fall are mostly the financial rise indicators in addition to the speeches of the current leading, dominating and significant figures like big politicians, iron and steel magnets and businessmen.
The interest rate movements generally take place during the programmed meetings by the central banks like BOE, FED, ECB, and BOJ.

An increase in the Interest Rates is always considered as a positive factor for a particular country as compared to the decreased in Interest Rates.

Technical Analysis - Indicators

2010-03-07T06:10:00.002-08:00

Technical Analysts believe that all the financial markets move by trends. They are of the opinion that Forex trading market is not that unpredictable as it seems to some. If the past movements and price trends of the market are thoroughly studied, then according to the technical analysts, current as well as future movements of the market prices can be easily estimated.

And for sighting these past trends and movements and representing them clearly and orderly, Technical indicators are used. These indicators are basically figures and data of past market records based on diverse statistical calculations. These indicators facilitate the traders using technical analysis, to predict if there are any continuations or turnarounds in the market trends.

There are many different types of technical indicators which are used in technical analysis, a few of which are given below:

Trend indicators

The continuances or reversals of a price movement in any particular direction over a period of time can be defined as a Trend or a Pattern. It is believed by the technical analysts that trends seem to move in three directions, either up, or down or sideways.

Trend indicators are used to even out inconsistent price records and stats to produce a combination of market trends. They also reflect the direction and the momentum of the current trend. The most common Trend indicator is Moving Averages.

Flux indicators

Flux or volatility indicators are used to reflect the degree, or magnitude, of everyday rate variations with or without describing its direction. These indicators are important as it is seen that variations in volatility can be liable to show traders a way to price changes. The most common Flux indicator is Bollinger Bands.

Support / resistance indicators

Support and resistance indicators are used to reflect orderly, the effect of the basic process of demand and supply on the price levels due to which the markets ascend or descend time and again. The most common Support / resistance indicator is Trend Lines

Oscillators/ Momentum indicators

Oscillators/ Momentum indicators are used to reflect systematically, the momentum at which rates or prices move about in a specified period of time. They help the analysts in establishing the advantage or disadvantage of a trend or pattern as it develops over a time period.
It is believed that strength of a trend or a pattern is maximum at the initiation of a trend and minimum at crossroads or transition phase of a trend. The most common Oscillators/ Momentum indicators are RSI, Stochastic and MACD.

Sequence indicators

Sequence indicators are those which are used to signify recurring trends in any market movements, related to repeated patterns or events such as specific time of the year, wars, elections etc.
Due to such events and happenings, many financial markets have a trend of moving in cyclic patterns. The most common Sequence indicator is Elliott Wave.

Strength indicators

These indicators are used to reflect market strength and the power of market opinions relating to an outlay by studying the market situations obtained by different market traders and investors.
Being the fundamental elements of this indicator, Volume or open interest generate signs that are immediate or driving the market. The most common Strength indicator is Volume.

These days, nearly all charting packages contain some of the above mentioned technical indicators. Traders while choosing a charting package can easily add their preferred technical indicators to their charts.

Essentials in Forex

2010-03-07T06:10:00.001-08:00

There are quite a few basic essentials which a trader should learn well, when it comes to trading Forex. These are some of the tools that the trader will need at various stages of Forex trading.

Evaluating Profit and Loss

If you are trading through an efficient online trading platform, it is likely that you will be provided with an automated calculation of your Profit and Loss vis-à-vis your open positions in the Forex market. This facilitates the trader, making it easier for him to keep track of his position and movement in the market automatically.
Nevertheless, it is still helpful for every Forex trader to know and comprehend the calculation through which, these results are derived.

Knowing all about Margins

Advantages are many, when it comes to getting good margins for trading. Margin can be known as the minimum amount required to be deposited before an investor starts trading. This can also be known as the initial amount with which the Forex trading account can be opened.

With bigger margins, you can get more buying power in your hands. For example, if you have $5,000 worth money in your margin account which also provides 100:1 leverage, then you can easily buy about $500,000 of exchange.
This is for the reason that you only have to position 1% of the buying price as security in your account. Thus, in other words, you have a $500,000 worth of buying power in your hands.

