Real Investment Forex

Fudeu!!!!

2008-05-14T23:46:00.000-07:00

Acabou a farra e nem recebi....

Dollar falls against yen in late trading

2008-05-12T22:48:00.001-07:00

NEW YORK (AP) - The dollar fell against the Japanese yen, trading at 103.82 yen late Monday night in New York compared with 104.17 yen late Monday afternoon.Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Singapore Telecom end-March mobile subscribers over 185 million

2008-05-12T22:46:00.001-07:00

SINGAPORE (Thomson Financial) - Singapore Telecommunications Ltd. (SingTel), Southeast Asia's biggest telecommunications operator, said Tuesday the group's combined mobile subscribers rose to over 185 million as of end-March from about 124 million a year ago.SingTel units in Singapore, Australia, Bangladesh, India, Indonesia, Pakistan and the Philippines added 13.8 million new subscribers in the first quarter, the biggest quarterly increase.The group will release its year to March 2008 results tomorrow.Based on a Thomson Financial poll of 13 analysts, SingTel's full-year net profit should average S$3.77 billion, little changed from S$3.78 billion a year ago.

Forex - Dollar trading in tight ranges ahead of Bernanke speech, data

2008-05-12T22:45:00.000-07:00

TOKYO (Thomson Financial) - The dollar was trading in narrow ranges against major currencies in afternoon trading on Tuesday,with investors hesitant to take fresh positions ahead of a series of data this week that could provide further clues on the magnitude of a U.S. economic slowdown.Retail sales figures are expected to be released on Tuesday, while consumer price inflation datawill be released on Wednesday and housing starts are due on Friday.Investors were also waiting for a speech by Federal Reserve Chairman Ben Bernanke for fresh leads on the health of the U.S. economy and where interest rates are headed. Bernanke is due tospeak on Tuesday at a financial markets conference organized by the Federal Reserve Bank of Atlanta.At 1:45 p.m. (0445 GMT), the dollar was at 103.85 yen, compared to 103.69-103.79 yen in late New York trade. The euro was at $1.5525, compared to $1.5477-$1.5487.The euro advanced against the dollar on speculation that European monetary authorities maytolerate a stronger currency, traders said."While a slew of economic events this week could move the market drastically, there is also a possibility that we end up with rangebound deals at between 102 and 104 yen as the market currently lacks focus," said Yosuke Hosokawa, currency dealer at Chuo Mitsui Trust & Banking Co.Traders are also closely watching developments in Asian markets after a strong earthquakeshook China's Sichuan province, raising worries about reconstruction costs. The death toll from the 7.8-magnitude quake has risen to nearly 10,000, according to China's state media.
Tokyo 1:45 p.m. (0445 GMT)
U.S. dollar yen 103.85
Swiss franc 1.0450
EuroU.S. dollar 1.5525
yen 161.26
Swiss franc 1.6224
pound 0.7945
PoundU.S. dollar 1.9536
yen 202.90S
wiss franc 2.0415
Australian dollar
U.S. dollar 0.9456
pound 0.4838
yen 98.20

USD Slips, ECB & BoE Unchanged

2008-05-12T08:23:00.000-07:00

The dollar eased against the euro and the yen in the Thursday session, falling to 1.5441 and 103.42, respectively. Central bank decisions garnered the lion’s share of the attention today, with the European Central Bank and the Bank of England both announcing rate decisions in the morning.

The US economic calendar was light today, which saw weekly jobless claims improve to 365k versus 380k a week earlier. Meanwhile, wholesale inventories posted a 0.1% decline in March compared with a 1.1% increase in February. Friday’s data will see the March trade deficit, expected shrink to $61.3 billion down from $62.32 billion in February.

Forex online

2008-05-11T15:15:00.001-07:00

The FX market
The foreign exchange market, also known as the FX market, or FOREX, is the global market of exchanging or converting one currency for another, this conversion is accomplished by selling one currency and buying another. The relative amount of each currency in the transaction is determined by the foreign exchange rate between the two currencies (also known as the currency pair). There is no formal exchange location where FX trading occurs. They are done OTC, or over-the-counter. The transaction of exchanging a currency pair takes place directly between two counterparties via telephone or electronic data link (trading platform). The counterparties for an FX transaction may be located anywhere in the world. These exchanges take place 24 hours a day from Monday morning in Australia, through Friday afternoon in New York. The size of the market and the ability to trade it worldwide, day or night provides the facilitation and liquidity that make FOREX an excellent investment opportunity.Speculating on the price changes between two currencies is what brings such large numbers of investors and traders to the FX market. The exchange rate is in constant fluctuation and is influenced by several different factors, including fundamental, technical and political. This affects one or both members of the currency pair, and therefore the relative supply and demand. Traders can make significant profits buying or selling a currency’s pair at one rate and then reversing or closing the transactions at a more favorable rate.
There is more speculation and trading opportunities in the FX market than in all other financial markets combined. Since trading in FOREX is a leveraged transaction, there is a significant opportunity to make a profit while maintaining a healthy risk/reward ratio. Leverage, liquidity and 24 hour facilitation all combine to make the FX market one of the premier investment vehicles available to investors and brokers alike.

Wall Street looks to US consumers for direction

2008-05-11T15:09:00.000-07:00

NEW YORK (AP) - With millions of stimulus checks going out to taxpayers, Wall Street wants to know where that money will be spent -- and this week's data could help investors gauge the mind-set of the average consumer.Tax rebates have historically been helpful in boosting the economy, but they only really work if they're used to buy goods and services. With many consumers weighed down by debt and saving up to keep up with the cost of basic necessities, some market experts are concerned that what's best for most individuals -- saving their rebates -- might not end up helping the broader economy.Whether the average consumer feels financially healthy could determine whether the economy gets that late-2008 lift that so many investors have been betting on.On Tuesday, the Commerce Department reports on retail sales in April. Economists surveyed by Thomson Financial/IFR estimated, on average, that sales dipped by 0.1 percent last month after growing by 0.2 percent in March.Also this week, several big retailers -- Wal-Mart Stores Inc., Macy's Inc., JCPenney Co. and Kohl's Corp. -- release their first-quarter results, along with outlooks for later in the year.After seeing last week's batch of mixed April sales figures from individual retailers, Wall Street knows that spending remains weak, but investors want more information. Retailers have made clear that consumers are changing their spending habits to accommodate the rising cost of energy and food, but no one knows how long these conditions will last.Investors will learn more about the inflation consumers face when the Labor Department releases its consumer price index Wednesday. The index is expected to have risen by 0.3 percent in April after increasing by a similar amount in March. Core consumer prices, which strip out food and energy, are expected to have climbed by 0.2 percent after rising at the same pace the previous month.Last week was a downbeat one in the stock market, with the major indexes retrenching following three straight weeks of gains as a few poor earnings results and surging oil prices weighed on investors. The Dow Jones industrial average sank 2.39 percent, the Standard & Poor's dropped 1.81 percent, and the Nasdaq composite index slid 1.27 percent.Crude oil soared by about $10 last week to settle near $126 a barrel, yet another all-time high. Meanwhile, the average roadside price for a gallon of gasoline jumped above $3.67.Market experts are split over whether oil prices will remain at these levels, surge higher, or collapse, so stock traders will continue to monitor the energy markets closely.In other economic data this week, on Thursday, the National Association of Home Builders releases its May index and the Philadelphia and New York Federal Reserves report on their regions' manufacturing activity. On Friday, the Commerce Department reports on housing starts in April and the University of Michigan releases its consumer sentiment index.Other major companies releasing earnings this week include MBIA Inc., Sprint Nextel Corp., Toll Brothers Inc., Deere & Co., Freddie Mac, and Hewlett-Packard Co.

Forex - Euro in focus before Trichet testimony

2008-05-08T07:18:00.001-07:00

LONDON (Thomson Financial) - The euro was firmly in focus as markets await the imminent testimony from Jean-Claude Trichet, president of the European Central Bank (ECB).The ECB left interest rates on hold at 4.00 percent on Thursday, a decision fully expected by markets because of the bank's inflation concerns. The euro was little changed, continuing a gradual drift higher against the dollar and the pound.The key focus, however, is on Trichet's press conference, which investors will comb though for any signs the ECB is softening its tone on inflation. Ashraf Laidi, chief FX analyst at CMC Markets, said: "We certainly do not expect Trichet to temper the bank's persistent hawkish stance as oil prices surge to new highs."Instead, he may shed a little more attention on the emerging signs of weakness, such as euro zone retail sales," he said.Laidi predicted the euro would weaken even without a softer tone from Trichet, because markets are revising their expectations for euro zone interest rates going forward.Euro zone CPI inflation remained way above target at 3.3 percent in April, albeit down from 3.6 percent in March, and continued inflation pressures are expected to keep ECB rates on hold for some months to come. However, many analysts are penciling in cuts later this year as economic indicators turn lower.Indeed, data are beginning to reveal cracks, with German industrial production figures earlier on Thursday showing a 0.5 percent drop in March from February. Euro zone retail sales earlier in the week were also soft.Elsewhere, on currency markets, the pound was steady, benefiting little from the Bank of England's (BoE) widely expected decision to keep interest rates on hold at 5.00 percent.After gaining a brief fillip from the decision, because markets had priced in some chance of a cut, the pound quickly settled back to previous levels, with many analysts expecting the bank to deliver a quarter-point in June."It seems odds-on that the Bank of England will trim interest rates from 5.00 percent to 4.75 percent in June, thereby maintaining the trend of cutting by 25 basis points every two months," said Howard Archer, chief UK economist at Global Insight.Later on, markets will also look at data out of the United States.Initial jobless claims are expected at 370,000 for the week ending May 3, from 380,000 last time, while continuing claims are also seen edging down.Meanwhile, wholesale inventories are expected to increase just 0.5 percent from the previous month's 1.1 percent gain.London 1157 GMT London 0805 GMTU.S. dollar yen 104.16 up from 103.84Swiss franc 1.0546 down from 1.0556EuroU.S. dollar 1.5366 up from 1.5334yen 159.99 up from 159.22Swiss franc 1.6206 up from 1.6188pound 0.7853 up from 0.7852PoundU.S. dollar 1.9568 up from 1.9523yen 203.69 down from 203.76Swiss franc 2.0624 up from 2.0612Australian dollar U.S. dollar 0.9419 up from 0.9390pound 0.4814 up from 0.4809yen 97.99 up from 97.56

Romanian central bank raises 2008 inflation forecast

2008-05-08T07:17:00.000-07:00

BUCHAREST (Thomson Financial) - The National Bank of Romania raised its inflation forecast for the current year on Thursday but predicted that price pressure would begin to ease from the summer after peaking in March.The central bank said it expected consumer price inflation to average 6.0 percent for the whole of 2008, fractionally higher than the previous forecast of 5.9 percent. The bank's governor Mugur Isarescu said inflation should start to slow in the summer after peaking at 8.63 percent in March, the highest level since January 2006.Nevertheless, there were still upside risks, Isarescu cautioned, pointing to wage hikes over and above increases in productivity; a steeper-than-expected decline in the value of the national currency, the leu; lax fiscal policy and fast-rising fuel prices.The only factor having a beneficial effect on inflation was the strong performance of the agricultural sector, following the catastrophic drought last year, the central bank chief said.The National Bank of Romania also downgraded its inflation forecast for 2009 to 3.5 percent from 3.9 percent previously.

Forex - Dollar strengthens after robust U.S. productivity data

2008-05-07T07:47:00.001-07:00

LONDON (Thomson Financial) - The dollar rose following a robust rise in U.S. productivity data and evidence that inflationary pressures from wages have been contained.Non-farm business productivity increased by an annual rate of 2.2 percent in the first quarter, beating Thomson IFR Markets' consensus forecast for a 1.7 percent gain.In addition, unit labour costs rose by 2.2 percent, below the 2.6 percent economists were expecting."The first-quarter productivity and unit labour cost figures provide a timely reminder that the inflation outlook isn't quite as apocalyptic as many commentators seem to be suggesting," said Paul Ashworth, U.S. economist at Capital Economics."If labour costs are barely rising at all the inflation outlook may not be anywhere near as bad as many people now fear," said Ashworth.The positive U.S. data adds pressure on the euro following Wednesday morning's weak retail sales figures from the single currency zone.Following the data, the dollar had strengthened to a day high of 1.5396 per euro, from 1.5433 prior to the release. Meanwhile, the pound had fallen to a day low of $1.9534 from 1.9554.

FOREX Slovak crown jumps to new all-time high on euro adoption news

2008-05-07T07:46:00.000-07:00

WARSAW (Thomson Financial) - The Slovak crown broke through 32 against the euro in afternoon trade to hit a new record high after the European Commission gave the country a green light on Wednesday to adopt the common currency next year.Slovakia will become the euro zone's 16th member and the second country from Eastern Europe's former communist bloc to join.The currency strengthened to 31.985 per euro above the previous high of 32.1 crowns hit earlier in the day before the European Commission announced its decision.

Eurosystem currency reserves down 0.1 bln euros to 153.3 bln in week to May 2

2008-05-06T07:41:00.001-07:00

FRANKFURT (Thomson Financial) - The European Central Bank (ECB) said net foreign currency reserves in the eurosystem fell by 0.1 billion euros to 153.3 billion euros in the week to May 2, compared with the previous week.Banknotes in circulation within the eurosystem -- comprising the ECB and the central banks of euro zone countries -- increased by 7.4 billion euros to 671.7 billion.Gold and gold receivables remained unchanged at 209.643 billion.

Canada Morning: C$ Up On Strong Data, Higher Oil Prices

2008-05-06T07:39:00.000-07:00

TORONTO (Dow Jones)--The Canadian dollar is higher early Tuesday, having at least momentarily broken with its earlier pattern of light, narrow range trading on a better-than-expected outcome for Canada's April Ivey Purchasing Managers' Index of manufacturing activity. The U.S. dollar was trading at C$1.0065 at 10:18 a.m. EDT (1418 GMT), from C$1.0118 at 8:00 a.m. EDT (1200 GMT) and C$1.0137 late Monday. The Ivey survey of purchasing managers achieved a reading of 57.6 in April, beating consensus estimates and causing the Canadian dollar to spike from the C$1.0140 area past the C$1.0100 figure. Prior to that, the currency had been locked in fairly tight dealings in the mid-C$1.0100s, as it consolidated Monday's improvement on the back of soaring world oil prices. High oil prices are seen continuing to lend some support to the Canadian dollar, though the offsets of high oil including a renewed downdraft on the U.S. dollar and shakier equity markets are also having some restraining effects on potential gains for the Canadian currency. While higher oil prices benefit Canada as a net oil exporter, fears that these higher prices could further erode U.S. and by extension Canadian economic performance have a somewhat countervailing impact on the Canadian dollar in the current environment. Most currency watchers believe that these competing influences will continue to limit potential movements for the Canadian dollar until at least Friday, when some fresh fundamental trading incentives emerge in the form of Canada's April employment and March merchandise trade reports. "Any gains for the Canadian dollar on the back of stronger crude oil prices are likely to be mitigated by position-squaring ahead of the Friday's dual releases," said Jack Spitz, director of foreign exchange at National Bank in Toronto. "For the moment, it's better bid, but the reaction is ultimately likely to be muted." Canadian bonds are slightly higher in light trading early Tuesday, with the benchmark 10-year bond yielding 3.58% from 3.62% late Monday. These are the exchange rates at 10:18 a.m. EDT (1418 GMT), 8:00 a.m. EDT (1200 GMT), and late Monday.
USD/CAD 1.0065 1.0118 1.0137
EUR/CAD 1.5682 1.5724 1.5707
CAD/JPY 103.57 103.19 103.43

Carry Trade On The Rise As Volatility Cools, Rate Differentials Improve

2008-05-04T12:03:00.001-07:00

Through there is growing concern as to how long high yielding currencies like the New Zealand and Australian dollars can keep their rates at record highs, interest in the carry trade has still improved over the past week. The DailyFX Carry Trade Index rose $296 since last week with help from a modest cooling in currency market volatility and a general improvement in the outlook for the yen crosses.

Trade1_5-2

• Carry Trade On The Rise As Volatility Cools, Rate Differentials Improve
• Fed And BoE Boost Risk Appetite By Widening Their Collateral Nets
• Caution Still In Place As Market Questions High Yielders Buoyancy

Through there is growing concern as to how long high yielding currencies like the New Zealand and Australian dollars can keep their rates at record highs, interest in the carry trade has still improved over the past week. The DailyFX Carry Trade Index rose $296 since last week with help from a modest cooling in currency market volatility and a general improvement in the outlook for the yen crosses.

There has been a tangible rebound in risk appetite over the past few weeks; and the carry trade has been one of the primary benefactors. Considering the thawing in credit markets recently, it seems that the cooperative effort by global central banks to revive liquidity is paying off. In fact, even with conditions improving, the Bank of England and Federal Reserve have upped their efforts to put financial markets on an even keel once and for all. Both the Monetary Policy Committee the Fed announced it they were widening their definitions of acceptable collateral for access their respective liquidity injections. These efforts must be potent indeed considering volatility has cooled and the carry basket has rallied over the past few weeks despite headlines of further writedowns from big banks and warnings from the BoE that falling UK commercial property values may trigger considerable defaults and another wave of massive losses for banks. And, while conditions seem to be improving for the carry trade, the mood is still one of caution. While pairs like USDJPY, USDJPY and GBPJPY have put in for a tentative trend change, the higher-end of the yield curve is actually starting to fall as traders expect the central banks with high benchmark rates will eventually be forced to ease like the Fed, BoE and BoC.

Falling Rupee May Add to India's Inflation, Rates, ICICI Says

2008-05-02T12:00:00.001-07:00

A weakening Indian rupee, Asia's second-worst performing currency this year, may quicken inflation and prompt the central bank to raise its benchmark interest rate, according to ICICI Securities Ltd.
The Reserve Bank of India may increase its repurchase rate by a quarter-percentage point for the first time in more than a year, said Prasanna Ananthasubramaniam, an analyst at the Mumbai-based unit of India's second-biggest bank by market value. The rupee has declined almost 3 percent this year as equity purchases by overseas funds slowed amid a global credit crisis and rising oil prices pushed import costs higher.
``The offset of a strong rupee isn't available to contain the pass-through of global prices. In such a scenario, we don't rule out a hike in the repo rate,'' Prasanna said in an interview yesterday. Further rupee weakness ``cannot be ruled out, adding to inflation risks.''
Central bank Governor Yaga Venugopal Reddy kept the benchmark rate unchanged at a six-year high on April 29. He instead told lenders for the second time in less than two weeks to set aside more cash as a proportion of their deposits to slow growth in money supply.
The rupee fell 0.8 percent the same day, the biggest decline in almost two months, after the bank said the current- account deficit will be ``marginally'' higher in the fiscal year through March and said prospects for growth stand ``trimmed.''
The local currency weakened 0.1 percent to 40.51 a dollar on April 30, according to data compiled by Bloomberg. Financial markets were closed yesterday for a holiday in Mumbai.
Oil, Deficits
An advance in crude oil prices to an all-time high of $119.93 a barrel this week spurred demand for dollars as refiners settled import bills, placing the rupee on course for its biggest weekly loss since the five-day period ended March 7.
India's trade deficit widened 45 percent in the year ended March 31 to $80.4 billion, the government said yesterday. The shortfall in the current account, a broad measure of trade and investment flows, widened 46 percent to $5.4 billion in the quarter through December from $3.7 billion a year earlier.
The rupee's 12.3 percent rally last year, the most in more than three decades helped cool inflation to a five-year low in October before flaring up to a 3 1/2-year high.
Slowing Growth
Asia's third-largest economy should be prepared to face ``potentially large'' outflows of capital as the global credit crisis, now in its 10th month, makes global investors more risk averse, the Reserve Bank said April 29.
Global funds, who bought a record $17.2 billion in Indian shares than they sold last year, have dumped a net $2.6 billion this year as the central bank expects economic expansion to slow to as low as 8 percent this fiscal year. Growth averaged a record 8.7 percent in the past five years.
``With inflows slowing down, higher outflows on the trade account are likely exerting pressure on the currency'' to weaken, Prasanna said. ``We attach a reasonable probability'' to an increase in the benchmark rate.
The currency may trade between 40 and 40.50 to the dollar in coming weeks, he said. The median forecast in a survey of 22 analysts compiled by Bloomberg is for the rupee to advance to 39.45 by year-end

Dollar Rises to Five-Week High on Below-Forecast Job Losses

2008-05-02T11:59:00.001-07:00

The dollar rose to a five-week high against the euro after a government report showed U.S. employers eliminated fewer jobs in April than economists forecast, indicating the labor market is weathering the economic slowdown.
The currency is headed for a second weekly gain versus the euro after the Federal Reserve cut interest rates on April 30 and said ``substantial'' easing since September would help foster growth. The yen fell against the Brazilian real and the South African rand as the jobs report encouraged investors to buy higher-yielding assets financed in Japan.
``It's pretty likely we've seen the lows in the dollar,'' said Robert Sinche, head of global currency strategy at Bank of America Corp. in New York. ``You've got a market that has been buying dollars, and certainly it got a nice reinforcement.''
The dollar increased 0.4 percent to $1.5411 per euro at 2:05 p.m. in New York, from $1.5475 yesterday. It touched $1.5361, the highest level since March 24. The dollar rose 0.8 percent to 105.25 yen, from 104.44 yesterday. It touched 105.70 yen, the strongest since Feb. 28. The euro rose 0.4 percent to 162.21 yen, from 161.60 yen.
Treasuries fell today on the payroll report, pushing the two-year note's yield to 2.54 percent, the highest level since January. Gold headed for a third weekly drop, its longest losing streak in a year, as the dollar's gain against the euro made the metal less attractive as a currency hedge. Gold futures traded in New York climbed 0.8 percent to $857.50 an ounce today.
Fed Rate Outlook
Interest-rate futures on the Chicago Board of Trade showed an 86 percent chance that policy makers will keep the fed funds target unchanged at 2 percent when they next meet June 25, compared with 80 percent odds yesterday. The balance of bets is for a decrease of a quarter-percentage point. The Fed cut the benchmark rate from 2.25 percent this week in its seventh reduction since September.
The dollar has risen 1.2 percent against the euro this week, its biggest rally since March, and has appreciated 3.6 percent from a record low of $1.6018 reached on April 22. It's the first time the dollar has posted two weeks of gains since December. The dollar rose 0.8 percent against the yen this week.
The yen fell more than 1 percent against the Brazilian real, the South African rand and the New Zealand dollar on speculation the payroll data led investors to resume carry trades, in which they get funds in a country with low borrowing costs and buy assets where returns are higher. The 0.5 percent target rate in Japan compares with 11.75 percent in Brazil, 11.5 percent in South Africa and 8.25 percent in New Zealand.
`Fed Is Done'
``This report reinforces that the Fed is done for the time being,'' said Alan Ruskin, head of international currency strategy in North America at RBS Greenwich Capital Markets Inc. in Greenwich, Connecticut. ``It reinforces all of the recent favorable trades, selling the yen.''
The dollar pared gains versus the euro after failing to break through $1.5340, where sell orders concentrated, according to Ruskin. ``The market is certainly very cautious not to push it too far,'' he said.
The pound was headed for a third weekly gain against the euro, the longest rally since May 2006, after the Bank of England said yesterday in its twice-yearly financial stability report that ``risk appetite will return gradually'' in coming months. Sterling increased 0.4 percent to 78.04 pence per euro, from 78.37 pence yesterday, and is up 0.9 percent this week.
The European Central Bank will cut its 4 percent main refinancing rate to 3.75 percent by the end of September and 3.50 percent by year-end, according to a Bloomberg News survey of economists.
Bund Spread
The yield advantage of two-year German bunds over comparable-maturity Treasuries decreased to 1.37 percentage points, the narrowest since February, making dollar-denominated assets more attractive to investors.
The Labor Department reported that U.S. payrolls shrank by 20,000 last month following a revised decline of 81,000 in March. The median forecast of 82 economists surveyed by Bloomberg News was for a drop of 75,000.
The U.S. Dollar Index, which measures the currency against six major counterparts, touched 73.698, the highest level since March 5. The index fell to 70.698 on March 17, the lowest since its 1973 inception.
``Buy the dollar!'' said Benedikt Germanier, a currency strategist at UBS AG in Stamford, Connecticut.
The U.S. currency increased 0.9 percent versus the Swiss franc and was up 0.7 percent against the South Korean won. It dropped 0.9 percent against the Brazilian real and 0.4 percent versus New Zealand's dollar.
Traders see the dollar will fluctuate less in the next several months. The implied volatility of options on the dollar against the most actively traded currencies declined to 10.4 percent today, the lowest since Feb. 28, according to data complied by JPMorgan Chase & Co. The volatility jumped to 14.5 percent on March 17, the highest since 1998.

India spot gold prices close 1.3 percent lower; revives domestic demand

2008-05-02T11:57:00.000-07:00

MUMBAI (Thomson Financial) - India spot gold prices closed 1.3 percent down, led by overseas leads, triggering domestic demand ahead of the festival and wedding season, traders said.
In London, gold slipped to a fresh four-month low of $844.90 an ounce in early afternoon trade after U.S. employment data came in better than expected, boosting the dollar amid hopes that the world's biggest economy could be turning a corner.
Most physical buyers took this opportunity to buy at lower levels, said a treasury official at India's state-run Corporation Bank.
The Indian festival of Akshaya Tritiya is due in India on May 7 and is considered to be an auspicious day for buying gold and silver.
Mumbai gold of 0.995 purity closed 145 rupees lower at 11,255 rupees per 10 grams, while gold of 0.999 purity closed 150 rupees lower at 11,310 rupees per 10 grams.
Silver of 0.999 purity closed 385 rupees lower at 22,330 per kilogram.

HIGHLIGHTS Outlook of US economic indicators to be released in the coming week

2008-05-02T11:56:00.000-07:00

WASHINGTON (Thomson Financial) - The following is a synopsis of US economic indicators to be released in the coming week, with forecasts compiled by Thomson's IFR Markets.
The coming week will be light with economic data compared to this past week. Among the most closely-watched numbers will be the ISM non-manufacturing index and the international trade deficit. Also in the week, there will be speeches by Federal Reserve Chairman Ben Bernanke, Fed Governor Randall S. Kroszner, and Kansas City Fed President Thomas Hoening.
MONDAY, MAY 5
The week will begin with the release of the Institute of Supply Management's non-manufacturing index, which in April is expected to have dipped to 49.3 from 49.6.
"In general, the economy is weakening and so you'd expect this number to remain below fifty and drop lower," said Jay Bryson of Wachovia. A level of 50 is considered the contraction/expansion threshold.
WEDNESDAY, MAY 7
Preliminary productivity in the first quarter is expected to have decreased to a 1.7 pct annual rate, below the 1.9 pct rate in the previous quarter.
Bryson pointed out that when the economy is in a downturn, output decreases, but because companies are slow to lay off workers, productivity ultimately increases.
"We're not looking for a huge decline in productivity, and it could keep unit labor costs relatively under control," he said. Preliminary unit labor costs are expected to have increased by 2.6 pct in the first quarter, the same rate of change as in the previous quarter.
Pending home sales in March are expected to have dropped to 83.8 from 84.6 in the previous month.
"Consumer sentiment plunged in March to the lowest level since the 1980 recession, suggesting growing concern about future financial prospects and the state of the economy," said economists from Lehman Brothers. "This should discourage new home purchases," they added.
Consumer credit is expected to have increased to 6.0 bln usd in March, up from 5.2 bln usd in the previous month. Economists say much of the credit will be in the form of credit cards.
Joel Naroff of Naroff Economic Advisors says consumer credit is hard to predict. "On one side consumers are pressured to spend less. On the other side, they may be forced to put expenses on credit card." Lately, credit cards are being used for every day expenses, like food and gasoline, which have increased in price, he said.
THURSDAY, MAY 8
Initial jobless claims are expected to have increased to 370,000 in the week ending May 3rd. This past week, claims increased 35,000 to 380,000.
Meanwhile, continuing claims are expected to have totaled 3.000 mln in the week ending April 26, above the previous week's four-year high of 3.019 mln.
Economists expect that wholesalers increased their inventories in March by just 0.5 pct, well below the 1.1 pct accumulation rate in the previous month.
"We believe that some unnecessary inventory building has occurred in the wholesale sector, forcing firms to cut production and liquidate stocks," said economists from Lehman Brothers. "However, a rise in commodity prices during the month is likely to boost the nominal value of wholesale stocks, offsetting some of this contraction and leaving overall wholesale inventory growth positive."
Wholesale sales are expected to have recovered in March, increasing 0.7 pct compared to a 0.8 pct decline in the previous month.

Where do you start if you want to learn Forex trading online?

2008-05-01T12:41:00.000-07:00

Well a good starting point is to look at just what Forex trading is and who the players in this market are. We should also think about just why you should be learning Forex trading and thinking about starting you own online Forex trading business.
Don't forget to check outour growing collection ofin-house Forex articles.
The Forex market (which is sometimes referred to as the FX market and for which the full title is The Foreign Exchange Market) was established as we know it today in 1971 following the demise of fixed currency exchanges. Forex currency trading is conducted around the clock, 5 days a week, and daily currency trades are worth in the region of $1.9 trillion US dollars. This means that the Forex the largest market in the world and puts the major stock markets very firmly into second place.
A world-wide market established to facilitate the buying and selling of currency, the Forex market involves large organizations, such as central governments, commercial companies and international commercial banks as well as smaller players such as brokerage houses and individual brokers.
There is no set location for the market (although there are major trading centers around the world in a number of cities such as London, Frankfurt, New York and Tokyo) but it is essentially an 'over-the-counter' market with the vast majority of trading being conducted by telephone and on the internet.
The exchange of currencies is a central element in supporting global trade and, as the major currencies such as the US dollar (USD), the British pound (GBP), the Euro (EUR), the Japanes yen (JPY) and others move against each other and the foreign currency exchange rate for any given pair of currencies changes, there is the opportunity to make money from currency exchanges.
The major players in the market take advantage of this by buying and selling in deals which often run into many millions of dollars, but the smaller players are also extremely active and often trade in deals of as low as one hundred thousand dollars. And, by trading on the back on the smaller players, individuals can get into the market with a lot less than that!
The fact that even small players can join this market means that, as long as you are prepared to take the time to understand the currency markets and to learn the skills of Forex trading, then, with a little bit of capital to invest, it is possible to enjoy an excellent income from online currency trading.
Despite the fact that you cannot trade on your own and will have to use the services of a Forex broker, you certainly don't need a fortune and many Forex brokers will now allow you to open an online Forex mini account with as little as $250.
The Forex market is a technical market and it does takes a while to come to grips with the basic principles underlying the currency markets, to develop the necessary skills in the use of some of the 'tools of the trade' (like technical and fundamental analysis tools) and to learn Forex currency trading online.
Despite this, you do not have to be an expert in the currency markets to profit from them. As long as you take the time to learn foreign exchange currency trading and put in a bit of effort it is quite easy to gain enough of an understanding to begin making money through Foreign trading online.
Foreign currency trading provides an excellent opportunity for the small investor to make money but learning to trade Forex is essential before heading out into the market.
Through a large and growing collection of articles covering everything from the history of foreign currency trading to fundamental and technical analysis, psychology and strategies, tools and software we aim to help you learn to day trade Forex quickly and easily.

What Is Online Currency Trading?

2008-05-01T12:40:00.001-07:00

Online currency trading or the foreign exchange (FOREX) provides an incredible opportunity for the average person.
1) You can set up a demo account for trading that will provide you with real time trading information. The feeds are real and the movements are real, this allows you to learn and tweak your trading style.
2) A new trader can start with a few hundred dollars. One BIG thing to consider is the leverage the FOREX gives you. A $300 account will enable you to control $60,000.00 worth of currency. That alone should peak your interest.
3) Successful Forex traders live a life style most people only dream about.
The foreign exchange averages 3.2 trillion dollars a day, which is more than stocks and commodities, combined. In addition, stocks have some pitfalls that are not present with online currency trading, such as insider trading or executives that "cook" the books.
Education is the key and the great thing is most of it is free to learn.
There are a few things you can do to start, first Google "forex" and you will see a lot of places that allow you to set up a free demo account. Next learn what technical analysis is and how to use it to your advantage.
In the event you need to ask some questions or have comments we are here to assist you. We are active traders, however, we are not brokers. So we will tell you our real opinion. Along with that you will have other traders placing their own experiences as well. So here is to learning forex.

Forex - U.S. dollar up sharply, extending gains after ISM manufacturing data

2008-05-01T12:28:00.000-07:00

LONDON (Thomson Financial) - The U.S. dollar was up sharply, extending earlier gains after a better-than-expected survey on U.S. manufacturing activity.The ISM manufacturing index held steady at 48.6 in April, still below the 50 level to signal continued contraction in the sector but beating forecasts for a decline to 48.0.The release gave market players further excuse to buy the U.S. dollar, taking the euro to a five-week low of $1.5440."The report was a real mixed bag, providing no fundamental basis for buying the greenback. Nonetheless, players used the report as an excuse to extend the overnight dollar rally," said Michael Woolfolk at the Bank of New York Mellon.The U.S. dollar has been gaining since last night's decision by the Federal Reserve to cut interest rates by 25 basis points, marking a departure from the aggressive monetary easing of recent months and prompting optimism that the worst of the credit crisis may be over."A lot of people believe the worst is over and the perception is that this will be the end of the rate cuts," said Mic Mills, a trader at TradIndex.com.Attention Friday will turn to the release of key U.S. jobs data, where another better-than-expected reading will allow the U.S. dollar to extend its gains further."If non-farm payrolls surprises tomorrow on the upside, the resulting dollar rally has more potential than recent history suggests," BNY Mellon's Woolfolk said.London 1519 GMT London 1106 GMTU.S. dollar yen 104.08 up from 104.03 Swiss franc 1.0490 up from 1.0440 EuroU.S. dollar 1.5439 down from 1.5533 pound 0.7819 unchanged yen 160.71 up from 161.60 Swiss franc 1.6196 down from 1.6220 PoundU.S. dollar 1.9746 down from 1.9862 yen 205.51 down from 206.60 Swiss franc 2.0707 down from 2.0733 Australian dollar U.S. dollar 0.9322 down from 0.9377 pound 0.4720 unchanged yen 96.98 down from 97.50

Dollar rises as markets consider end to rate cuts

2008-05-01T12:27:00.000-07:00

NEW YORK (AP) - The dollar gained strength Thursday amid mixed economic data following the Federal Reserve's signal that it might be done with rate cutting for the near term.The 15-nation euro dropped to $1.5432 in midday New York trading, down from the $1.5642 it purchased in New York late Wednesday. The British pound also slid to $1.9723 from $1.9893.The dollar rose to 104.56 Japanese yen, up from 104.17 late Wednesday.The Commerce Department said consumer spending edged up 0.4 percent in March, while the Institute for Supply Management said an index of manufacturing activity in April was 48.6 for April, unchanged from March. Both readings, while weak, were better than expected and offset the 1.1 percent March drop in construction spending and the larger-than-expected jump in weekly jobless claims to 380,000.By midday, the Dow Jones industrial average had jumped more than 150 points as investors took hope from a surging dollar and oil's fall back toward $111 a barrel.The Federal Reserve cut a key interest rate by a quarter-point Wednesday, a smaller move than the aggressive easing it undertook earlier this year. There were signs the Fed may believe it has done enough to prevent a deep recession.The Fed action pushed the federal funds rate down to 2 percent, the lowest level since late 2004. It marked the seventh rate cut by the central bank since it began easing credit conditions last September.The European Central Bank has left rates unchanged at 4 percent.Though lower interest rates can spur a nation's economy, they can weigh on its currency as traders transfer funds to countries where they can earn higher returns.In other midday New York trading, the dollar rose to 1.0500 Swiss francs from 1.0338 francs late Wednesday in New York, and soared to 1.0191 Canadian dollars from 1.0046.