This is exactly why trading exchange with a margin account facilitates you to raise your buying power. Margin accounts can also allow you to enhance your overall return on investment with less capital pay out.
But what needs to be kept in mind always is that, while trading on margins can increase your profits, there is an equal and opposite possibility that it can amplify your losses as well.

Making use of a Margin account for Forex trading can definitely turn out to be a profitable investment strategy, but only if you manage your account wisely. Along with the profits, what also should be considered seriously are the risks which are involved by getting more buying power with lesser cash outlay, as this may also lead you to lose more than you have at times too.

Also, always make sure that you thoroughly read the margin agreement which occurs between your payment firm and you. Talk to your account representative if you have any questions.
In the cases where the margin available in your account drops below a preset boundary, there are 99% chances of your account positions being partly or completely shut down.
Also, there is a possibility that you might not even get a margin call before closing down your positions.

To avoid such a risky situation, it is always advisable that you supervise your margin account stability regularly to keep a check that your money does not stoop as low as the margin set.
Also, make appropriate use of correct stop-loss orders along with every open position. Setting a stop-loss order will help you limit your risks and fix a safe point for exiting the market.

Price chart patterns

There are a range of charts available, which can help you study the Forex market patters and price actions. Although many types of chart forms are used to represent the market movements, the Bar charts are the most commonly used charts to describe the patters simply and clearly.
In these Bar charts, each bar or slab usually signifies a period of time ranging from a minute to a number of years. The significance of these charts is that they show diverse price patterns that have been established so far.

Some other types of price chart patterns are:

Point and figure patterns

The point that differentiates the Bar chart patterns from the Point and figure patterns is that, the latter does not employ time scales to specify a specific day or month related with a particular price action.
Yet, they are basically the similar to the patterns created through the Bar charts.

Candlestick patterns

Candlestick patterns are also employed to forecast the market, just like the Point and figure patterns and Bar charts patterns. But Candlestick patterns are more visually appealing, detailed and clearer than the other patterns, because of their tinted bodies.

Are you an “obsessed to win” trader?

2010-03-07T06:09:00.001-08:00

Traders of all kinds have always been attracted towards Forex trading with the basic motive to make profits, and to win as much as they can. The thrill to enter the market, the adventure to bid the money, and the attempt to predict the unpredictable drives investors to this largest Foreign Exchange market in the world.

But what we as traders do not realize is that unknowingly, our emotions can make us trade incorrectly.

There is no doubt that entering Forex market can open a lot many avenues for you as a trader to explore large money making prospects easily accessible with the Forex trading these days. People from various genres, class and gender enter the Forex world on a daily basis, just for the hope of winning it all and experiencing the great style and life of a money-making Forex trader.

But, while get easily floored by the profits and winnings of a successful Forex trader, what is easily forgotten is the fact that while there are quiet a few traders who are winning at the Forex market one day, they can always be the ones who can lose all their winnings the very next day!

What needs to be understood is that Forex trading market is just like a war front, where you have every possibility to lose the battle as much as you have to win it. It is a war where you can easily lose all your capital and confidence if you do not act sensibly in your wars in opposition to the Forex market

Forex market can often act as a clever, frightening and a somewhat wicked enemy at times too. This is exactly why every move in the Forex trading market should be a planned and organized move. You, as a trader should never be unprepared when inside the trading system once. With such a volatile market as the Forex, anything can happen anytime. In the world of Forex market, the first thing that can go against you while trading is your over confidence to win.

An obsession to win for a trader, can become a benefit for the market, making it easier for your enemy to defeat you, as you become overpowered by your emotions.
A lot many traders and investors believe in the strategy of never to close a trade until or unless it is turning into a profitable one. An approach which can surely lead them to a series of losses. Also, many investors think that the assumptions and predictions they have made on a particular trade, based on some trading indicator and industrial analysis will always churn out accurate and right results for them.

Believing that the Forex market will begin performing in the exact same way in which they had predicted, even if the trading graphs and charts clearly indicate the opposite, is foolishness. An attempt which can make traders lose all their money on false anticipations. No wise Forex trader will trade with such illusions in his mind. In reality, the market can any moment, move against or with you. Such a behavior while trading will only lead you to continuously pouring in your money into losses, which will obviously be market’s gains.