Dollar jumps against pound in late trading

2008-04-29T22:21:00.001-07:00

NEW YORK (AP) - The dollar soared against the pound in late New York trading Tuesday night. The pound fell to $1.9678 from $1.9905.

Singapore Q1 unemployment rate rises to 1.8 percent on weaker U.S. demand

2008-04-29T22:18:00.001-07:00

SINGAPORE (Thomson Financial) - Singapore's unemployment rate rose to 1.8 percent in the first quarter from 1.6 percent in thefourth quarter as weaker demand from the United States forced companies to cut jobs, government data showed on Wednesday.The Ministry of Manpower said about 2,000 workers lost their jobs during the quarter, many of them from electronics manufacturing companies, which are seeing softer demand from consumers in the United States, a major export market.On a seasonally-adjusted basis, the jobless rate edged up to 2.0 percent in the first quarter from1.7 percent in the previous quarter, the ministry said.But overall employment in the city-state grew by 68,400 for the quarter as services andconstruction industries continued to hire workers.
($1 = S$1.36)

Bank of Japan leaves overnight call rate target unchanged at 0.5 percent

2008-04-29T22:17:00.000-07:00

TOKYO (Thomson Financial) - The Bank of Japan left its overnight call rate target unchanged at 0.5 percent for the 17th straight meeting on Wednesday, as widely expected.The central bank had wanted time to further assess how much the U.S. economy, one of Japan's most important trading partners, will slow down and whether the continuing credit crisis and housing market weakness in the U.S. will hurt global economic growth.The BoJ said it also needs to ascertain whether the Japanese economy can keep itself on track towards recovery despite emerging uncertainty about the corporate sector and surging costs of basic materials.The BoJ said all seven members of its policy board voted unanimously to leave the rate unchanged.After the decision was announced, the U.S. dollar traded flat against the yen at 104.09 yen earlier.The central bank will hold its next policy board meeting on May 19-20.

Dollar rises slightly against yen in late trading

2008-04-28T21:51:00.001-07:00

NEW YORK (AP) - The dollar slipped slightly against the Japanese yen, trading at 104.17 yen late Monday night in New York compared with 104.40 yen late Friday.Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Forex - Dollar comes off daily highs ahead of weekend

2008-04-27T11:02:00.000-07:00

LONDON (Thomson Financial) - The dollar paused in its rally of the past few days as investors took profits ahead of the weekend, although further gains may come next week if the U.S. Federal Reserve suggests it is done cutting interest rates.The greenback has benefited from speculation that the Federal Reserve's expected rate cut next week may well be its last. With equity markets stabilised and a growing sense that the bulk of subprime-related writedowns have been revealed, the Fed may opt for more caution over inflation."Hawks like Richard Fisher and Charles Plosser have argued that the Fed will have to differentiate between a policy supporting liquidity conditions and its interest rate policy designed to steer the output gap in order to keep inflation near desired levels," said Hans Redeker, head of forex strategy at BNP Paribas.The Fed is widely expected to cut rates by another 25 or 50 basis points next week, and the focus will be on whether rate-setters feel the need to pause after that or stop cutting rates altogether.The softening in the dollar from its highs in the morning was also triggered by a downward revision in the University of Michigan consumer confidence indicator.It was revised down to 62.6 in April from the preliminary reading of 63.2 and 69.5 in March. The data is at a 26-year low and also revealed that nine in 10 consumers believe the U.S. economy is in a recession.However, the one-year inflation expectations rose to 4.8 percent in April from 4.3 percent in March."The Fed watches consumer inflation expectation closely. This report shows enough evidence for the fed to end rate cuts," said Myra DSouza at IFR Markets.The euro was still broadly weaker, particularly against the pound, as softer economic data from the euro zone -- with the German Ifo indicator posting a surprise fall on Thursday and M3 money supply easing beyond expectations Friday -- has cast doubt on the ability of the region to 'de-couple' from the U.S. recession and global financial crisis.In the United Kingdom, the pound was stronger after GDP in the morning morning came roughly in line with expectations. First-quarter growth was 0.4 percent, a three-year low and down significantly from the 0.6 percent in the previous quarter, but still not as bad as some investors were fearing.This pushed traders to buy back into the pound on the view that the Bank of England is unlikely to cut interest rates next month.This view was reinforced later by a YouGov/Citigroup survey that showed inflation expectations have continued to rise, to 3.8 percent in April, up sharply from 3.6 percent in March and 3.1 percent in February."The further rise in inflation expectations in April is a blow to hopes that the Bank of England will trim interest rates by a further 25 basis points as soon as May," said Howard Archer at Global Insight.London 1440 GMT London 1115 GMT U.S. dollar yen 104.30 down from yen 104.42Swiss franc 1.0343 down from Swiss franc 1.0390EuroU.S. dollar 1.5627 up from U.S. dollar 1.5586yen 162.99 up from yen 162.74Swiss franc 1.6164 down from Swiss franc 1.6194pound 0.7871 up from pound 0.7859PoundU.S. dollar 1.9853 up from U.S. dollar 1.9831yen 207.07 unchanged yen 207.07Swiss franc 2.0536 down from Swiss franc 2.0604Australian dollar U.S. dollar 0.9321 down from U.S. dollar 0.9333pound 0.4695 down from pound 0.4706yen 97.17 down from yen 97.40carlo.piovano@thomsonreuters.comcp/cp/kf1
COPYRIGHTCopyright Thomson Financial News Limited 2008. All rights reserved.

Dollar turns mixed in the face of weak consumer data

2008-04-27T11:00:00.000-07:00

The dollar was mixed against major currencies Friday after a consumer sentiment reading fell to its lowest level in more than 25 years.The pound rose to $1.9826 in late New York trading from $1.9755, while the Japanese currency was unchanged at 105.26 yen.The euro slid to $1.5635, down from $1.5686 Thursday. The 15-nation currency has slid since it reached the latest in a string of records on Tuesday, breaking through the $1.60 mark for the first time and rising as high as $1.6018.On Thursday, the euro lost more than two cents after a downbeat German business confidence survey and an unexpected drop in American claims for jobless benefits.The Reuters/University of Michigan released its consumer sentiment index Friday, which fell to 62.6 for April from 69.5 a month earlier. It was the lowest reading since the early 1980s.The dollar has been weighed down recently by a combination of gloomy U.S. economic data and high European inflation.That has fueled expectations that the Federal Reserve will cut interest rates yet again while the European Central Bank leaves rates unchanged -- or even raises them, a possibility deflated by Thursday's German business confidence survey."We are just seeing a continuation of upward adjustment for the dollar on a combination of exhaustion of the euro surge, and market expectations that there may not be a lot more easing on interest rates by the Fed," said Bob Sinche, head of global foreign exchange strategy at Bank of America Corp.UniCredit analysts said in a research note that "the U.S. dollar recovery across the board ... looks fairly excessive at this stage." They noted that "nothing has really changed on the current economic scenario."In other trading Friday, the dollar edged down to 1.0347 Swiss francs from 1.0356 Swiss francs, but rose to 1.0178 Canadian dollars from 1.0139 Canadian dollars.
by Associeted Press

Forex - Dollar rangebound in Tokyo but with firm bias on improved jobs data

2008-04-24T20:20:00.002-07:00

The dollar moved within narrow ranges against other currencies in Tokyo on Friday morning but showed a firm bias following steep gains overnight, with buying of the U.S. currency encouraged by better-than-expected jobless claims data.Emerging expectations for an end to a rate-cutting cycle in the United States also aided sentiment for the U.S. unit.The Labor Department data released Thursday showed that claims for unemployment benefits fell by 33,000 last week to 342,000. Economists had been expecting claims would rise by 3,000."Given the recent stable movement on the global financial markets, receding concerns about the credit crunch and surging commodity prices, there is an emerging view that the Federal Reserve Board may end the rate-cutting cycle after one more rate cut in the coming week," Tokai Tokyo Securities chief economist Mitsuru Saito said.At 9:30 a.m. (0030 GMT), the dollar was at 104.32 yen, compared to 104.20 to 104.30 yen in late New York trade. The euro was at 1.5685 dollars, compared to 1.5678 dollars to 1.5688 dollars.Meanwhile, the Ifo research institute's April business climate index for Germany showing a fall to 102.4 from 104.8 in March was well below analysts' forecasts of a decline to 104.3, dampening the market's view that the eurozone economy has "decoupled" from the U.S. The survey also dashed expectations that the eurozone economy would weather the credit crunch and offer some room for the European Central Bank to hike interest rates."The technical picture for the euro/dollar has greatly deteriorated after heavy selling took place during the European and U.S. sessions. Selling in Europe was sparked by a weaker-than-expected German Ifo that threw very cold water on the notion that the ECB was close to pulling the tightening trigger," Thomson/IFR analyst John Noonan said.The dollar also moved in a tight trading range against the yen, lacking a clear lead."If there are more bad news from Europe, or good news from the U.S., the dollar may test the strength of its resistance band of 104 to 105 yen," NTT Smarttrade director Takashi Kudo said."And if this resistance lines are breached, (the dollar) may jump towards the 108 yen level," he said.The market is also closely watching if the recent bounce-back in the dollar will revive yen-carry trades -- the practice of raising funds in Japan where funding cost is comparatively cheaper and re-investing them in high-yielding currencies."Japanese retail investors normally become more active in trading foreign exchange currencies when the yen weakens," Kudo said.Tokyo 9.30 a.m. (0030 GMT)U.S. dollar yen 104.32Swiss franc 1.0353EuroU.S. dollar 1.5685yen 163.65Swiss franc 1.6241pound 0.7947PoundU.S. dollar 1.9733yen 205.84Swiss franc 2.0428Australian dollar U.S. dollar 0.9393pound 0.4759yen 97.95

Dollar rises against Swiss franc in late trading

2008-04-24T20:20:00.001-07:00

NEW YORK (AP) - The dollar jumped to 1.0345 Swiss francs late Thursday night in New York, up 1.0158 Swiss francs the previous night.

Indian Rupee Falls on Demand for Dollar

2008-04-24T20:19:00.001-07:00

The Indian rupee declined today to its monthly minimum level on the Forex market as the domestic companies had to purchase more U.S. dollars to pay for the imports, including oil.
It was the second bearish day for the rupee, which is under pressure from the widening current account deficit (which is a great problem for another Asian currency — South Korean won). Imported goods prices, including oil and commodities, rise sharply spurring the demand for the dollars and creating a vast offer of rupees on the market.
Country’s overall imports rose 30.5% in February, while oil imports increased 39.5% that month. Trade balance deficit in February rose to $4.229 bilion according to the April 1st report.
USD/INR rate rose to as high as 40.128 (its highest level since beginning of April) on Forex market today, it retreaded slightly then and closed at 40.055.

Forex - U.S. dollar slightly higher vs euro Sydney morning, weaker vs yen

2008-04-22T22:08:00.001-07:00

SYDNEY (Thomson Financial) - The U.S. dollar was trading slightly higher against major currencies mid-morning on Wednesday, partially recovering from overnight losses against the euro when expectations grew that the next move by European Central Bank (ECB) may be to hike rates.At 11:10 a.m. (0110 GMT), the dollar was at 103.01 yen from 103.03 yen in late trade in New York. The euro was at $1.5976 from $1.5995 in New York.Overnight, the euro traded to a fresh all-time high above $1.6000 at $1.6020 after another round of hawkish comments from ECB officials and a report saying that the ECB bias has turned more hawkish and may be forced to tighten again.The officials highlighted that lowering inflation remains their number one aim, despite the slowing growth in the region and financial market turmoil.These events were followed by another weak U.S. housing number for March and comments from Federal Reserve member Richard Fischer saying that he saw a prolonged period of anemic growth.John Noonan, a senior foreign exchange analyst at Thomson Reuters IFR Markets, said with the euro finally breaking through $1.60 overnight the market is now focused on possible intervention by the ECB."If the move is sustained it is likely to induce more verbal intervention from Eurozone officials," Noonan said.But, he said, verbal intervention is unlikely to discourage the market as there was a subtle shift in central bank expectations earlier in the week. "On Friday the consensus was that the Fed was just about done easing and the ECB might have to start easing some time later in 2008. This morning the popular view is that the ECB might have to hike one more time and the Fed might not be finished after they ease 25 basis points next week," Noonan said.He said regional central banks are continuing to buy the euro on dips against the dollar, which makes those holding long euro positions that much safer.In Asia today, Noonan said the big event will be the release of Australian first quarter consumer price index inflation data, to be released at 11:30 a.m. (0130 GMT).The Reserve Bank of Australia (RBA) has already signalled it expects a higher annual rise of about 4.0 percent in the headline CPI, while underlying measures of inflation will also be much greater than the 2-3 percent range the central bank aims to keep annual inflation within.Economists don't expect the RBA to hike rates next month if the CPI comes in around the expected level, as recent hikes to take the central bank's cash target rate to 7.25 percent are already beginning to cool domestic demand.But, Noonan said, a high number might induce the market to try and take out the 0.9500 level again, with cries of "parity" against the U.S. dollar growing louder again.At 11:10 a.m. the Australian dollar was at 94.62 U.S. cents.Sydney 11:10 a.m. (0110 GMT)U.S. dollar yen 103.01 yenSwiss franc 1.0038EuroU.S. dollar 1.5976yen 164.615 Swiss franc 1.6037pound 0.8003PoundU.S. dollar 1.9963yen 205.642Swiss franc 2.0042Australian dollar U.S. dollar 0.9462pound 0.4739yen 97.4250New Zealand dollar U.S. dollar 0.7977

CAD Down before Central Bank Meeting

2008-04-22T07:47:00.001-07:00

The Canadian dollar was falling slightly yesterday and today against the other world currencies as the traders expected the interest rate decision of the Bank of Canada monetary policy meeting, which is scheduled for 22nd of April.

The total drop of the Canadian dollar (or so called Loonie) against the U.S. dollar this year is at 1.6% after a 17% gain last year. The drop increased this week as the Bank of Canada is expected to lower the key interest rate from 3.5% to 3.0% on its meeting today. The current interest rate in U.S. is 2.25%.

The market is expecting not only a 50 basis point cut in Canada, but also a statement that will support confidence in further cuts by the BoC.

The last interest rate cut was performed on March 4 — it was reduced from 4.0% to 3.5% and the statement signaled that the central bank has now entered a cutting cycle. The present consumer inflation rate in Canada is quite low, thus allowing more loose monetary policy.

USD/CAD rose from 1.0064 to 1.0072 today on Forex, while CAD/JPY pair declined from 102.59 to 102.37.

Thomson Financial Europe AM at a glance share guide: Stocks, oil mixed

2008-04-21T22:03:00.000-07:00

Index Change Percent change
*DJIA 12825.02 -24.34 -0.19
*Nasdaq 2408.04 +5.07 +0.21
*S&P 500 1388.17 -2.16 -0.16
Nymex crude
for May $117.48 +$0.79
10 yr US
treasury 3.73 percent
* Monday's close
STOCKS: Wall Street had a mixed performance Monday as investors regained a cautious stance after disappointing news from Bank of America Corp., which said its first-quarter earnings fell 77 percent on write-downs and widening credit losses, and Midwest bank National City Corp., and after oil prices hit fresh highs.
Shares of National City dropped after the Midwest bank said it got a $7 billion cash infusion from equity investors, lowered its dividend and posted a $171 million loss for the first quarter.
BONDS: Bond prices dipped as investors speculated that the Federal Reserve would follow the Bank of England's lead in using means beyond cutting interest rates to ease tightness in the credit markets.
FOREX: The dollar was mixed Monday against other major currencies and slid near a new low against the euro after Bank of America's worse-than-expected first-quarter earnings. The 15-nation currency rose as high as $1.5946 and fetched $1.5916 in late New York trading, up from $1.5805 Friday and not far off its all-time high of $1.5982.
The pound fell after the Bank of England, in a bid to address fallout from the U.S. subprime mortgage crisis, announced a 50 billion-pound plan to allow banks to swap mortgage-backed securities for Treasury bills. The pound fell to $1.9798 against $1.9940 late Friday.
The dollar slipped to 1.0072 Swiss francs from 1.0182 Swiss francs but was unchanged at 104.17 yen.
OIL: Crude oil set a record for the sixth day in a row -- this time closing above $117 a barrel -- after an attack on a Japanese oil tanker in the Middle East rattled investors.
METALS: Gold futures rebounded from Friday's sharp decline after the dollar weakened against the euro, enhancing the metal's appeal as a hedge against inflation.
Gold for June delivery rose $2.40 to $917.60 an ounce on the Nymex, after earlier rising as high as $931.90.
EVENTS:
April Richmond Fed Survey
Yahoo Inc. Q1 results. EPS forecast $0.11 versus $0.10
ASIA SUMMARY: Stocks fall; oil steady near record highs
Index Change Percent change
Nikkei 225 13570.29 -126.26 -0.92 (0418 GMT)
S&P/ASX 200 5551.20 -49.10 -0.88 (0419 GMT)
Straits Times 3151.58 -19.51 -0.60 (0219 GMT)
Hang Seng 24492.21 -229.46 -0.93 (0419 GMT)
Seoul Composite 1788.77 -11.71 -0.65 (0420 GMT)
BSE Sensex 16597.53 -141.80 -0.85 (0425 GMT)
usd-yen 103.22 -0.03 -0.03 (Intra-day)
10-year JGBs 1.46 percent +0.015 +1.04 (Intra-day)
Brent North Sea $114.50 +0.07 +0.06 (Intra-day)
crude for June
STOCKS: Asian stocks fell Tuesday, led by financials and technology companies as investors weighed disappointing earnings from Bank of America and Texas Instruments and a fresh spike in crude prices to a record close to $118 a barrel.
BONDS: Japanese government bond prices were flat to slightly lower this morning as investors took a breather from the recent unwinding of flight-to-quality purchases amid a lack of strong leads, with U.S. stocks closing mixed.
FOREX: The U.S. dollar was softer against other major currencies in Sydney morning trade after slipping overnight on concerns about the health of the U.S. financial sector.
OIL: World oil prices were steady in Asian trading on Tuesday after once again crashing through record highs and as producers warned sky-high values are here to stay.
New York's main oil futures contract, light sweet crude for delivery in May, fell 5 cents to $117.43 per barrel. The benchmark contract had struck a new peak in intraday trading of $117.76 before closing at a record $117.48 on Monday at the Nymex.
METALS: Gold stayed firm in early afternoon trade Monday, while other precious metals edged lower. Copper drifted lower, in line with most other base metals, with only tin bucking the trend to stay firm.
EVENTS:
Japan 20-year government bonds auction
Energy Resources of Australia annual general meeting
Singapore's CapitaMall Q1 results
Malaysia mid-April forex reserves
British American Tobacco Malaysia Bhd. Q1 results
Hong Kong March CPI
Hong Kong-listed Beijing Media FY results
China Shipping Development Q1 results
Hong Kong-listed Lingbao Gold FY results
Hong Kong-listed Sinoma FY results
Changsha Zoomlion Heavy Industry FY results
China's Wuhan Iron & Steel FY results
China's Youngor Group FY results
China's Pingdingshan Tianan Coal Mining FY results
Taiwan March unemployment
India's Ranbaxy Laboratories Q1 results
India's Biocon Q4 results
EUROPE SUMMARY: Stocks close lower; oil slips
Index Change Percent change
*FTSE 6052.97 -3.58 -0.06
*DAX 6786.55 -56.53 -0.83
*CAC 4910.35 -51.34 -1.03
pound-dollar 1.9838 -0.0128 (Intra-day)
euro-dollar 1.5920 +0.0174 (Intra-day)
Brent
crude(June) 113.57 -35 cents (1514 GMT)
* Monday's close
STOCKS: Europe's leading shares ended lower Monday, tracking weakness on Wall Street, with banks in focus after Bank of America numbers disappointed and amid U.K. cash calls moves, while investors also digested a big batch of earnings news.
Banking issues were a feature once again after the Bank of America earnings disappointment in the afternoon and after a muted response to news from the Bank of England of a 50 billion pounds bailout plan for lenders.
Meanwhile, French advertising group Havas is expected to unveil first quarter organic sales growth before the market opens on Tuesday, while Banco BPI S.A.'s first quarter net profit is expected to fall, mainly due to weak domestic operations and a decrease in trading income.
FOREX: The Bank of England's latest move to help ease the strains faced by the banking sector met with a lukewarm response on currency markets, with the pound continuing under pressure.
BONDS: European government bonds were higher, continuing to benefit from a decline in risk appetite after Wall Street opened lower on Monday.
In the U.K., gilts were outperforming their European counterparts, as doubts were raised on the effectiveness of the Bank of England's plans to allow UK banks to swap mortgage-backed assets for government bonds in an attempt to restore confidence in the banking system.
OIL: Oil on Monday eased slightly from record levels reached in the morning on profit taking and as some energy experts said oil supply was comfortable.
Prices remained well underpinned, however, by supply disruptions in Nigeria and Scotland, dollar weakness and OPEC's refusal to provide the world with more oil amid record prices.
Members of the Organization of the Petroleum Exporting Countries and oil experts kicked off an energy conference in Rome over the weekend, from which mixed signals over the future supply/demand picture have emerged.
METALS: Gold stayed firm in early afternoon trade Monday as the softening dollar and stronger oil continued to lend support, but gains were capped by risk aversion after Friday's price slide.
At 1334 GMT, spot gold was trading at $920.28 an ounce against $912.30 in late New York trade on Friday. Platinum was trading at $2,024 an ounce against $2,042 in late trade on Friday, while silver eased to $17.64 an ounce against $17.82, and palladium slipped to $448 an ounce from $456.
Copper drifted lower, in line with most other base metals, in directionless trade midafternoon, with only tin bucking the trend to stay firm after rallying to a new record high this morning amid fears of a supply shortfall this year.
Copper prices remain underpinned by the prospect of a supply shortfall as inventories dwindle and a strike at major Chilean producer Codelco goes through a sixth day.
EVENTS:
UNITED KINGDOM
BoE's Besley speech in London
Associated British Foods H1 results
Connaught H1 results
Game Group FY results
Bradford & Bingley AGM/trading statement
Moneysupermarket.com Group AGM
LogicaCMG (conclusions of business review undertaken under new CEO Andy Green)
AUSTRIA
Verbund Q1 results
BENELUX
Akzo Nobel AGM
Wolters Kluwer AGM
ING AGM
Macintosh Retail Group AGM
Vopak Q1 trading statement
LogicaCMG business review presentation
Exmar FY annual report published
Euronav Q1 results (after market closes)
EASTERN EUROPE
Polish March core inflation data
Polish March unemployment data
Sistema's Sitronics EGM
EUROPEAN UNION/EURO ZONE
ECB main refi result (0915 GMT)
ECB-European Commission conference "The safety and efficiency of post-trading arrangements in Europe" (day 2 of 2); speakers include Peter Praet of
National Bank of Belgium
EU's Kroes speech at European Consumer Organisation dinner, Strasbourg
FRANCE
Axa AGM
Havas Q1 sales
Saint-Gobain Q1 sales (after market close)
Nexans Q1 results
Haulotte Q1 sales, AGM
Gecina AGM
CNP Assurances AGM
L'Oreal AGM
GERMANY
Puma AGM
EADS CEO Gallois to speak at German Foreign Policy Society
Buba's Remsperger to speak at Wiesbaden conference "Foreign Trade in Times of Globalisation - Possibilities and Limits of Statistical Measuring"
GREECE
Greek 3-year bond auction
ITALY
March non-EU trade
Bank of Italy quarterly report
Sogefi Q1
PORTUGAL
Banco BPI Q1 results; press conference in Porto
Anacom seminar with chairman Amado da Silva
SCANDINAVIA
Finnish March labour force survey
FOEX Pulp & Paper price statistics
Alfa Laval Q1 results
Svenska Handelsbanken Q1 results
MTG Q1 results
Kone Q1 results
Kesko Q1 results
Kone Q2 results
Norsk Hydro Q1 results
Renewable Energy Corp. Q1 results. EBITDA forecast 711 million crowns versus 869 million; sales 1.717 billion crowns versus 1.616 billion
Subsea 7 Q1 results
Autoliv Q1 results
Sydbank Q1 report
SPAIN
Telefonica AGM
Acerinox S.A. Q1 results
SWITZERLAND
March sales surplus
March watch exports
Logitech FY results
Actelion Q1 results
Syngenta Q1 sales

Canada Afternoon: C$ Dn On Profit Taking Before BOC Rate Call

2008-04-21T13:23:00.000-07:00

TORONTO (Dow Jones)--The Canadian dollar ended moderately lower Monday after flirting with parity in earlier trading and then retreating as market players took profits ahead of the Bank of Canada's interest rate announcement Tuesday. The U.S. dollar was trading at C$1.0071 at 3:39 p.m. EDT (1939 GMT), from C$1.0044 at 8:00 a.m. EDT (1200 GMT) and C$1.0055 late Friday. The U.S. dollar dropped to a low of C$1.0000 in morning trading, according to electronic trading system EBS, but rebounded in subsequent dealings, hitting the C$1.0080 area before paring its gains slightly. Some market participants appeared to be profits on the Canadian unit's earlier strength ahead of the Bank of Canada's interest rate announcement Tuesday, said Steve Butler, director of foreign exchange at Scotia Capital. "Obviously, we've got the Bank of Canada tomorrow, so I think a few people might be just squaring up some stuff before we see exactly what the bank does," Butler said. The market is positioned for a 50-basis-point easing in the bank's overnight target rate, taking the benchmark rate to 3.00%. But there is some conjecture the bank could only ease rates by 25 basis points as market conditions appear to stabilize. "It seems like a few people are scratching their heads, saying 'Do we really need to go 50?'," Butler said. Strength in commodity prices, concerns about inflation in other jurisdictions, and the resilience of stock markets are all developments that call in to question somewhat the need for a 50-basis-point cut, he said. A more restrained quarter-percentage-point cut could prompt a sharp rebound in the currency, Butler said. A report from Dustin Reid, currency strategist at ABN Amro in Chicago, said a 25-basis-point ease would likely have the Canadian dollar bid and would likely be enough to push the U.S. dollar below parity with its Canadian counterpart, at least in the short-term. "Of course, much depends on the statement and not only the headline movement. Another dovish statement along the same lines as the March 4 statement coupled with a 50-bps ease would likely get (the Canadian dollar) significantly offered," Reid wrote. A 50-basis-point cut with a less dovish statement is a more probable combination, he wrote. Whatever transpires Tuesday, the U.S. Canadian dollar pair will likely still trading in a well defined trading into the coming sessions, Scotia's Butler said. "We're pretty well smack dab in the middle of it now, and we could probably trade all the way down to C$0.9700, and people would still be unconvinced anything's changed," he said. Support is located around C$0.9980-90, and a break below that would likely inspire fresh Canadian dollar buying, Butler said. Resistance is around C$1.0280, with less significant resistance around the 200-day moving average at C$1.0085, he said. "We've been trading up and down through that average a lot, so I'm not giving it too much weight," Butler said. These are the exchange rates at 3:39 a.m. EDT (1939 GMT), 8:00 a.m. EDT (1200 GMT), and late Friday. USD/CAD 1.0071 1.0044 1.0055
EUR/CAD 1.5996 1.5977 1.5898
CAD/JPY 102.83 102.87 103.25

EUR/USD Comes Closer to 1.6000

2008-04-20T12:45:00.001-07:00

The U.S. dollar fell down to another historical minimum level against the euro today, as the strong technical resistance has been breached and the fundamental economic statistics in U.S. has failed to keep the USD up on the Forex market.
Apart from the bad data from the U.S. housing sector and the commercial crude oil inventories, additional fundamental pressure was applied on the dollar from the Eurozone CPI report today. Consumer prices grew 3.6% (year-to-year) in March there, eliminating the chances for the soon interest rate cut by the ECB.
From the viewpoint of the technical analysts, the current situation with EUR/USD on Forex isn’t surprising too. The euro tried to break the major support level around 1.5910 three times before today. And after it finally did it today, the currency pair soared to the new absolute maximum at 1.5968.
As of 15:48 GMT EUR/USD is trading near 1.5953 and is ready to climb to 1.6000. Thursday will be last day this week with the important U.S. economic releases, so it will be a very important day for the Forex traders, as it will probably show the strength of the current bullish trend on EUR/USD.

Turkmens Scramble To Sell Dollars As Devaluation Fears Grow -AFP

2008-04-19T14:14:00.001-07:00

ASHGABAT, Turkmenistan (AFP)--Turkmens are lining up to sell their dollars in the gas-rich Central Asian state as rumors fly of a possible devaluation. Hundreds waited in the rain Friday to cash in their dollars before the feared devaluation, from the current fixed rate of 20,000 manats to the dollar. "There are rumors everywhere. One person says that the new course will be TMM6,250, another TMM16,000, others say TMM12,000 (to the dollar). People are hurrying to sell their dollars," said Svetlana, 30, who asked for her last name not to be used. The scenes are signs of change - tough changes for many - in the energy-rich former Soviet state. Exchanges have limited the amount that each person can change, but Turkmens have worked out how to get around the limitations. Known for its secrecy, the Turkmen government has said nothing about the currency fears, and local media, controlled by the state, has remained equally silent. "It is all speculation," said an employee of the state bank. Until January, the official dollar rate was TMM5,200 a dollar - a rate unchanged for 10 years, most of them under the reclusive leader Niyazov who closed the country off from the world. New President Gurbanguly Berdymukhamedov, who took over in December 2006 after Niyazov's death, fixed the rate at TMM20,000 to the dollar at the beginning of the year as he begins to implement reforms. But by Friday, the manat had sunk to TMM17,500/dollar on the black market. The queues to sell dollars show how ordinary Turkmens are wary about the economic changes in the country under the new regime. In February, gasoline prices soared eight times higher, having previously remained unchanged since 1993. The government only gave 24 hours notice before the price increase, causing huge queues at gasoline stations throughout the country.

Overall issuance in Japan securitization market down 30 pct in 2008 - S&P

2008-04-18T07:54:00.000-07:00

MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services said it has seen a sharp fall in the number of securitized transactions rated and its issuance amount during the first quarter 2008 as compared to last year, given that investors are taking an increasingly cautious stance toward structured finance transactions across the world.

Securitization transactions worth 1.1136 trillion yen have been rated in Japan in the first quarter January 2008 to March 2008, marking a 35.8 percent decrease from the previous year. And, the number of securitized transactions rated by S&P fell to 35, down about 30 percent in this period.

There have been no reports of mortgage loan defaults spiking up in Japan, and there is no observed deterioration in the performance of securitization transactions exposed to residential mortgage loans, said S&P.

But the number of new ratings assigned to securitization transactions has also seen a fall in the first quarter of 2008, said S&P, adding that the issuance amount of asset-backed securities (ABS) and commercial mortgage backed securities (CMBS) transactions decreased by about half, and that of the residential mortgage backed securities (RMBS) transactions fell about 30 percent from the previous year.

The performance of RMBS deals backed by subprime loans in the U.S., and those of collateralised debt obligation (CDO) transactions that incorporate such RMBS deals have worsened and their prices have fallen, added S&P.

In contrast, the issuance amount of CDO transactions rated by S&P increased in the first quarter, because of the launch of a securitization program in February 2008 for loan receivables extended to government-related entities.

Data supports US dollar

2008-04-16T21:21:00.000-07:00

The US dollar was stronger versus the euro and the yen on the news that wholesale prices were up more than expected in the United States and on an unexpected expansion of manufacturing in the New York region in April, lowering the chances of a large interest rate cut from the Federal Reserve this month.
The New York Federal Reserve reported that manufacturing in the region was at 0.6 in April, up from minus 22.2 in March in the face of expectations that it had actually contracted further.
Meanwhile, the Labor Department reported that wholesale prices were up by 1.1 percent in March, mostly on food and energy prices since core inflation that excludes those categories only rose by 0.2 percent.
However, after crude oil prices soared to a new record above $113 per barrel, the greenback lost some of its gains on the euro.
At just before 11 a.m. in New York the dollar traded at $1.5802 to the euro while it took ¥101.3800 to buy a dollar.
The pound dropped to an all-time low versus the euro at 80.64p after the Royal Institution of Chartered Surveyors reported that the number of agents and surveyors reporting a drop in house prices was up in March.
The new data shows that 78.5 percent of agents and surveyors reported that housing prices fell in March versus 65.7 percent who reported falling rather than advancing prices in February.
The news brought with it a greater chance of more interest rate cuts in the UK.
At last report in New York, the pound was trading at 80.46p to the euro while it cost $1.9640 to buy a pound.
The surge in crude oil prices to a new record sent the Canadian dollar higher versus the greenback, to C$1.0182 to the dollar at nearly 11 a.m. in New York.

Pound, US dodllar at new lows versus euro

2008-04-16T21:20:00.000-07:00

Both the US dollar and the pound touched all-time lows versus the euro on Wednesday on reports that inflation in the Eurozone was up last month.
At 3.6 percent, Eurozone inflation was at its highest in nearly 16 years, decreasing the likelihood that the European Central Bank will cut interest rates and raising the possibility that rates could be increased.
The greenback touched a record low at $1.5969 to the euro and was trading at $1.5953 to the shared currency at around 11:30 a.m. in New York, while the pound hit a record low at 80.76p to the euro at the same time.
The dollar was hurt by new data showing that housing starts were down 11.9 percent in March in the US from February’s levels, the lowest since March 1991.
The US currency was also lower versus the yen, to ¥101.5250 in late morning trade in New York, while the euro gained on the yen to ¥161.9627 and the pound traded at ¥200.5424.
The Norwegian krone gained on the euro as oil prices hovered around record highs, trading at kr7.9059 to the euro at late morning in New York.

Euro Flies Through 1.5900 As CPI Stays Hot - Can it Hit 1.60?