You will be easily defeated by your own obsession of wining which will at the end of the day, turn into a loss for you instead of being profitable.

So, always keep in mind never to be obsessed with emotions and trade Forex.

FOREX Trading History

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The FOREX trading system was originated centuries ago. Since the era of Babylonians, the need to own and exchange different countries for trading purposes existed. Although, during that time, it was more known as the Barter System, which we call Trading, today!

More like a give and take situation, Barter system involved weighing the worth of one good in terms of the other. But with time and extensive use of this Barter system, lots of apparent limitations also came on the surface slowly, hence convincing the people to seriously think on the lines of establishing some more well-known and recognized mediums of exchange.

When extensive trading started happening between the people of various countries like Africa and Asia with the help of this system, another main issue of concern came into existence. Where in some economies, goods such as feathers, stones and teeth provided as base economies, in others, other goods were given more importance.
Soon, it became very important for all the people to demand for a establishing a common base of value. And shortly, assorted metals like gold, silver and bronze began to ascertain themselves as the established payment methods. Further more, they also established themselves as a consistent storage of value.

With the invention of the Coins in the Middle Ages, which were originally cast in the chosen metal, the creation of a papered structure of governmental I.O.U. also achieved approval and recognition under the steady political administration. Though earlier when introduced, it was not easily accepted by people, and so establishing it through force had proved more effective than through advising. And today, this papered form is the basis of our modern day currencies.

Along with being credited with the first use of paper notes, they also initiated the use of papered receipts. During that time, speculation in trade was hardly experienced by people, and if we compare that market situation to the one we have today, the huge speculative movement in the exchange markets nowadays, would not have been appreciated at all.

The elimination of the gold standard in the year 1931 along with a big decline in the market created some severe stillness in the Forex trading activities. From 1931 to 1973, the Forex market underwent a lot many modifications and alterations. So, with the aim of guarding the nationwide interests, improved foreign exchange controls were set up to stop market forces from demanding economic inconsistency.

The Bretton Woods contract was achieved on the proposal of USA in July 1944, nearing the conclusion of World War II. The conference being held in Bretton Woods, New Hampshire for this agreement discarded John Maynard Keynes proposal for a new world reserve exchange in support of a structure built on the US Dollar.
As a result to the Bretton Woods agreement, a method of fixed exchange rates was decided upon, which partially re-established the Gold Standard, setting up the USD price at $35.00 per ounce of Gold. While this was how a USD was priced, other main currencies were set up against the dollar.

During the early 1980’s, London became the main hub of the Euro-dollar market. What contributed to this situation were the British banks, which began loaning dollars as an option to pounds. They took this step just to retain and continue their primary position in worldwide economics, and till today, London successfully remains the key offshore market.

Since the time of Babylonians to the present era, we have seen a vast development in the foreign exchange trading, slowly escalating amongst the other exchange markets, just to reach the top to become the world’s biggest trading market.

Limitations on currency flows have since been eliminated in nearly all countries, thus allowing the market forces to be free to regulate foreign exchange prices in agreement to their apparent values.

Investing Blunders made in Forex

2010-03-07T06:07:00.001-08:00

Whenever you decide to step into the Forex market by investing into this trading business, you should prepare yourself for entering into the market, somewhat blind.

This because you or anyone else, who is just stepping in, can not entirely know what position of the investing trend is currently going on, in which you are entering at.
Or, you might invest in the Forex market just before the market trend changes.

Smart and planned investments are the ones which protect your trading flow and help you put up a stop loss order on all your trades. And yes, this exit point of your trade has to be decided beforehand, that is before you enter the trade.
Once in the market or trade, you won’t have much time to think and last minute uncertainty can give room to blunders.

A stop loss order can plainly be defined as a trade exit point decided beforehand, which helps a trader in keeping a track of the right point at which to exit the position he is trading at.

A predefined exit point shields your investing plan for trading purposes by cutting your losses, and also guards against all your emotional or gut feelings which might tell you that you may get lucky with this deal or that.
Hence making you go ahead and bet in a deal without thinking much about your position and whether you will be able to bear its results if the market moves against you.

Another important fact about the history of investment blunders is that all the giant investing losses had once begun as a series of small losses. And this is exactly the reason why predefining a stop-loss order is so vital before you begin with a trade.

There is however a very common doubt which seems to be appearing in every trader’s mind while deciding the stop-loss order, “How wide should I set my stop?”
And although there are no standard answers to this doubt, it can still be cleared with some help.

Firstly, the width of your stop-loss order totally depends on the time frame for which you are planning to invest.

If investing short-term, you will have to set a stop loss order which is closely set to the currency price. But if you are investing long-term, you will have to give your currency price some more room to shift or move about and therefore, set your stop-loss order a little lesser.

Secondly, once it is clear to you what time structure you will be trading for, you are now required to eradicate the typical market disturbance in terms of instability, in that specific time structure.

Setting very tight or limited stop-loss orders can have some serious drawbacks to it, some of which are as follows:

• Firstly, setting tight stop-loss orders will actually minimize the consistency of your trading system because due to a tight order, you will get stopped out of the trade a little too often.

• Secondly, since your trading transaction costs add up for a key share of your company expenses, you considerably amplify your transaction costs

Therefore, it is always advisable for the Forex traders to develop a trading system that is operational for a somewhat extended time structure.

With a smart and planned trading system employed, stop-loss limit set to minimize investing risk, and a well structured money management strategy in place, any trader can be well positioned to get the most out of their market trading and profits.

Types of Forex Traders

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Foreign Investments Companies

Foreign investment companies are basically the investment organizations which are carrying out foreign currency trading operations in the market. These companies show great requirements for a particular foreign currency. For example, if we talk about foreign investment companies like importers of certain products, that these firms would like to buy in bulk, a particular foreign currency for trading and business purposes.

Same is the case with other investment firms like exporters of certain products, who would like to sell a particular type of currency more. These firms do not have a direct admission to Forex market. They operate their conversion and depository processes via commercial banks only.

Commercial Firms

Commercial Firms make for a sizable part of the Forex trading market and a significant part of the market gets its way from the economic activities of such firms which are looking for foreign currency to pay for all the goods and services they employ.

As compared to the big financial companies and huge banks, these commercial firms often trade a rather small amount of money, and their trading mostly has a slight temporary effect on the overall market rates.
Trade flows, in terms of internationally big companies, becomes a central issue in the lasting direction of a currency's Forex rate. Some of these global giants are also capable of having an impulsive impact on the market rates, especially when very large positions are filled, of which, not many retail or individual traders are aware.

Commercial banks

In the world of Foreign exchange market, the maximum control is in the hands of huge multinational banks and organizations. This is because of the fact that their everyday degree of actions of trading and market cross over billions of dollars.

With such a huge figure in their hands, it would not be wrong to say that these commercial banks use up an indispensable amount of exchange transactions. The banks can be said to gather through all their clients, the growing and collective wants of the market for currency exchange. Also, in addition to agreement of clients’ purposes, the banks can sometimes trade for their own operations for their own means too.

Some of the well known international banks which are successfully involved with Foreign Exchange are Chase Manhattan Bank, Deutsche Bank, Citibank, Standard Chartered Bank and Barclays Bank to name a few. Their huge quantities of transactions can lead to noteworthy alterations in the currency rates. Mostly these big commercial banks are divided into Bulls and Bears.

Bulls

Bulls are those Forex market members who are concerned with the escalating of currency rates.

Bears

Bears are those Forex market members who are concerned with the depression of the currency rates.

By and large, the market is in a position where balance can be maintained between bulls and bears.

Asset Management Companies

Asset Management companies are the ones which basically handle big money accounts on behalf of their clients, like pension funds etc. Such companies employ Foreign currency market to assist dealings in foreign investments.
While such companies are into Forex market and trading currencies, they take these transactions as secondary to their real investment business, and hence, are not intended for revenue-maximization.