2008-04-16T08:04:00.000-07:00

Hotter than expected CPI data out of the Eurozone propelled the euro through the 1.5900 level in early European trade as focus returned to inflation which will likely continue to dictate a restrictive monetary policy from the ECB for the time being. The data printed at 3.6% versus 3.5% as food energy and clothing costs all rose more than expected. With ECB mandated to control price pressures rather than manage growth, today’s number essentially assured the market that Mr. Trichet and company will remain hawkish keeping rates at 4% for the foreseeable future.The policy of the ECB stands in stark contrast to Fed’s actions. US monetary officials saddled with a massive credit crunch and a serious recession in the housing sector that looks to spread to the economy as a whole, have basically ignored the inflationary numbers, persistently lowering US rates since last year. As result the EURUSD, gain wiht Forex; make it with account manager; rallied continuously on interest rate differentials and now stands within striking distance of the 1.6000 level. The question going forward is just how much momentum will the pair have if it breaks through 1.60? Currency markets always tend to take prices to extremes, and if monetary officials do not intervene then the possibility of a run on the dollar becomes quite real. Therefore, the 1.60 level may prove to be the key battle ground between the bulls and the bears that may determine the near term direction for the pair. For the time being the EURUSD is trading on pure momentum and only a combination of hotter than expected US CPI data and better than forecast Housing and Industrial Production reports could curtail its ascent. If US economic data shows a modicum of strength, the market may rethink its dovish stance on Fed policy. If, on the other hand, today’s numbers prove to be weak, the EURUSD could take out 1.60 before the day is done.

Know when to trade forex

2008-04-16T08:02:00.001-07:00

Know when to trade forex. This is one of those forex trading tips that are really worthwhile. Knowing a little bit more about forex trading hours -what times of the day and week provide the best forex trading opportunities - will definitely save you some insignificant trades. Although forex trading is available 'round the clock, this doesn't mean that each hour provides equal opportunities. Sometimes, it's better to abstain from trading than to trade and lose. With Finotec, you will learn when are the best times to trade and when it is best to open a position - neither too early nor too late.

What Are The Markets Facing?

2008-04-16T07:49:00.001-07:00

The tight Canadian credit markets have remained a concern for the BoC. Therefore, the central bank will infuse another C$2 billion in liquidity into the market on April 17, when they purchase securities with treasuries. The MPC’s fretting has led to expectations that they will cut rates by 50 points at their upcoming April 22 meeting. Despite concerns over lending standards and a U.S. downturn, the Canadian economy has remained resilient. A strong labor market, built on the commodity boom has fueled domestic growth and saw the economy generate another 14,600 jobs in March. Likewise record oil prices have seen the physical trade balance reach a nine month high of C$4.9 billion, as energy exports have increased. Another positive sign for the economy is the recent tripling of expectations in factory shipments on higher automobile orders. Nevertheless, Governor Carney has cut rates 100 points since the subprime crisis started, as the U.S. slowdown is expected to eventually impact the Canadian economy. The only obstacle to a rate cut may be the upcoming inflation report, as rising energy and food costs have increased worldwide, leaving many policy makers reluctant to reduce interest rates. However, with current the current CPI level of 1.8% below the central banks target of 2% and expected to go lower, an uptick would not raise concerns for Canadian decision makers.

Inflation remains ECB`s main priority for now

2008-04-15T16:47:00.001-07:00

Markets sense that the effort by the Federal Reserve could help avoid degenerations, but can not change the course of events in the financial sectors. Trying to inspire resilient banks to lend again in the middle of a general reshuffle is a challenging task. More time is needed to take things back on track and another rate cut is possible in the coming months. The ECB, at the contrary, can still focus on inflation, as the economic slowdown is just arriving into the European continent.
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The Federal Reserve should cut rates again with housing in a freefallDespite improving slightly, housing remains a problem for the economy in the United States, as inventories are high and prices are still in a steep downtrend. The Federal Reserve should cut rates again and might bring them below 2.00% in the coming months. In fact, the S&P Case-Shiller Home Price Index indicated that prices of existing single family homes fell again throughout January. Sixteen of the twenty cites reported showed a loss with Las Vegas and Miami among the most beaten and Charlotte the only city with a gain year over year. Numbers lag by three months, but they are confirmed by more recent data. In February, as an example, existing home sales increased 2.9% (+0.7% expected) month over month, but they remain almost 24% below the level of one year ago. The up move covered both single homes (+2.8%) and multiple homes (+3.7%). However, inventories are at 9.6 months of supply, only a few ticks below the October¡¦s top of 10.5 months. New home sales slid instead to 1.8% (-1.7% expected) and are now almost 30% below the level of one year ago. Here, again, the Northeast (-40.3%) showed heavy losses, probably due to the adverse weather conditions. Inventories stay very high at 9.8 months of supply.

Euro/Usd challenging key resistance levels

2008-04-15T16:45:00.000-07:00

by Angelo Airaghi

Inter-banking credit spreads in the U.S. seem to demonstrate that financial institutions are caution about the capacity of debtor companies to repay debts and it will take sometime before confidence will prevail again. The financial crisis is spreading over global economies and the effects are just beginning to emerge. The Euro, in the mean time, is again challenging key resistance levels. They are at the conjunction of various trendlines. Consequently, a strong breakout is necessary for higher prices.
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Confidence is fading in the United StatesGlobal tightening is unfolding and could soon hit economies of the emerging markets. Nonetheless, another series of rate cuts is shortly expected in the U.S., so the bring the federal funds rate below 2.00% in the coming months. Last week, Fed officials acknowledged, with only two dissenters, that the economy is declining faster than previously expected and inflation¡¯s pressure might ease, as the economy slowdown would intensify. A weak US dollar does not appear to be a big concern for now, since it supports exports, although it could contribute to import higher inflation. In effect, the international trade remains a cornerstone of the U.S. economy, even tough the U.S. trade deficit increased to US$ 62.32 billion (US$ 58 billion expected) in February from January¡¯s 58.96 billion. Imports moved up 3.1% on the top of January¡¯s 1.8%, while exports rose 2.0%. Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media. This article contains the following sections:
Confidence is fading in the United States
For ECB is business as usual

Learnig Again!

2008-04-13T10:03:00.000-07:00

What is traded on the Foreign Exchange?

The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer, currencies are always traded in pairs; EX: the US dollar against Japanese yen, or the English pound against the Euro. So if a broker or a dealer believes that the Euro will gain against the dollar, he will sell dollars and buy Euros.Because you're not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy.

Can I trade from home?

Trade from anywhere. If you like to travel, this is a dream business. Take your laptop with you and you can trade the FOREX and make money anywhere in the world where you have an internet connection. You can be on the white-sand beaches of Guadeloupe (My country).You have total freedom of location. FX Trading is not bound to any one trading floor and is not centralized on an exchange, as with the stock and futures markets. The FX market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.All you need to get started is a computer, a high-speed Internet connection, and the information contained within this site.

Following Fundamentals Trends - March 2008

2008-04-09T08:04:00.001-07:00

More of the same in March, as the dollar slide continued. The unit once again hit all time lows against the euro and once again the economic data showed further signs of contraction as US lost jobs for the third month in a row. However, March also produced first evidence of weakness in the EZ , demonstrating that US was not the only G-3 nation to suffer from the oncoming slowdown in global growth and suggesting that the EURUSD rally may be coming to an end.

Euro Firms on Supportive Data - Will 1.5750 Give Way?

2008-04-09T08:02:00.000-07:00

It was a very quiet range bound night of trade as currency markets awaited the dual central bank decisions tomorrow from both the ECB and the BoE. In the meantime the EURUSD firmed on slightly better than expected German Trade Balance data which showed a 16.9 Billion euro surplus versus 15.7 Billion projected. Germany continues to do the yeoman’s work for the region maintaining its level of exports despite the obstacle of higher exchange rates and remains the primary reason for EURUSD strength.

News out of the broader region was not as friendly as the final reading of EZ GDP printed exactly in line with expectations showing that growth slowed in Q4 of last year. Most notable in the GDP report was the fact that consumption declined by -0.1% - its worst performance since 1995. With demand only slowing further in Q1 of 2008, the forecast for EZ GDP does not look promising and it is likely that the region will record another below trend number going forward.

Meanwhile news out of the UK was slightly more positive as both Industrial and Manufacturing production results improved this month. IP rose 0.3% vs. 0.1% expected while MP gained 0.4% vs. forecast of flat growth. The report helped boost the pound above the 1.9700 level and pushed EURGBP lower by about 10 points in its immediate aftermath. The cross had scaled the record high 8000 level earlier in the night, but failed to hold it.

The positive surprise from the manufacturing sector was a welcome sign of relief to beaten up pound bulls and suggests that BoE will lower rates by maximum of 25bp at tomorrow’s MPC meeting. Cable has been battered on assumption that the BoE will be the next major central bank to begin lowering rates in earnest, but tonight’s data suggests that Mr. King and company may continue to follow their cautious policy path for a while longer. In any case with cable woefully oversold against the euro at the 8000 level, the cross may be in for a correction as traders re-adjust their expectations.

With only Wholesale inventories on tap in the North American session trading may continue to be quiet ahead of tomorrow. The EURUSD has had a difficult time clearing the 1.5750 level in the past several sessions and it will interesting to see if today’s mildly positive tone will finally push it through that zone of congestion.

Risk Control

2008-03-29T17:30:00.001-07:00

Controlling risk is one of the most important ingredients of successful trading. While it is emotionally more appealing to focus on the upside of trading, every trader should know precisely how much he is willing to lose on each trade before cutting losses, and how much he is willing to lose in his account before ceasing trading and re-evaluating.
Risk will essentially be controlled in two ways: 1) by exiting losing trades before losses exceed your pre-determined maximum tolerance (or "cutting losses"), and 2) by limiting the "leverage" or position size you trade for a given account size.
Cutting Losses
Too often, the beginning trader will be overly concerned about incurring losing trades. He therefore lets losses mount, with the "hope" that the market will turn around and the loss will turn into a gain.
Almost all successful trading strategies include a disciplined procedure for cutting losses. When a trader is down on a positions, many emotions often come into play, making it difficult to cut losses at the right level. The best practice is to decide where losses will be cut before a trade is even initiated. This will assure the trader of the maximum amount he can expect to lose on the trade.
The other key element of risk control is overall account risk. In other words, a trader should know before he begins his trading endeavor how much of his account he is willing to lose before ceasing trading and re-evaluating his strategy. If you open an account with $2,000, are you willing to lose all $2,000? $1,000? As with risk control on individual trades, the most important discipline is to decide on a level and stick with it.
Determining Position Size
Before beginning any trading program, an assessment should be made of the maximum account loss that is likely to occur over time, per lot . For example, assume you have determined that your worse case loss on any trade is 30 pips. That translates into approximately $300 per $100,000 position size. Further assume that the $100,000 position size is equal to one lot. Five consecutive losing trades would result in a loss of $1,500 (5 x $300); a difficult period but not to be unexpected over the long run. For a $10,000 account trading one lot, this translates into a 15% loss. Therefore, even though it may be possible to trade 5 lots or more with a $10,000 account, this analysis suggests that the resulting "drawdown" would be too great (75% or more of the account value would be wiped out).
Any trader should have a sense of this maximum loss per lot, and then determine the amount he wishes to trade for a given account size that will yield tolerable drawdowns.

Dollar slips against euro

2008-03-24T21:42:00.001-07:00

Tue, Mar 25 2008, 01:56 GMT

NEW YORK (AP) - The dollar edged down slightly against the euro late Monday night in New York. The 15-nation currency rose to $1.5433 from $1.5418 it traded in the late afternoon.
Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Dollar sets low against euro, rebounds

2008-03-07T20:14:00.000-08:00

The dollar briefly fell to a record low against the euro Friday after data showed U.S. job cuts rose to the biggest monthly number in five years.
But the greenback regained lost ground and was trading higher against the euro by late afternoon as traders pondered the Federal Reserve's announcement that it would provide more cash to banks that need it.
The U.S. Labor Department said American employers cut 63,000 jobs in February -- the starkest sign yet that the U.S. is heading toward a recession or has entered one already.
Those fears pushed the 15-nation euro as high as $1.5463. It was the latest in a string of all-time highs but the surge was cut short as the focus shifted to a Fed announcement that it would boost the size of auctions planned for March 10 and March 24 to $50 billion each.
That amount is up from the $30 billion limits it had previously unveiled. The auctions serve as short-term loans to get banks the cash they need to keep lending to their customers.
That pushed the euro down to $1.5335 in late afternoon New York trading -- below the $1.5365 it bought late Thursday.
European businesses say they are starting to feel the pinch, notably from U.S.-based buyers who assert that the high euro makes European goods more expensive.
Also Friday, the British pound traded above the $2 mark for a second day, buying $2.0173 -- above the $2.0092 it bought the previous day. It had jumped Thursday after the Bank of England kept its key interest rate unchanged at 5.25 percent.
The dollar fell as low as 101.40 Japanese yen, near a three-year low, before it recovered to 103.09 yen in late New York trading, unchanged from late Thursday.
In other New York trading, the dollar rose to 1.0175 Canadian dollars from 1.0144 Canadian dollars Thursday, but slipped to 1.0249 Swiss francs from 1.0255 Swiss francs.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

10 Tips for your success in Forex trading

2008-03-02T15:25:00.001-08:00

1. Implement a trading plan.
“If you fail to plan, you plan to fail”. A trading plan is especially crucial in Forex trading to stay ‘in-control’ against the emotional stress in speculative situation. Often, your emotions will blind and lead you to the negative sides: greed causes you to over-ride on a win while fear causes you to cut short in your profits. Hence, a well organized operation has to be predetermined and strictly followed.

2. Trade within your means
If you cannot afford to lose, you cannot afford to win. Losing is a not a must but it is the natural in any trading market. Trading should be always done using excess money in your savings. Before you start to trade in Forex, we suggest you to put aside some of your income to set up your own investment funds and trade only using that funds.

3. Avoid emotion trading
If you do not have a trading plan, make one. If you have a trading plan, follows it strictly! Never ever attempt to hold your weakened position and hope the market will turn back in your favor direction. You might end up losing all your capital if you keep holding. Move on, stay within your trading plan, and admit your mistakes if things do not turn as you want.

4. Ride on a win and cut your losses
Forex trader should always ride till the market turns around whenever a profit is show; while during losing, never hesitate to admit your mistakes and exit the market. It is human nature to stay long on loses and satisfy with small profits – this is why as we mentioned earlier that a strictly followed trading plan is a must-have.

5. Love the trends
Trends are your friends. Although currency values fluctuate but from the big picture it normally goes in a steady direction. If you are not sure on certain moves, the long term trend is always your primary reference. In long run, trading with the trends improves your odds in the Forex market.

6. Stop looking for leading indicators
There aren't any in the Forex market. While some firms make a lot of money selling software that predicts the future, the reality is that if those products really worked, they wouldn't be giving the secret away.

7. Avoid trading in a thin market
Trade on popular currency pairs and avoid thin market. The lack of public participation will cause difficulties in liquidate your positions. If you are beginners, we suggest the big five: USD/EUR, USD/JPY, USD/GBD, USD/CHF, and EUR/JPY

8. Avoid trading in too many markets
Do not confuse yourself by overtrading in too many markets especially if you are a beginner. Go for the major currency pairs and drill down your studies in it.

9. Implement a proper trading system
There is hundreds of trading systems available on line. Pick one that you are most comfortable with and stick with it. Stay organized in your trades and fully utilized stop-loss or limit functions in your trades.

10. Keep learning
The best investment is always the investment on your brain. Without a doubt, Forex trading needs much more than just a few guidelines or tips to be successful. Experience, knowledge, capital, fortitude, and even some help of luck are all crucial in one’s success in the FX market. if you lose in a trade, do not lose the experience in it. Learn from your mistakes and regain your position in the next trade.

USD Losses Accelerate

2008-03-02T15:21:00.000-08:00

by Korman Tam

The beleaguered dollar found no reprieve against the majors, with the accelerated selling pushing the currency to fresh all-time lows against the euro, Swiss franc, 24-year lows versus the Aussie and 3-year lows versus the yen. Underscoring the greenback’s weakness has been the continued deterioration in US economic reports, raising fears of an imminent recession and reaffirming the Fed’s need for further aggressive monetary policy easing over the coming months. The reports today included January PCE, consumption, personal income, February Chicago PMI and the University of Michigan sentiment survey. Inflation remains firm as the January PCE price index edged higher with the monthly figure ticking up to 0.4% from 0.2% and 3.7% versus 3.5% a year earlier. The core PCE price index firmed to 0.3% m/m and 2.2% y/y. Personal consumption was flat in January and personal income eased to 0.3%, down from 0.5%. Boding poorly for the economy and the greenback was a dismal February Chicago PMI report, which fell sharply to 44.5, far greater than the expected decline to 49.7 from 51.5 from January – beneath the key 50-level. However, the University of Michigan sentiment survey in February fell by slightly less than estimates, declining to 70.8 instead of forecasts for a fall to 70 from 78.4 a month earlier. Central bank policy decisions and US economic data will dominate the headlines next week. The ECB, BoE, BoC, BoJ and RBA are scheduled to announce policy decisions, with the Reserve Bank of Australia seen tightening rates by 25-basis points to 7.25%. The key highlight from the US will be Friday’s labor report, with the unemployment rate for February expected to edge higher to 5.0% from 4.9% and non-farm payrolls reversing the 17k jobs contraction from January, growing by 35k.

What is a Market Maker?