According to the BIS study of Triennial Central Bank Survey, year 2004, 14% were between a dealer and a non-financial company, 33% concerned a dealer (ie a bank) and a finance manager and a major 53% of transactions were totally interbank.

Managing Forex Losses

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One of the key principal of successful Forex trading is to keep your losses minimized and limited. When the trends of the Forex market are going against you, turning you towards losses, it is ideal to go in for small loss limits so that you can pass this phase safely, without turning bankrupt.

Small Forex losses can sometimes help you survive that period of the market, when it is moving against you, and also help you to still be placed firmly in the market, when the trend finally turns in your favor.

The easiest and proven way to limit your Forex losses to minimum is by fixing beforehand, the highest acceptable loss per trade keeping in mind your total Forex budget for trading, prior to even opening a Forex position.

The highest amount of capital loss is what you can afford losing easily on a trade or deal.
In other words, this can also be known as a “Stop Loss” order, which is considered significant amongst the many techniques of good money management strategies.
Making sensible use of this money management technique will make you stand apart from the several other traders out in the Forex market, who have been losing all their trading cash to the market just because they didn’t feel the need to adhere to efficient money management strategies to their Forex trading system.

If a trader does not follow the correct money management rules while trading Forex, there are chances of him losing more money than he can afford to. For example, if a Forex trader, with a total trading budget of $1000, starts to trade and makes a deal worth a $100, it would then perhaps be tolerable for the trader to suffer a loss once.
He would then go ahead and trade another $200 for another deal, and this time again he loses, perhaps a little low with luck and thinking this, he again, for the third time, tries to trade another $200 on a deal, just to suffer another loss.

Now, he had a total of $1000, out of which he has already lost $500 straight, and is now left with only another $500. but instead of stopping and quitting here, he might still carry on to trade again, thinking that after three consecutive losses, he is bound to be lucky this time, and thinking this, puts in another trading offer for $200 more.

After betting $200 on this next trade, his capital could be reduced to $300. The probability of making profit now is virtually none, because, just to get back almost three-fourth of the total amount that he has lost, he would have to gain at least 3 consecutive profits trading, for which, he is left with not much money now.
With his finances finished, even if he is actually getting lucky with trading this time, he really doesn’t have any more money to play and recover at least all that he has lost, let alone making profits.

This situation would not have occurred if the trader had preset the maximum loss amount which he could afford, and stuck to it.
The reason for this disappointment was that the trader jeopardized too much of his trading money, without thinking once of applying good money management techniques to the trade. Trading the whole Forex trading funds just for losses no way makes a good trading strategy.
In fact this can lead a trader to a position where he does not even have enough funds left to make a wiser deal and recover what he has lost!

Always keep in mind, that a significant rule of money management is to keep your losses to a minimum so as to limit your losses and increases your profit with retaining your funds for a better deal.

Types of Forex brokers

2010-03-07T06:05:00.001-08:00

Brokers are one of the most important elements of the Forex market. Be it individual traders or trading or financial firms, everyone prefers to opt for a professional and well experienced broker, who is aware of the nitty-gritty’s of the market and its trading trends.

Forex brokers can be easily divided into four categories, such as Market operators, Small brokers, Market makers and Kitchens.

Market-makers

These are the somewhat bigger financial firms which provide for smaller broker firms. They also offer tentative Forex trading prospects but only for those individual Forex traders who are willing to invest a trading capital of or more than $50,000 or so.
Although as compared to the multi national big financial companies, these firms are comparatively not that big and also offer a lesser cost of Forex market trading.

But as compared to the individual brokers, they generally have solid financial background and can be trusted for their credibility more often than not. Nevertheless, with their policy of offering their services only to those traders which are willing to invest a minimum amount of $50,000, makes them inaccessible to the greater part individual Forex market traders.

Market Operators

Market Operators is a group which comprises of big commercial banks and sizable financial companies which are accustomed to the bank policies and laws. The biggest advantage offered by these companies is that they offer their clients or traders with the maximum level of dependability.

However, as the Market Makers, Market Operators like huge financial firms and banks also demand an equally huge bill amount size. Such bills and huge amounts can only come from big international businesses or companies, thus making these huge banks inaccessible to the individual investor. The minimum amount required by these banks can go up to about 1 000, 000 US dollars.