2008-02-29T07:29:00.001-08:00

Lexical)A Market Maker is the counterparty to the client. The Market Maker does not operate as an intermediate or trustee. A Market Maker performs the hedging of its clients' positions according to its policy, which includes offsetting various clients' positions, hedging via liquidity providers (banks) and its equity capital, at its discretion.
Who are the Market Makers in the Forex industry?Banks, for example, or trading platforms (such as Easy-Forex™), who buy and sell financial instruments at the market. That is contrary to intermediates, which represent clients, basing their income on commission.
Do Market Makers go against a client's position?By definition, a Market Maker is the counterparty to all its clients' positions, and he always offers a two-sided quote (two rates: BUY and SELL). Therefore, there is nothing personal with the trading conduct between the Market Maker and the customer. Market Makers regard the total positions of their clients as a whole, same goes for banks and other market makers in the Forex market. They offset between clients' opposite positions, and hedge their net exposure according to authorities' guidelines and their risk management policies.
Do market makers and clients have a conflict of interest? Market makers are not intermediates, neither portfolio managers, nor advisors who represent customers (while earning commission), but rather they buy and sell goods to the customer. By definition, the Market Maker always provides a two-sided quote (the sell and the buy price), hence maintains neutrality as for the client. Banks do that, same with merchants in the markets, who buy goods and sell it to customers. The relationship between the trader (the customer) and the Market Maker (the bank; the trading platform; Easy-Forex™; etc.) is simply based on fundamental market forces: supply and demand.
Can a Market Maker influence market prices against clients' position? Definitely not, because the Forex market is the nearest to being a "perfect market" (as defined by economics theory). This is the biggest market today, reaching a daily volume of 3 trillion dollars throughout the globe. That means that there is no single participant in the market, banks and governments included, who can consistently push the price in a certain direction.
What is the main source of earnings to Easy-Forex™?Being a Market Maker, the major source to earnings is the spread between the bid and the ask prices. Accordingly, Easy-Forex™ maintains neutrality (as for the direction of any or all deals made by its traders), since the leading source for its income is the spread it earns.
How do Market Makers manage their exposure? The way most Market Makers hedge their exposure is to hedge on bulk. They aggregate all clients' positions and pass some, or all, of their net risk to their liquidity providers. Easy-Forex™ hedges its exposure in a similar fashion, in accordance to authorities' instructions and its risk management policy. As for liquidity providers, Easy-Forex™ works in cooperation with world's leading banks which provide liquidity to the Forex industry: UBS (Switzerland) and RBS (Royal Bank of Scotland).

Who trades currencies, and why?

2008-02-23T12:45:00.000-08:00

Daily turnover in the world's currencies comes from two sources: Foreign trade (5%). Companies buy and sell products in foreign countries, plus convert profits from foreign sales into domestic currency.
Speculation for profit (95%). Most traders focus on the biggest, most liquid currency pairs. "The Majors" include US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. In fact, more than 85% of daily forex trading happens in the major currency pairs.

The world's biggest market, trading 24 hours a day

With average daily turnover of US$3.2 trillion, forex is the largest market in the world.
A true 24-hour market from Sunday 5 PM ET to Friday 5 PM ET, forex trading begins in Sydney, and moves around the globe as the business day begins, first to Tokyo, London, and New York.
Unlike any other market, investors can respond immediately to currency fluctuations, whenever they occur - day or night.

Trading Strategy

2008-02-17T07:20:00.000-08:00

Making trading decisions and developing a sound and effective trading strategy is an important foundation of trading. Before developing a trading strategy, a trader should have a working knowledge of technical analysis as well as knowledge of some of the more popular technical studies. Please visit these pages for detailed information.

Sample Strategy 1 - Simple Moving Average

Successful trading is often described as optimizing your risk with respect to your reward, or upside. Any trading strategy should have a disciplined method of limiting risk while making the most out of favorable market moves. We will illustrate one decision making model which uses a Simple Moving Average ("SMA") technical study, based on a 12-period SMA, where each period is 15 minutes. This is one example of a trading decision making strategy, and we encourage any trader to research other strategies as thoroughly as possible.

We will use a simple algorithm: when the price of the currency crosses above the 12-period SMA, it will be taken as a signal to buy at the market. When the currency price crosses below the 12-period SMA, it will be a signal to "Stop and Reverse" ("SAR"). In other words, a long position will be liquidated and a short position will be established, both with market orders. Thus this system will keep the traders "always in" the market - he will always have either a long or short position after the first signal. In the chart below, the white line represents the price of USDJPY, the purple line represents the 12-period SMA of USDJPY, and the red line indicates where USDJPY crosses above the SMA, generating a buy signal at approximately 129.90:

This is a simple example of technical analysis applied to trading. Many strategies used by professional traders make use of moving averages along with other indicators or "filters". Note that the moving average method has an element of risk control built in: a long position will be stopped out fairly quickly in a falling market because the price will drop below the SMA, generating a stop-and-reverse signal. The same holds true for a sell signal in a rising market. Note that the SMA is generated automatically by GCI's integrated charting application.

Sample Strategy 2 - Support and Resistance Levels

One use of technical analysis, apart from technical studies, is in deriving "support" and "resistance" levels. The concept here is that the market will tend to trade above its support levels and trade below its resistance levels. If a support or resistance level is broken, the market is then expected to follow through in that direction. These levels are determined by analyzing the chart and assessing where the market has encountered unbroken support or resistance in the past.

For example, in chart below EURUSD has established a resistance level at approximately .9015. In other words, EURUSD has risen up to .9015 repeatedly, but has been unable to move beyond that point:

The trading strategy would then be to sell EURUSD the next time it gets close to .9015, with a stop placed just above .9015, say at .9025. This would have indeed been a good trade as EURUSD proceeded to fall sharply, without breaking the .9015 resistance. Hence a substantial upside can be achieved while only risking 10 or 15 pips (.0010 or .0015 in EURUSD).

Spot Forex versus Currency Futures

Many traders have made the switch from currency futures to spot foreign exchange ("forex") trading. Spot foreign exchange offers better liquidity and generally a lower cost of trading than currency futures. Banks and brokers in spot foreign exchange can quote markets 24 hours a day. Furthermore, the spot foreign exchange market is not burdened by exchange and NFA ("National Futures Association") fees, which are generally passed on to the customer in the form of higher commissions. For these reasons, virtually all professional traders and institutions conduct most of their foreign exchange dealing in the spot forex market, not in currency futures.

The mechanics of trading spot forex are similar to those of currency futures. The most important initial difference is the way in which currency pairs are quoted. Currency futures are always quoted as the currency versus the US dollar. In Spot forex, some currencies are quoted this way, while others are quoted as the US dollar versus the currency. For example, in spot forex, EURUSD is quoted the same way as Euro futures. In other words, if the Euro is strengthening, EURUSD will rise just as Euro futures will rise. On the other hand, USDCHF is quoted as US dollars with respect to Swiss Francs, the opposite of Swiss Franc futures. So if the Swiss Franc strengthens with respect to the US dollar, USDCHF will fall, while Swiss Franc futures will rise. The rule in spot forex is that the first currency shown is the currency that is being quoted in terms of direction. For example, "EUR" in EURUSD and "USD" in USDCHF is the currency that is being quoted.

The table below illustrates which spot currencies move parallel to the futures contract and which move inversely (opposite):
Forex
Symbol Currency Pair Futures
Symbol Directional
Relationship
GBPUSD British Pound / US Dollar BP Parallel
EURUSD Euro / US Dollar EU Parallel
USDJPY US Dollar / Japanese Yen JY Inverse
USDCHF US Dollar / Swiss Franc SF Inverse
USDCAD US Dollar / Canadian Dollar CD Inverse
AUDUSD Australian Dollar / US Dollar AD Parallel
NZDUSD New Zealand Dollar / US Dollar ND Parallel

Forex Market Summary

2008-02-13T19:55:00.001-08:00

U.S. Dollar Trading (USD) was mixed versus a number of majors, holding firm on positive Retail Sales out of the U.S. for the month of January coming above expectations, as Core figures were released at 0.3% (F: 0.2%; P: -0.3%R), whilst Headline figures came in at 0.3% (F: -0.2%; P: -0.4%). In U.S. share markets the NASDAQ was up by 108.13 points (+1.21%) whilst the Dow Jones was also higher by 178.45 points (+1.45%). Crude oil was higher by US$0.36 a barrel to US$93.14 after Venezuela said it would stop supplying oil to EXXON Mobil. Thursday sees the weekly release of Initial Jobless claims, whilst Ben Bernanke, and Henry Paulson are scheduled to testify in front of the Senate Banking Committee
The Euro (EUR) held firm, despite US retail sales unexpectedly rising for the month of January. In Eurozone specific news, Industrial Production declined by -0.2% for the month of December, well short of the forecasted figures of 0.6%, and inline with recent rhetoric surrounding slowing growth in the Eurozone. Overall the EURUSD traded with a low of 1.4530 and a high of 1.4600 before closing the day at 1.4579 in the New York session. Looking ahead, key growth data in the form of GDP for the fourth quarter 0.3% (Forecast: 0.4%; Previous: 0.8%)
The Japanese Yen (JPY) fell to a one-month low against the dollar after U.S. retail sales unexpectedly rose last month, allaying concern that the world's biggest economy will slide into a recession and hurt global growth. The currency dropped against 14 of the 16 most-active currencies as U.S. stocks rose, signaling traders are more confident to bet on higher-yielding assets funded by loans in Japan. Overall the USDJPY traded with a low 107.00 and a high of 108.37 before closing the day 108.22 in the New York session. Japanese GDP data released on Thursday morning was released at 0.9% (Forecast: 0.4%; Prior: 0.4%) for the fourth quarter.
The Sterling (GBP) rallied to a two week high against the Euro after the Bank of England raised its inflation forecast, prompting traders to pare bets on interest-rate cuts from the UK. The Sterling Pound also traded at week highs versus the dollar as the central bank forecast in its quarterly inflation report on Wednesday that price growth will overshoot its 2 percent goal in two years even as 'downside' risks to the economy remain. The pound also gained as a government report showed unemployment fell to a three-decade low in January. Overall the GBPUSD traded with a low of 1.9552 and a high of 1.9654 before closing the day at 1.9650 in the New York session.
The Australian Dollar (AUD) paired its weekly gains on positive retail sales figures from the US. The AUDUSD traded with a low of 0.8924 and high of 0.9046 before closing the day at 0.8951 in the New York session. Unemployment Rate for the Aussie is out on Thursday morning with forecast expected to be at 4.3%, same as the previous. UPDATE: Unemployment rate at 4.1%.
Gold (XAU) little changed in New York, may fall on speculation a rally in equities will reduce the appeal of the precious metals as alternative investments. XAU traded with a low of 896.00 and a high of 910.00.

Data Supports EUR, GBP

2008-02-12T16:46:00.000-08:00

The greenback was mixed in Tuesday trading, falling against the euro and sterling while rallying versus the yen. Economic data from the Eurozone and UK helped support their respective currencies while the US had a dearth of reports in the session. Separately, US equity bourses benefited from Warren Buffett’s announcement to offer support for bond insurers, providing up to $800 billion in municipal bonds. The yen slumped across the board, falling to 107.52 against the dollar and 157 versus the euro as the Dow Jones rallied by over 1.3%.On Wednesday, the US economic calendar picks up with the release of retail sales and Fed Chairman Bernanke’s Congressional testimony. Retail sales are estimated to fall by 0.2% in January extending December’s 0.4% decline. The excluding-autos retail sales are seen edging up by 0.2% from a 0.4% drop a month earlier. Fed Chairman Bernanke will testify before Congress and is expected to reiterate the FOMC’s readiness to support the economy and ease rates further in the face of additional weak US economic data.

Risk Warning

2008-02-12T05:44:00.001-08:00

Before deciding to participate in the Forex market, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, do not invest money you cannot afford to lose. There is considerable exposure to risk in any off-exchange foreign exchange transaction, including, but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. More over, the leveraged nature of forex trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. The possibility exists that you could sustain a total loss of initial margin funds and be required to deposit additional funds to maintain your position. If you fail to meet any margin requirement, your position may be liquidated and you will be responsible for any resulting losses. To manage exposure, employ risk-reducing strategies such as 'stop-loss' or 'limit' orders. There are risks associated with utilizing an Internet-based trading system including, but not limited to, the failure of hardware, software, and Internet connection. FOREX.com is not responsible for communication failures or delays when trading via the Internet. FOREX.com employs back up systems and contingency plans to minimize the possibility of system failure, and trading via telephone is always available. Any opinions, news, research, analyses, prices, or other information contained on this website are provided as general market commentary, and do not constitute investment advice. FOREX.com is not liable for any loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. FOREX.com has taken reasonable measures to ensure the accuracy of the information on the website. The content on this website is subject to change at any time without notice.

Investors urged to look beyond ratings

2008-02-10T07:03:00.001-08:00

NEW YORK (AP) - For the big three credit rating agencies, growing criticism this past week that their ratings systems are flawed must have sounded like a familiar refrain.
Standard & Poor's, Moody's Investors Service, and Fitch Ratings are being criticized by government officials and some investor groups for not identifying weakness in subprime mortgage-backed securities before they went sour and contributed to massive loss in financial firms and, in turn, the stock market. They're also criticized for having too cozy a relationship with the debt issuers that pay them for their ratings.
This isn't the first time the rating agencies have found themselves under pressure. The beleaguered industry got similar complaints after the collapse of Enron Corp. in 2001, and before that the bankruptcy of Orange County, Calif., in 1994.
In all three situations, ratings assigned to these issuers went from near-stellar to junk almost overnight. As the agencies begin to think about changing the way they do business, analysts say investors must become more vigilant about what debt securities they sink money into -- and not rely solely on what the rating agencies say.
"This happens every other year or so when something shakes up the ratings industry and ends up on the Op-Ed pages," said Martin
Fridson, the former head of Merrill Lynch high-yield research and now proprietor of the specialist firm FridsonVision. "You have to do extra homework, you have to be wary about the way securities are being marketed, and use the ratings that are out there as just a tool."
Investors are plowing more money than ever into fixed-income products, from municipal bonds to exchange traded funds. According to The Securities Industry and Financial Markets Association, a New York-based trade group, outstanding public and private debt underwritten by bonds was valued at about $25 trillion.
Some 10 percent of corporate bonds are held directly by individual investors, while institutions like pension funds hold the rest, according to the group. These securities -- which are more conservative than stocks -- are an integral part of retirement planning and diversifying portfolios during rocky times in the equities market.
Fridson and others say most investors don't hold the kind of opaque asset-backed securities that caused global banks to lose about $130 billion since last year. However, there are certain tip-offs investors should watch for when investing in the fixed-income markets -- no matter what ratings the securities hold.
For instance, he said "one sure guide is to be skeptical if you see something yielding much more than comparably rated bonds." Investors might also obtain fixed-income holdings through investment managers -- like Vanguard or PIMCO -- where analysts scrutinize debt issues beyond just the ratings.
"Over the last six months, a lot of people have learned the hard way that this risk exists -- and that the rating agencies aren't fool proof," said John Flahive, director of fixed income at BNY Mellon Wealth Management. "We've been reminding clients for a long while of the risk, which is why you hire a professional manager that you can use as a safeguard."
Rating agencies, which are regulated by the Securities and Exchange Commission, have been pressured to sell subscriptions to investors for their ratings instead of taking payment right from debt issuers; that, many observers believe, will avoid potential conflicts of interest. Debt issuers seek out higher ratings because that makes it easier to raise money in the capital markets.
And, aside from that, the agencies have already taken some preliminary steps to deflect such criticism and ease mounting regulatory and government concerns.
This past week, S&P said it is aiming to improve governance through measures ranging from establishing an ombudsman's office to address complaints to hiring an external firm for better oversight. Moody's also said it was considering changes in how it rates mortgage-related securities.
But, it has left many on Wall Street asking if this will be enough -- and wonder if the industry itself will begin to shift to other rating models.
"There are people out there right now trying to figure out how to build a better mousetrap," Flahive said. "If I was John Q. Public, I wouldn't feel overly better -- it is going to take more than a few alterations to how the rating agencies are doing things."