Small brokers

These are small or individual broker firms which attract the new or individual traders. Since they themselves are not such big financial firms, they are willing to deal with individual investors keen on investing a little sum of money in Forex trading.

They accept to work with the traders willing to invest money from a few hundreds up to some thousand dollars. After taking quotations from a number of individual traders, these brokers then work with the market-makers further, to clear the orders of their clients.
This is because the market-makers have a minimum investment requirement of $50,000 or so. So to meet this amount, the local broker unites the funds from all his clients into one bill, addressing it to the market-maker. This way, individual market brokers deal with the market-makers and take the orders of the individual traders forward.

With all these type of broker organizations available to a trader to choose from, what the trader now needs to know is which type of broker suits him. One of the major factors to be taken into consideration for this would be the amount of money he is willing to invest into Forex trading market. And based on this criterion would he then come to know which broker or broker organization can he deal with.
Once a broker has been short listed, now left are the other factors like credibility, honesty, experience, skill, reputation and professional attitude on which the selected broker needs to be tested, before handing him over the initial investment money.

Benefits of SPOT

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SPOT or Single Payment Options Trading is one of the two options available to Forex traders for trading purposes, the other one being the “Traditional” option.

SPOT can be known as more of a trader oriented option, where in he predicts what he feels with be the movement in the market on a particular day or date. And if the trader is successful in predicting it correctly, then the potential profit to be earned can be very high. And if what the trader has predicted goes wrong, and the SPOT option is not the right hit, the trader will not be suffering a huge loss for it. Only the premium given to him by the broker is lost.

For example, if a trader predicts a scenario where the market with EUR/USD will break 1.5000 in 15 days, he will then attain a premium quote. And in case the predicted scenario actually occurs in the market, then the trader will receive a payout with the premium quote.

Moreover, SPOT options are much easier to trade. It’s all about having thorough knowledge about the market and its trends, because that is the only way by which a trader can be able to predict correctly, the movement of the market.
And if you are accurate, you can receive instant profit which will be transferred directly to your account. And if you are wrong, the only loss that you’ll have to bear is the loss of the premium that you were paid by the broker.

Another great benefit of SPOT options is that it presents its traders with a vast choice of unique scenarios to choose from, enabling the trader to select precisely what he/she believes might happen in the market.

SPOT options allow its traders with many choices, such as Standard options like:

Digital SPOT
This option allows you to receive a payout in case the currency price is goes above or below a certain level.

One-touch SPOT
This option allows you to receive a payout once the currency price reaches a certain level.

Double one-touch SPOT
This option allows you to receive a payout in the situations when the price reaches either of the two set levels.

No-touch SPOT
This option allows you to receive a payout in the situations when the price does not reach a certain level.

Double no-touch SPOT
This option allows you to receive a payout in case the currency price does not reach either of the two set levels.

Benefits of SPOT

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Risky Forex

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Along with the Profits, which is the main reason for the traders to trade Forex, it is extremely important to be conversant with the Losses as well, which one can encounter while trading. While it can be easily said that all financial investments are capable of offering some risk or another, the risk involved while trading foreign exchange deals and trades can be extensive at times. Forex does have the capacity to make its traders go into tremendous loss or low with their deals, because of it being a highly volatile market.

Hence, if you are taking into consideration, the idea of trading with Foreign Exchange market, it is important for you to think about the risks or at times, the frauds connected to the trading market, to help you in making more sensible and conversant decisions.

It should be made clear to all who are willing to dive into this Forex trading market, that Foreign Exchange is not a place suited for each and everyone who have money to invest. Carrying along with it a substantial amount of risk, trading with Forex should be done rather cautiously. For instance, a specific amount of “Risk Capital” should be kept aside for trading. These should be the only funds to be used while dealing in highly speculative foreign currency trading. “Risk Capital” represents the funds which one can manage to bear a loss with, without upsetting his/her home financial conditions.