Forex risk management strategies

2008-02-09T07:47:00.001-08:00

Learn about the basic strategies for controlling risks while trading Forex
The Forex market behaves differently from other markets! The speed, volatility, and enormous size of the Forex market are unlike anything else in the financial world. Beware: the Forex market is uncontrollable - no single event, individual, or factor rules it. Enjoy trading in the perfect market! Just like any other speculative business, increased risk entails chances for a higher profit/loss.
Currency markets are highly speculative and volatile in nature. Any currency can become very expensive or very cheap in relation to any or all other currencies in a matter of days, hours, or sometimes, in minutes. This unpredictable nature of the currencies is what attracts an investor to trade and invest in the currency market.
But ask yourself, "How much am I ready to lose?" When you terminated, closed or exited your position, had you had understood the risks and taken steps to avoid them? Let's look at some foreign exchange risk management issues that may come up in your day-to-day foreign exchange transactions.
Unexpected corrections in currency exchange rates
Wild variations in foreign exchange rates
Volatile markets offering profit opportunities
Lost payments
Delayed confirmation of payments and receivables
Divergence between bank drafts received and the contract price
There are areas that every trader should cover both BEFORE and DURING a trade.Exit the Forex market at profit targets
Limit orders, also known as profit take orders, allow Forex traders to exit the Forex market at pre-determined profit targets. If you are short (sold) a currency pair, the system will only allow you to place a limit order below the current market price because this is the profit zone. Similarly, if you are long (bought) the currency pair, the system will only allow you to place a limit order above the current market price. Limit orders help create a disciplined trading methodology and make it possible for traders to walk away from the computer without continuously monitoring the market.Control risk by capping losses
Stop/loss orders allow traders to set an exit point for a losing trade. If you are short a currency pair, the stop/loss order should be placed above the current market price. If you are long the currency pair, the stop/loss order should be placed below the current market price. Stop/loss orders help traders control risk by capping losses. Stop/loss orders are counter-intuitive because you do not want them to be hit; however, you will be happy that you placed them! When logic dictates, you can control greed.Where should I place my stop and limit orders?
As a general rule of thumb, traders should set stop/loss orders closer to the opening price than limit orders. If this rule is followed, a trader needs to be right less than 50% of the time to be profitable. For example, a trader that uses a 30 pip stop/loss and 100-pip limit orders, needs only to be right 1/3 of the time to make a profit. Where the trader places the stop and limit will depend on how risk-adverse he is. Stop/loss orders should not be so tight that normal market volatility triggers the order. Similarly, limit orders should reflect a realistic expectation of gains based on the market's trading activity and the length of time one wants to hold the position. In initially setting up and establishing the trade, the trader should look to change the stop loss and set it at a rate in the 'middle ground' where they are not overexposed to the trade, and at the same time, not too close to the market.
Trading foreign currencies is a demanding and potentially profitable opportunity for trained and experienced investors. However, before deciding to participate in the Forex market, you should soberly reflect on the desired result of your investment and your level of experience. Warning! Do not invest money you cannot afford to lose.
So, there is significant risk in any foreign exchange deal. Any transaction involving currencies involves risks including, but not limited to, the potential for changing political and/or economic conditions, that may substantially affect the price or liquidity of a currency.
Moreover, the leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. The possibility exists that you could sustain a total loss of your initial margin funds and be required to deposit additional funds to maintain your position. If you fail to meet any margin call within the time prescribed, your position will be liquidated and you will be responsible for any resulting losses. 'Stop-loss' or 'limit' order strategies may lower an investor's exposure to risk.
Easy-Forex foreign exchange technology links around-the-clock to the world's foreign currency exchange trading floors to get the lowest foreign currency rates and to take every opportunity to make or settle a transaction.Avoiding/lowering risk when trading Forex:
Trade like a technical analyst. Understanding the fundamentals behind an investment also requires understanding the technical analysis method. When your fundamental and technical signals point to the same direction, you have a good chance to have a successful trade, especially with good money management skills. Use simple support and resistance technical analysis, Fibonacci Retracement and reversal days. Be disciplined. Create a position and understand your reasons for having that position, and establish stop loss and profit taking levels. Discipline includes hitting your stops and not following the temptation to stay with a losing position that has gone through your stop/loss level. When you buy, buy high. When you sell, sell higher. Similarly, when you sell, sell low. When you buy, buy lower. Rule of thumb: In a bull market, be long or neutral - in a bear market, be short or neutral. If you forget this rule and trade against the trend, you will usually cause yourself to suffer psychological worries, and frequently, losses. And never add to a losing position. On Easy-Forex the trader can change their trade orders as many times as they wish free of charge, either as a stop loss or as a take profit. The trader can also close the trade manually without a stop loss or profit take order being hit. Many successful traders set their stop loss price beyond the rate at which they made the trade so that the worst that can happen is that they get stopped out and make a profit.

Why Forex?: A World Of Opportunities

2008-02-08T13:08:00.000-08:00

The foreign exchange market is the world’s largest financial market, but it wasn’t always accessible to any interested trader. Remember, forex trading is not conducted on a regulated exchange and as a result, there are additional risks associated with forex trading. In the past, access to foreign exchange of currencies was limited to banks, hedge funds, major currency dealers and the occasional high net-worth individual. But smaller financial institutions wanted to take advantage of the many benefits forex offered over other markets, including its tremendous liquidity, 24-hour access 5.5 days of the week and the strong trending nature of currency exchange rates.
It was this entrepreneurial vision of the smaller financial institutions and the evolution of the Internet that made forex accessible at a retail level. These institutions, including GFT, combined the accessibility of the Internet and fast and efficient proprietary software with accurate pricing, charting abilities, technical indicators and news feeds, which allowed any interested speculator open access to trade currencies. From 2002 to 2005 the practice of trading forex has grown threefold and this growth curve continues still. So read more about the benefits of using GFT and our access the world’s largest, fastest, most exhilarating market.
What is Forex?
You may already be aware of some of the benefits offered by the currency market. It is the fastest, largest and most liquid market in the world, but that is only the beginning of its advantages. As a very basic explanation, forex is the simultaneous buying of one currency and selling of another in order to seek gaining a profit (or accruing a loss).
Today, almost anyone with the appropriate appetite for risk and an understanding of market trends and analysis can trade currencies online with GFT. There are many benefits of trading forex versus other types of financial markets, many benefits to choosing GFT as your forex dealer and much to learn if you’re new to currency trading. Just click a link below to start improving your knowledge, and you’ll be well on your way to reaching your full potential in the foreign exchange market.

Affinity Investment Fraud

2008-02-08T08:49:00.001-08:00

Affinity investment fraud refers to investment scams that prey upon members of identifiable groups, such as i.e. religious or ethnic communities, the elderly or professional groups.

The fraudsters who promote affinity scams frequently are - or pretend to be - members of the group. They often enlist respected community or religious leaders from within the group to spread the word about the scheme, by convincing those people that a fraudulent investment is legitimate and worthwhile.

Many times, those leaders themselves become unwitting victims of the fraudster's ruse.

These scams exploit the trust and friendship that exist in groups of people who have something in common.

Because of the tight-knit structure of many groups, it can be difficult for regulators or law enforcement officials to detect an affinity scam. Victims often fail to notify authorities or pursue their legal remedies, and instead try to work things out within their own group.

This is particularly true where the fraudsters have used respected community or religious leaders to convince others to join the investment.

Many affinity scams involve various pyramid schemes, where new investor money is used to make payments to earlier investors to give the false illusion that the investment is successful.

This ploy is used to trick new investors to invest in the scheme and to lull existing investors into believing their investments are safe and secure.

In reality, the fraudster almost always steals investor money for personal use.

Those schemes always depend on an unending supply of new investors - when the inevitable occurs, and the supply of investors dries up, the whole scheme collapses and investors discover that most or all of their money is gone.

How to Avoid Affinity Fraud

Investing always involves some degree of risk. You can minimize your risk of investing unwisely by asking questions and getting the facts about any investment before you buy.

To avoid affinity and other scams, you should:

Check out everything:

No matter how trustworthy the person seems who brings the investment opportunity to your attention. Never make an investment based solely on the recommendation of a member of an organization or religious or ethnic group to which you belong.

Investigate the investment thoroughly and check the truth of every statement you are told about the investment. Be aware that the person telling you about the investment may have been fooled into believing that the investment is legitimate when it is not.

Do not fall for investments that promise spectacular profits or "guaranteed" returns:

If an investment seems too good to be true, then it probably is.

Similarly, be extremely leery of any investment that is said to have no risks; very few investments are risk-free.

The greater the potential return from an investment, the greater your risk of losing money. Promises of fast and high profits, with little or no risk, are classic warning signs of fraud.

Be skeptical of any investment opportunity that is not in writing:

Fraudsters often avoid putting things in writing, but legitimate investments are usually in writing.

Avoid an investment if you are told they do "not have the time to reduce to writing" the particulars about the investment.

You should also be suspicious if you are told to keep the investment opportunity confidential.

Don't be pressured or rushed into buying an investment before you have a chance to think about - or investigate - the "opportunity":

Just because someone you know made money, or claims to have made money, doesn't mean you will too.

Be especially skeptical of investments that are pitched as "once-in-a-lifetime" opportunities, particularly when the promoter bases the recommendation on "inside" or confidential information.

Fraudsters are increasingly using the Internet to target particular groups through e-mail spasm:

If you receive an unsolicited e-mail from someone you don't know, containing a "can't miss" investment, your best move is to pass up the "opportunity!"

What are Pivot Points in Forex

2008-02-07T07:09:00.001-08:00

Pivot Point defined: A technical indicator derived by calculating the numerical average of a particular stock's high, low and closing prices. A technical indicator derived by calculating the numerical average of a particular stock's high, low and closing prices.

The FOREX or Foreign Exchange market is the largest financial market in the world, with an volume of more than $1.5 trillion daily, dealing in currencies. Unlike other financial markets, the Forex market has no physical location, no central exchange. It operates through an electronic network of banks, corporations and individuals trading one currency for another.

You may hear that one of the handier tools in a forex trader’s toolbox is a pivot point calculator. Pivot points are one of the commonly used triggers for trading systems. If you’re new to the forex market, though, you may be foggy on exactly what pivot points are and what they can mean to your trading.

In a nutshell, pivot points are exactly what they sound like – the point at which the market is expected to turn – if it’s been going down, a pivot point is the value at which it will reverse the trend and begin to climb. If it’s been rising, then the pivot point is where the sentiment of the traders will turn and begin a downward trend. Obviously, being able to predict major movements in the money market is a valuable skill, since it hints at the where the market is moving and whether or not this is the time to trade or stick.

Pivot point trading is an especially popular method of mapping out a trading strategy. It was originally used by floor traders in the stock market who liked it because it allowed them to gauge where the market was heading with just a few simple bits of information and calculations. By knowing the high, low, opening and closing points from the previous day, they could calculate a point at which the market had ‘turned’ to head upward or downward. Pivot points can help predict where the market is going – and coupled with the resistance and support points, give you an idea how far in that direction it will go.

There are a number of ways to calculate the pivot points for the day, but the most common – and easiest – is to average the opening, closing and high points for the last day’s trading. There are other pivot points that can be calculated from those numbers as well. Before we talk about how to calculate them and what they mean, let’s define a few terms:

Resistance – A high point in a market chart that recurs regularly. Generally, it’s the point where the market (or currency) will begin a downturn

Support – A low point in the market chart that recurs regularly. Generally, it’s the point where the market (or currency) will begin to climb back up.

Traditionally, support and resistance points are difficult to break through. Most of the time as the numbers approach that level; there will be a slight rebound in the other direction. An interesting phenomenon is that once a resistance or support point is broken, it tends to switch sides – a broken resistance will often become a support for prices on the other side of the line.

The most common calculation for arriving at a pivot point is:

Pivot: (High + Close + Low)/3

Resistance: 2 * Pivot – Low

Support : 2 * Pivot – High

USD/EUR Date:02/03/06 14:40 O=0.83174 H=0.83188 L=0.83167 C=0.83188

Given this data for Feb 3, 2006, the pivot points for Feb 4, 2006 would look like this:

Pivot: 0.83180

Resistance: 0.83193

Support: 0.83172

Those numbers give me some points on which to base my strategy for the day. If the market opens above the pivot point, it’s a bull market, and most advisors would go for long trades, since the direction of the market is up. If it opens below pivot, it’s time to favor short trades and quick sales.

There are two common sales strategies using pivot, resistance and support points.

Breakout Trade: When a currency pair breaks through a resistance or support point, there’s usually a surge of activity around it. Buy if the charts show a break through a resistance, sell if the rate drops below a support point.

Pullback Trade: When the exchange rate drops back from a high, most traders will buy, based on other information that’s available. It’s a tricky move, though, since the pullback could just be a temporary pause in the upward momentum, or the beginning of a downward rebound.

Using pivot points to inform your strategy in day trading is a complex subject. You’ll find a great deal written about it by various gurus and experts. These basics can help you understand what you’re reading from them.

Diversifying Forex Trading Strategies

2008-02-07T07:04:00.001-08:00

The critical difference between who will win and who will lose in the business of Forex market trading is learning how to manage your money. For example, if 100 Forex traders begin trading by using a system with 60% of winning odds, only about 5 of those traders would see a profit by the end of the year. Despite those 60% winning odds, only 95% of those Forex traders will lose because of poor money management skills. When entering a trading system one must have great money management skills in order to succeed. Traders enter the Forex system to make a profit, after all, not to lose money.

The amount of money you will put on a trade and the risks you are willing to accept for that trade is money management. It is very important to understand the concept of managing money and to understand the difference between managing money and trading decisions, in order to diversify your Forex trading strategies. There are a number of different strategies that can be employed that will aspire to preserve your balance from any high-risk liabilities.

To begin with an understanding of the “core equity” is a necessity. Basically the core equity illustrates the starting balance of the account and what amounts are in the open positions. Your money management will greatly depend on this equity so it’s very important to understand the meaning of core equity. For instance, if you have an open account with a balance of $5,000 and you enter a trade with $1,000 your core equity will be $4,000. If you enter another trade for another $1,000 then your core equity would be $3,000.

From the outset, it’s best to diversify trades by using several different currencies. By only trading one currency pair, you will generate very few entry signals. For example, if you have an account balance of $100,000 and have an open position for $10,000 then that makes your core equity $90,000. If you choose to enter on a second position, then calculate the 1% risk from your core equity, but not your starting account balance. This would mean that the second trade would not exceed $900. Then if you decide to enter a third position, with a core equity of $80,000 then the risk from that trade should not surpass $800. The key is to diversify the lots between all currencies that have a low correlation.

For example, if you want to trade EUR/USD and GBP/USD with a $10,000 (1% risk) standard position size in money management, then it would be safe to trade $5,000 in each EUR/USD and GBP/USD. This way, you will only be risking 0.5% on each position.

When trying to diversify your Forex trading strategies, it’s very important to understand the strategies of the Martingale and the Anti-Martingale. The Martingale rule means: increasing your risks when you’re losing. Gamblers worldwide who claim that one should increase the size of a trade even when one is losing have adopted this strategy. Basically, gamblers use the rule in the following way: bet $20, if you lose bet $40, if you loose bet $80, if you lose bet $160, if you lose bet $320, etc.

The strategy is to assume that if you lose more than four times, then the chances to win become bigger and as you add more money, you will be able to recover from your loss. Although there are many people who choose to use this strategy, the truth is, the odds are still the same 50/50 regardless of the previous losses. Even if you lose five times in a row, the odds for your sixth bet, and even for those there after, are still 50/50. This is a common mistake made by those who are new to the trading business. For instance, if a trader started with a $10,000 balance and lost four trades of $1,000 a piece for a total of $4,000 then the traders remaining balance would be $6,000. If the trader thinks there is a higher chance of winning the fifth trade and increases the size of the position four times, enough to recover from the loss, then if the fifth trade loses the trader will be down to $2,000. A loss like this can never be recovered back to the $10,000 starting balance. No experienced trader would use such a risky gambling tactic as the result is negative - losing all the money in a short period of time.

Forex Market Trading and The Mind Games

2008-02-07T07:03:00.002-08:00

First, what is Forex: The FOREX or Foreign Exchange market is the largest financial market in the world, with an volume of more than $1.5 trillion daily, dealing in currencies. Unlike other financial markets, the Forex market has no physical location, no central exchange. It operates through an electronic network of banks, corporations and individuals trading one currency for another.

Mind Games defined: Mind Games are a kind of social interaction where participants try to screw with one anothers' heads. The concept is most often used colloquially to refer to deceitful, confusing or Machiavellian situations. However some mind games are described by the psychology of transactional analysis.

When it comes to trading on the Forex market, winning is a matter of the mind rather than mind over matter. Any trader who’s been in the game for any length of time will tell you that psychology has a lot to do with both your own performance on the trading floor and with the way that the market is moving. Playing a winning hand depends on knowing your own mind – and understanding the way that psychology moves the market.

Studying the psychology of the market is nothing new. It doesn’t take a genius to understand that any arena that rides and falls on decisions made by people is going to be heavily influenced by the minds of people. Few people take into account all the various levels of mind games that motivate the market, though. If you keep your eye on the way that psychology influences others – including the mass psychology of the people that use the currency on a daily basis – but neglect to know what moves you, you’re going to end up hurting your own position. The best Forex coaches will tell you that before you can really become a successful trader, you have to know yourself and the triggers that influence you. Knowing those will help you overcome them or use them. Are you saying ‘Huh?” about now? Believe me, I understand. I felt the same way the first time that someone tried to explain how the mind games we play with ourselves influence the trades and decisions that we make. Let me break it down into more manageable pieces for you.

Anything involving winning or losing large sums of money becomes emotionally charged.
All right. You’ve heard that playing the market is a mathematical game. Plug in the right numbers, make the right calculations and you’ll come out ahead. So why is it that so many traders end up on the losing end of the market? After all, everyone has access to the same numbers, the same data, the same info – if it’s math, there’s only one right answer, right?

The answer lies in interpretation. The numbers don’t lie, but your mind does. Your hopes and fears can make you see things that just aren’t there. When you invest in a currency, you’re investing more than just money – you make an emotional investment. Being ‘right’ becomes important. Being ‘wrong’ doesn’t just cost you money when you let yourself be ruled by your emotions – it costs you pride. Why else would you let a loser ride in the hope that it will bounce back? It’s that little thing inside your head that says, “I KNOW I’m right on this, dammit!”

To most people, being right is more important than making money.
Here’s the deal. The way to make real money in the forex market is to cut your losses short and let your winners ride. In order to do that, you have GOT to accept that some of your trades are going to lose, cut them loose and move on to another trade. You’ve got to accept that picking a loser is NOT an indication of your self-worth, it’s not a reflection on who you are. It’s simply a loss, and the best way to deal with it is to stop losing money by moving on – and really move on. Moving on means you don’t keep a running total of how many losses you’ve had – that’s the way to paralyze yourself. This brings us to the next point:

Losing traders see loss as failure. Winning traders see loss as learning.
Not too long ago, my twelve year old son told me that before Thomas Edison invented a working light bulb, he invented 100 light bulbs that didn’t work. But he didn’t give up – because he knew that creating a source of light from electricity was possible. He believed in his overall theory – so when one design didn’t work, he simply knew that he’d eliminated one possibility. Keep eliminating possibilities long enough, and you’ll eventually find the possibility that works.

Winning traders see loss in the same way. They haven’t failed – they’ve learned something new about the way that they and the market work.
Winning traders can look at the big picture while playing in the small arena.