There are many reasons due to which a trader might suffer losses in his Forex trade. The most important one being, that in this speculative yet volatile market, no one knows when the markets will turn against you. And while investing huge amounts of money, although everyone is hoping for the market to go in their favor, there are really chances for market to go along favoring all of them together.

Everyone takes the risks, but while some have to bear the loss, others win profits. Not much can be done with the risk percentage involved while trading, but yes, there are some aspects of market trading which if kept in mind, can prepare a trader for worse, as well as alert him to make wiser trading decisions. Some of these aspects are mentioned below.

Your trading platform could crash

If you are trading Forex using an electronic platform like computer, internet or telephone, then there are chances for your system to crash at any hour. This may unable you to get the current and latest of what’s going on the market for a while, till your system gets repaired.

Such a situation may result in making you inaccessible in the market for some while, hence you may not be able to place new orders, carry out existing orders, or close the previously entered orders. Such a situation may result in a loss of orders and the opportunities to close the deals, if any.
Opting for Off exchange

If you plan to opt for trading Forex through Off exchange methods, then you are totally relying on your dealer and his honesty. Off-exchange Forex trades are not backed by any clearing group or firm. So, if your dealer goes bankrupt, there are chances that no organization will be willing to back you up as here, you chose to trade with a dealer, out of the market trading. And since no market norms were followed while fixing the price of the currencies to be exchanged, your money is likely to get no insurance cover too.

Since there is no central place for Off exchange trading, it likely, that the trading you do with your dealer outside the Forex market, is not regulated. This is because the dealer is the one here, who is determining the effecting price, so you are solely banking on his honesty for a correct price and fair deal.

The market could go in opposition to you

Forex is a highly volatile market and predicting its movements can be impossible at times. No one can predict entirely how the market will move? That is the main reason why it has a high speculation rate to it.
Definitely if you go buy studying the past trends and patterns of the market, you can still make out roughly about the market movements, but certainty is not possible. Fluctuations in the currency exchange prices or rates can affect your trade or deals. The market can move in favor or against you any time, resulting in possible profit or loss.

Frauds or Scams

Forex is a highly potential market for frauds and scam artists. Although the market is significantly safer and cleaner to trade now, than it was a few years ago, care should still be taken while dealing with a broker. Always check the documents before signing any contract and read the terms and conditions fully. Being vigilant is the key to safe trading. Also, always prefer to deal with professional brokers who are attached to reputed financial firms and banks. Also, registered brokers such as those listed with the Commodities Futures Trading Commission or the National Futures Association should be preferred.

Also, beware of any brokers or financial firms offering too good schemes or deals, with very low or no risk trading guarantees. The brokers claiming to offer higher returns should also be thoroughly checked before signing up with them and starting to trade.

All the above mentioned risks can be avoided by keeping into consideration that any of this can happen to you while trading. Keeping this in mind will keep you prepared about the consequences that you can face and hence, help you make wiser and informed trading decisions.

Although we know by now that Forex is a risky business, there are a few measures, which have been created to limit, if not completely stop, a trader’s financial risks.

Firstly, every investor should try and develop his/her own trading strategy. Be it technical, fundamental, or both, every trader needs to follow a strategy which logically backs the trading decisions that he is making. All the market trading should be done using the money which you can afford to lose, not affecting your home finances, in case the market decides to go against you. Also clearly mark your entry and exit points with every deal you make.

Along with the entry and exit points, a trader also needs to posses thorough knowledge about the past trends of the market. How to make graphs, how to study the financial graphs and how to read, understand and aptly interpret the indicators and chart movements correctly is very important.

There is a huge amount of information available easily these days on this 24 hour market, but what needs to be taken into consideration is the information which is relevant, to our trade.

Positions in Forex

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Forex is a market where currency is a bought and sold everyday. Trading of more than 1.5 trillion US Dollars everyday makes Foreign Exchange one of the largest financial markets in the world. The main aim for everyone trading Forex is to make profit from their position.

Now, the most important question here is that, what is a position?

A Position can be defined as the netted total holdings of a given currency. A position can also be termed as a trading view expressed through the pattern of buying or selling. It can denote the size of a currency either being possessed or payable by a trader. A position can be categorized into 3 types:

Flat or Square trade or position has no exposure in the market.

Short trade or position is where more currency is sold than being bought.

Long trade or position is the one where more currency is bought than being sold.

Open trade or position is the one where an investor has either bought or sold a currency but is yet to sell or buy back the corresponding amount to successfully close the position.

Currencies are always valued in pairs in a Foreign Exchange market. That is the reason why all trades bring about an instantaneous or real time buying and selling of currencies, where one currency is bought as the other is being sold.
This is the main reason why Forex is known as Foreign Exchange or a Crossing Currencies market. The main aim of all the traders while trading Forex is to exchange one currency with another, with the anticipation and probability that the market prices will change. And if that happens, then the currency you bought has the chances to increase its price as compared to the currency that you sold.

If the currency that you buy increases in its value as compared to the value on which you bought it, then you must instantly sell it back to gain the profits and secure them.

Other terms such as “Going Long” and “Going Short” in a market are also frequently used. “Going Long” is used when you are buying a currency and are therefore, said to be “long” in that currency.
Similarly, when you are selling a currency, you are said to be “Going Short” in that currency.

Because the Forex market goes by the exchange system, traders can be seen buying and selling currencies simultaneously, hence “Going Long” in one currency and “Going Short” in the other.
An Open position is one which is current and ongoing. Here, the trade is still going on. In order to Close a position, a trader has to conduct an equal exchange deal with the same currency pair.

If a currency is bought by you, which has suddenly appreciated in its value, then have the chances of making profits making the deal and by closing your position. This means that you will have to sell that particular currency, just to buy the counter in the pair.

FOREX ANALYSIS - STAGE VI

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How to trade is the most important factor that needs to be understood by once a perception of the external factors of trading has been made. The real job for a trader is to know his own mind. Working according to the external elements is a comparatively easy job, as they generally are quiet objective, accurate, reliable, and structured.
But same cannot be said about the trader's mind, which is firm at one minute, and soft in the other.

While trading and being a part of the ongoing fluctuations in the market, an investor undergoes an enormous range of thoughts and emotions. While some might turn out to be good like feeling lucky, or victorious, the others might turn out to be bad like fear of failure or anxiety. But going through all this turmoil, it is highly exceptional to come across a trader who constantly sticks by his initial trading plan.

When it comes to trading Forex, or any business for that matter, sentiments or emotions are the biggest hitch. This is because all these emotions tend to make a trader go weak when it comes to maintaining discipline and balance and adhering to the predefined trading plan.
What needs to be understood here is that discipline, control or restraint is far more important while trading Forex than the real currency traders are here to trade. This is because any kind of capital can only be sustained by anyone with correct management techniques and discipline.

A trader in this Forex trading business has a lot of value to the market. When a trader trades equipped with a thoroughly studied trading background and past trends and comprehensible goal study, he has the ability to build on a superb trading system.
This said, no guarantee can be taken of any trading system or approach, as it can rise to success in 1 second and go down into losses in the other.

And what’s more, the basic reason for this downfall is that a trader while going by his predefined trading plan must have at some point tried to mix it with his gut feelings or emotions. One thing should always be made clear that emotions have absolutely no place in trading.
These emotions generally come into play when a trader either encounters a large loss or a huge win. Emotions in such cases then tend to cause a trader to act in a different way, making him act illogically and foolishly at times just to go ahead and mess up his planned strategy and play the large moves by his gut feelings. Emotion causes the trader to apply his trading system in patches, with emotions taking over now and then.

Using simple trading strategies can get you to make big wins in the market, provided you stick to them through out. Professional or experienced traders always trade using conventional, carefully planned money management strategies which would enable them to trade with complete stability.

When it comes to large financial firms and institutions, complete stability is never an issue with them, as they have not one, but many human resources and assets at their side.

But when we talk about an individual investor, we can easily divide them into three different groups.
The ones who trade with inconsistency,

The investors who trade with manual constancy

And the traders who trade with programmed reliability.

While a new trader would always hop from one trading strategy to another, an experienced trader will work smoothly with constant restraint and discipline making it the basis of his trading actions which will help him increase his level of refinement.