Suppose I told you that last year, I made 75 trades that lost money, and 25 that made money. In the eyes of most people, that would make me a pretty poor trader. I’m wrong 75% of the time. But what if I told you that my average loss was $1000, but my average profit on a winning trade was $10,000? That means that I lost $75,000 on trades – but I made $250,000, making my overall profit $175,000. It’s a pretty clear numbers game – but how do you keep on trading when you’re losing in trade after trade? Simple – just remember that one trade does not make or break a trader. Focus on the trade at hand, follow the triggers that you’ve set up – but define yourself by what really matters – the overall record.

Bottom line: You can’t keep emotions out of the picture, but you can learn not to let them control your decisions. Keep it all in perspective and realise that there are a lot of big boys playing this game and playing it to win...

Forex Market Trading Rules

2008-02-07T07:03:00.001-08:00

First what is Forex: The FOREX or Foreign Exchange market is the largest financial market in the world, with an volume of more than $1.5 trillion daily, dealing in currencies. Unlike other financial markets, the Forex market has no physical location, no central exchange. It operates through an electronic network of banks, corporations and individuals trading one currency for another.

The Forex, or foreign currency exchange, is all about money. Money from all over the world is bought, sold and traded. On the Forex, anyone can buy and sell currency and with possibly come out ahead in the end. When dealing with the foreign currency exchange, it is possible to buy the currency of one country, sell it and make a profit. For example, a broker might buy a Japanese yen when the yen to dollar ratio increases, then sell the yens and buy back American dollars for a profit.

Those new to trading in the Forex market can find it a little bit intimidating and overwhelming at times. The rules and strategies for a beginner can seem like too much to learn. There are rules that you will learn along the way, for example price limits, but there are a few steadfast rules you should know before you make your first move in the Forex market. Using the three rules listed below will help you get started and successfully maneuver your way through the foreign exchange market.

Leveraging Your Portfolio

It can be easy to get caught up in the leverage of the market when just starting out in the Forex. The great thing about leverage is that someone who is not investing as much as other larger traders can play with the big guns and potentially make a good profit. In most cases, an investor can expect to only to back their investment up to 4%. This can get some people in trouble, however, and when you choose to abuse the system you can end up with a lot of debt. Never over leverage your portfolio. Be responsible when trading and remember that you are trading larger amounts than you probably have in your portfolio. The way to make sure you use the Forex market to your best potential is to keep yourself grounded.

Knowing when to quit is another rule for trading in the Forex market. It may sound simplistic but it is a great rule to never forget. On the other hand, knowing when to let things stay as they are is also a rule to remember. There is no way around occasional trades that have a negative impact on your finances. Not every trade you make will be a success. In the ever changing foreign exchange market there is no way to guarantee that every trade will reap rewards. Even the most seasoned foreign exchange market traders have bad trades. Your ultimate goal in trading on the Forex should be to try to come out with more wins than losses.

You should always know when to fold on a deal, thereby making it easier to come out ahead at the end of the day. Be sure to always get out losing the least amount of money as possible. This is a strategy every great trader uses. Watch your trades closely and get out when you should. If you have researched the trade before, you will know what the breaking points likely are and be able to make this decision easily. Knowing when to leave well enough alone is another skill one must learn. Learn to be patient with your trades, especially if they are not in a negative position.

Research Trades

Researching trades beforehand may seem monotonous, however, you should never make an order in the Forex market without knowing exactly what you expect to happen. Look at trends and history in order to get a better idea of what to expect. If you simply go out into the market with no background on the issues, you could lose a lot of money. So, take the time to do a little research before you begin.

Place Stop Loss Orders

You should always be familiar with a stop loss order before you begin trading in the Forex market. The stop loss order should be placed right along with your entry order. This type of order protects you from a potential loss getting out of hand. If the market takes a dive, you will be protected with the stop loss order. You must figure out however, before placing the order, at what point you would want to cut your losses. You should always do this before placing an order. Although you may find that many traders do not utilize the stop loss order process, you will find that the more successful traders use it often.

Three simple rules to follow to ensure that you get the most from trading on the Forex market.

Is There Such A Thing As Hedging in the Forex Market

2008-02-07T07:02:00.001-08:00

Just like hedging your bet at the horse track you can hedge your trading in the Forex Market.

What is the Forex Market: The Forex and the stock market have some similarities, in that it involves buying and selling to make a profit, but there are some differences. Unlike the stock market, the Forex has a higher liquidity. This means, a lot more money is changing hands everyday. Another key difference when comparing the Forex to the stock market is that the Forex has no place where it is exchanged and it never closes. The Forex involved trading between banks and brokers all over the world and provides twenty-four hour access during the business week.

For those who are not familiar with the Forex market, the word “hedging” could mean absolutely nothing. However, those who are regular traders know that there are many ways to use this term in trading. Most of the time when you hear this phrase it means that you are trying to reduce your risk in trading. It is something that everyone who plans to invest should know about. It is a technique that can protect your investments to some degree.

While hedging is a popular trading term, it is also one that seems a little mysterious. It is much like an insurance plan. When you hedge, you insure yourself in case a negative event may occur. This does not mean that when a negative event occurs you will come out of it completely unaffected. It only means that if you properly hedge yourself, you won’t experience a huge impact. Think of it like your auto insurance. You purchase it in case something bad happens. It does not prevent bad things from happening, but if they do, you are able to recover a lot better than if you were uninsured.

Anyone who is involved in trading can learn to hedge. From huge corporations to small individual investors, hedging is something that is widely practiced. The manner in which they do this involves using market instruments to offset the risk of any negative movement in price. The easiest way to do this is to hedge an investment with another investment. For example, the way most people would deal with this is to invest in two different things with negative correlations. This is still costly to some people; however, the protection you get from doing this is well worth the cost most of the time. When you begin learning more about hedging, you start to understand why not many people completely know what it is all about. The techniques used to hedge are done by using derivatives. These are complicated instruments of finance and most often only used by seasoned investors.

When you decide to hedge, you must remember that it comes with a cost. You should always be sure that the benefits you get from a hedge should be more than enough to make it worth your while. You should make sure the expense is justified. If it is not, then you should not hedge. The goal of hedging is not to make money. You will not make large gains by hedging yourself. You have to take some risks in order to gain. Hedging is intended to be used to protect your losses. The loss cannot be avoided, but the hedge can offer a little comfort. However, even if nothing negative happens, you will still have to pay for the hedge. Unlike insurance, you are never compensated for your hedge. Things can go wrong with hedging and it may not always protect you as you think it will.

Keep in mind that most investors never hedge in their entire trading careers. Short-term fluctuation is something that the majority of investors do not worry with. Therefore, hedging can be pointless. Even if you choose not to hedge however, learning about the technique is a great way to understand the market a bit more. You will see large corporations and other large traders use this and may be confused at why they are acting this way. When you know more about hedging you can fully understand their strategies.

Stock Market Investments - The Decision Is ONLY Yours!

2008-02-07T07:00:00.001-08:00

"An investment in knowledge pays the best interest!"
Benjamin Franklin (1706 - 1790)

Investing is a very complicated science, so your success can ultimately come only through further careful study of market principles.

Try to develop your investing savvy so you don't have to rely too much on the advice of others, who may or may not have your best interests at heart!

As you know, you don't have to be an expert in order to invest profitably ...

You don't even have to really love money ...

But, you will pay a high price for neglecting your finances!

During my years as a stockbroker I've seen many losers and winners. The difference was knowing the rules of "The Game" and adopting the right strategies to suit individual circumstances.

There are plenty of people ready to give you advice:

Bank managers, accountants, financial advisers and etc. Listen to them by all means, and read what this site has to offer.

But, at the end of the day ...

The final decision and the money will always be only yours!

Investors and the Circle of Competence

2008-02-07T06:58:00.000-08:00

Investment procedures apply equally to all investors because they are based on unchanging principles.

In contrast, the selection process differs for each individual investor because it reflects the circle of competence, or circle of interest which becomes a circle of increasing competence with the accumulation of experience by the individual investor.

The circle of competence is a specific application of the general principle of differential knowledge.

The economist Friedrich A. Hayek (1899 - 1992) noted that "practically every individual has some advantage over all others because he possesses unique information of which beneficial use might be made."

The circle of competence of each investor reflects his or her personal qualities including risk tolerance, temperament, interests, knowledge, intelligence, and judgmental ability.

Therefore, each step in the selection process will uniquely conform to the particular individual investor.

In addition, the circle of competence of each investor represents an arena where he or she has no competition from other market participants.

This arena is a confidential monopoly created by the investor. This secret monopoly position is a proprietary interest in intellectual property. With confidentiality, there is no second guessing of an investor's judgments by others.

The investor uses the tools and techniques of security analysis, but the investor's job is not the same as the security analyst's job.

Where a security analyst must be prepared to appraise the value of every common stock or other security traded in the market, the investor only needs to appraise those stocks in his circle of competence.

What's Forex

2008-02-06T19:59:00.000-08:00

FOREX (Foreign Exchange Market) - The global currency market of an exchange of certain currency of one country to currency of another country at the coordinated rate for the certain date. FOREX does not have any certain location of trade. It is a huge network where the currency dealers connected among themselves by the means of telecommunications concentrated on all World Financial Centers are working round the clock as a uniform mechanism. The basic participants of the currency market are: commercial banks, currency stock exchanges, the central banks, the firms which are carrying out the foreign trade operations, investment funds, the broker companies, private persons.
The main currencies which are shared on the basic volume of all operations in the FOREX market today are: the euro (EUR), the Japanese yen (JPY), the Swiss franc (CHF) and English pound of sterling (GBP) and US dollar (USD). The daily volume of conversion operations in the world makes about 2 billion US dollars. The turnover for the London market was about 30% of, for the market of the USA - 20%, Germany - 10%. Operations with US dollar make 70 %. About 15 % of turnover at FOREX market today is on a share of electronic brokers. The day time volume of operations of the largest international banks (Deutsche Bank, Barclays Bank, Union Bank of Switzerland, City Bank, Chase Manhattan Bank, Standard Chartered Bank) reaches billions of dollars. The operations of (spot) type or current conversion operations are transactions of sale and purchase of currency. Actual execution (value) of fallowing is carried out for the second working day after the day of the conclusion of transaction. Typical volumes of transactions in interbank trade make 10 million dollars, but due to the system of margin trade. The output in the market is also accessible to the persons having small capital. The brokers, rendering services of margin trade, demand entering of the mortgaging deposit and enable the client to make operations of currency sale and purchase for the sums, of 100 times bigger than the brought deposit. The risk of losses is assigned to the client. The deposit serves as the insurance for the broker. The international currency market has deep centuries-old roots. It has originated more than thousand years B.C. when the first metal money has appeared in Egypt . Money market operations in their present understanding have started to develop in middle Ages. It has been associated with development of international trade and navigation. Italian shroffs were considered as the first speculators with foreign currency. They earned on the currency exchange of the different states.
The currency exchange market has changed at the interstate attitudes development, getting more and more precise outlined. The most significant changes have been brought in the currency market development in XX century. Finding of modern features by the market began in 70th years of 20 centuries when the system of the fixed rates of one currency into another has been removed. After removal of restrictions on fluctuations of currencies the new kind of business based on profit extraction according to conditions of free system of the exchange rates changing. And change of a rate is caused by all possible market conditions and adjusted only by a supply and demand.
The basic stages of the world financial market development in 30th years of XX century. World financial crisis. Economical trading contacts are broken. Times of golden coin standard have gone to the past. In the middle of 30's London becomes the World Financial Center . Great British Pound becomes the base currency for trading operations and forming of currency reserves. And then pound had a slang name "cable" already. That was associated with the factor that transactions were conducted on the telegraph and the information was transferred by cable.
In 1930 in the Swiss city named Basel the Bank of the International payments has been created. The purpose of creation was financial support of the young independent states and the states temporarily testing deficiency of the payment balance.
1944
Bratton Wood conference has been conducted in the USA . It has been counted as the termination of the American-British rivalry. There were two largest figures at conference: John Maynard Keynes ( England ) and Harry Deckster Whyte ( USA ). They manage to create and accept the new order of world financial system development in current conditions.
Main notice of Bratton - Wood conference.
" The international currency fund becomes the major institute supervising the international financial and economic attitudes; " The currencies playing a role of the international reserves (dollar and de facto pound sterling) are proclaimed; The adjustable parities of currencies adhered to US dollar (the deviation 1 % is possible) established; the dollar is adhered to gold (ounce of gold - $35); " Members of IMF have the right to change parities only with the consent of IMF; " On transitional end all currencies should become convertible; for observance of this principle all governments undertake to store the international reserves, and if necessary - to make interventions on currency markets. " Members of IMF do a payment by currency and gold.
1947
The program of restoration of the European economy has been accepted in the USA for the suspension of communism approach. The USA state secretary Marshall depicts the plan in his report. According to following plan the economy of Europe will be improved up to that level when it can independently support the military potential. One of the problems was satisfying of "dollar famine". If in 1949 dollar obligations of the USA to Europe made 3.1 billion they have reached 10.1 billion dollars.
1958
The majority of the European countries declare free convertibility of the currencies.
1964
Japan has declared convertibility of its own currency. After the announcement of convertibility of the basic currencies it became clear, that the USA cannot stay able to support the price of $35 for ounce of gold anymore. Dollar inflation has made threat for the USA . Kennedy administration had been accepted a number of incorrect actions - the tax to the percentage differential raising costs of foreign borrowers, and the program of voluntary restriction of foreign credits is entered. The tax and restrictions were an incitement to occurrence of the new market - the market of Eurodollars.
1967
There was a devaluation of English pound that has stroked last blow on illusory stability of Bretton Wood system. In 60-s deficiency of the balance of payments in the USA leads to reduction of gold reserves with 18 up to 11 billion dollars. There is an increase of external duties of the USA simultaneously to it.
1970
Interest rates in the USA that generate the strongest crisis of dollar are sharply reduced. There was a massive capital outflow from the USA to Europe where the level of interest rates was higher.
May 1971
Germany and Holland declare temporary free fluctuations of the currency rates.
August 1971
Growth of deficiency of the paymen balance of the USA has compelled the president Richard Nickson to suspend convertibility of dollars in gold.
December 1971
The last attempt to keep Bretton - Wood system has been undertaken at the meeting in Smithsonian institute in Washington . The interval of deviations of exchange rates from parities has been increased up to 4.5 %.
To keep borders of an interval it was very uneasy. And later Bundes Bank has lead intervention for the sum of 5 billion dollars. It was the enormous sum at that time, but it has not brought the success. Currency stock exchanges in Europe and in Japan should be closed temporarily and the USA have declared devaluation of dollar on 10 %. The developed countries have stopped to support the fixed parities and were started up in currency navigation.
1973-1974
The USA had cancelled stage by stage with the tax to percentage differential and the program of voluntary restriction of foreign credits.
The Bratton-Wood system had stopped its existence.
Last years of Bretton - Wood system existence currency traders extracted big speculative profit during the periods following the termination of interventions of the central banks. After the refusal of the rates the opportunity of such profit extraction became strongly limited. Many banks have incurred large losses, and two known as "Bankhaus Hershtadt " in Colon and " Franklyn National " in New York - even have gone bankrupt because of unsuccessful speculative operations.
1976
The Jamaican conference ( Kingston ) has taken place. The representatives of major world states have generated new principles of World currency system formation. The states have refused use of gold as means of a covering of deficiency at the international payments.
The interstate organizations regulating currency attitudes, convertibility of currencies act as basic elements of new system. National currencies of the states act as payment means. Commercial banks act as the main mechanism by means of which the international currency transactions are carried out.
1978
European Voluntary System (EVS) is created. Core of EVS is the grid of cross-countries - exchange rates with the central and boundary values of exchange rates. Basically EVS reminds Bretton Woods. If the cross-country-rate comes nearer to the border, both parties are obliged to carry the intervention out. Deutch Mark is a key currency of EVS.
1985
Gradually ecu becomes not accounting, but the physical tool. Traveler's cheques denominated in ecu and credit cards are issued, banks open deposits in ecu.
January 1999
There was a new European currency called Euro which replaced ECU by its self. 11 European states have fixed exchange rates in relation to Euro. The European central bank started to operate a currency policy of the European currency union (EMU). The fixed exchange rates of participants of the European currency union to Euro:
EUR/LUF 40.3399 Luxembourg franc EUR/BEF 40.3399 The Belgian franc EUR/IEP 0.787564 Irish pound EUR/FIM 5.94573 The Finnish mark EUR/PTE 200.482 The Portuguese escudo EUR/ESP 166.386 Spanish peseta EUR/ITL 1936.27 Italian lira EUR/FRF 6.55957 The French franc EUR/DEM 1.95583 Deutch mark EUR/NLG 2.20371 The Dutch gulden EUR/ATS 13.7603 The Austrian shilling
As against other financial markets currency market is characterized by a great volume of the tenders, the lowest cost of spent transactions, and the fastest movement of money resources. It is the unique world market working 24 hours a day. Its liquidity has increased up to 1 billion US dollars a day. Now operations at the currency market are the basic source of incomes of world conducting banks, such as: Chase Manhattan Bank, Barclays Bank, Swiss Bank Corporation and so on. Soros's gamble on sale of English pound against DM which has brought billion dollars of net profit within 2 weeks became classical, having made Soros famous and having his charities begun. The opportunity of work in the financial markets of Asia, Europe and America became accessible, due to their association in one global communication network. 24 hour access on the currency market allows to open and close positions during optimum time and under the best price. Big profit can be extracted at rather small deposit during a short time interval. One phone call or simple pressing a key of "mouse" (at carrying out of operations with the help of our information-trading system) is enough to open position.