Economic situation is leading and thriving

Thursday, December 31, 2009

For the past six months of 2009, The Bank of England has been screaming at the British Prime Minister to stop his spending.

In fact, they have gotten so vocal for an organization that usually conducts its business behind closed doors and through confidential memos, that every newspaper in England – and most across the world, features their discontent on the cover.

The In September, the Times of London had a picture of Mervyn King, the BOE governor with a headline that read “No more stimulus” – while online versions of the story had titles – “Stop, we have no more money”.

It is interesting to see a little life out of the Brits with regard to self-criticism. It is worthwhile to note though that the BOE had it wrong – and still does. They are the spenders par excellence with their low interest rates not helping foot the cost of their 200 Billion Pound stimulus – which was extended earlier in the month until February, 2010.

The similarities between the US and England, spending silly in the name of recovery while the debt goes higher and higher, is laughable.

There is one difference though, no one is screaming for Obama to stop his spending. Treasury Secretary Timothy Geithner is issuing debt paper like its…..well, paper. He’s the hatchet man taking orders from the boss – and he knows his place is to look pretty, paint a nice picture and keep the printing presses full of ink.

To criticize the master could be punishable, and the US Constitution’s Fifth Amendment grants everyone the right to protect themselves against self-incrimination, perhaps this is why he does not come out, if he did he would have to admit complicity.

Not saying here that there were any criminal acts, but if it were you or I taking out loans, mortgaging ourselves to the levels that the US government has I can assure you there would be some criminal investigation into fraud and negligence.

The world is getting worse – and 2010 will see China and Russia strengthening their call for the world to adopt a global currency in lieu of the dollar. The UN will do the same.

And while there have been these ideas before, we are entering a period of fear driving decisions, where the irrational becomes the rational in order to save us all from economic disaster.

I fear that the UN will get their way as there is weakness in both London and Washington – backing China and Russia’s calls might just be a good solution to a problem the resentful third-world dominated UN has been looking for.

I fear a global currency system – as it will destroy the capitalism that has made so many wealthy – and enabled the free markets such as Forex. It will kill the Online Forex and commodity industries and turn us all into socialist sheep, following instead of leading and thriving. The day’s ahead are pivotal – will you remember where you were when the lights went out?

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Sterling falls on BOE revelations; Dollar pulls back after home sales disappoint

Thursday, December 24, 2009

GBP

The British Pound Sterling fell on Wednesday, after the release of the Bank of England’s policy meeting minutes were released.

The transcripts showed that all nine members of the Bank’s Monetary Policy Committee voted in favor of keeping interest rates at ½ of a percent and extend the 200 Billion Pound asset purchasing program.

The impression given by the minutes is that every committee member is sitting on a fence waiting for something to happen, declaring they will re-evaluate the situation in their February meeting.

This lack of leadership or dissent to some degree has unnerved Forex investors who are concerned that the Bank is not acting fast enough to wind down the stimulus measures implemented earlier in the year.

At 10:00 GMT, the Pound was trading down .07% against the US Dollar to 1.5933 after initially falling more than .5%. The Sterling was also down .27% against the Euro to .8946, down .24% versus the Japanese Yen to 146.25, down .47% to the Swiss Franc to 1.6666 and down .64% against the Canadian Dollar to 1.6771.

USD

The US Dollar gave back some its recent gains on Wednesday after a late session data release brought back doubts about the US economic recovery. New Home Sales, which were expected to rise to 440,000 dropped 11% to 355,000.

The October number also came back to ruin the holiday spirit for the Greenback as it was revised downward from 430,000 to 400,000.

The disappointing number was the largest drop since January and brought the housing market back to levels not seen in seven months.

The Dollar had been the benefactor of a spate of positive data in the past week that gave investors confidence in the strength of the recovery, however after five straight positive sessions, it appears as if the Dollar is set to give back some.

Today’s durable goods and initial unemployment numbers could set the tone for the last week of 2009 trading next week.

At 10:10 GMT, the US Dollar was trading down .51% to the Euro to 1.4317, down .44% against the Japanese Yen to 91.42, down .48% to the Canadian Dollar to 1.0521, down .35% versus the Australian Dollar to .8792, down .6% against the New Zealand Dollar to .703 and down .91% to the Swiss Franc to hold in at 1.0396.

Happy Holidays

This is the final Market review before the Christmas Holiday. We wish all of our customers the Merriest of Christmas’, Happiest of Holidays and most Joyful of New Years.

May you realize your dreams in the year to come, have success follow you wherever you go – and may peace fill this planet we all share.

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Currency market emaciated with bearish trend in EUR/USD

Wednesday, December 23, 2009

From the market, there are updates regarding the USD trade index that have made up its mind to move upwards as indicated by the Forex analysis reports of Monday and finally break the area of 78.00. it is the highest among the gains attained by the USD index since early September.

Recent news from the Forex info indicated that the currency pair trading market is undergoing through immense pressure with most of the currencies trading sluggishly.

Let’s have a quick look at some of the trading position of some of the major currency pairs including EUR/USD, USD/CHF and AUDUSD.

EUR/USD is experiencing some massive movements in the market right from the beginning of this week session, nonetheless the pair is presently trailing ahead similar to the trade points of Friday because none of the trade sides has profited in these two days trade activity.

There is nothing to say much regarding the pair position at the market as many trading question are still unanswered and it seems that everything will became clear after entering into 2010 on seeing the reports of December data releases.

Forex trading range of the pair is amid 1.4310 to 1.4215.

USD/CHF is showing interesting price action at the Forex trading platform with CHF trading well against USD and EUR aggressively. However, the same is the condition with this pair as well nothing can be clearly said about the price action of the pair as it is also trailing in accordance to the Friday’s trading position as signified by the Forex analysis.

The surprise drop in the CHF impelled the SNB to be involved in the currency market directly in order to lower down the values of their currency at the market. The surprise hike in the selling-off of the CHF kept the SNB unanswered. Apparent to support the consideration that this point down for the CHF was brought by Central Bank involvement.

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Let's have a glance at the Chart Analysis

Tuesday, December 22, 2009



Chart: EUR/GBP

The EUR/GBP had been trying to break down through the 200-day moving average last week, but the pair never managed to close below that Moving Average (now around 0.8870), nor has it yet fully threatened the key line of support around 0.8830 that stretches back to August.


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Chart Analysis: USD/JPY

Thursday, December 17, 2009

The Ichimoku cloud is approaching once again to the upside in the USD/JPY. This has been a key stumbling block for the pair’s rallies for some time. The disappointing news from the Federal Open Market Committee could provide a stumbling block for a move through the cloud as the Fed seems firm in their resolve to keep interest rates as they are for a while.

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US Retail Sales Report came in Stronger than Expected

Tuesday, December 15, 2009

USD

The US Dollar gained broadly on Friday after a Retail Sales report came in stronger than expected, boosting the hopes, once again, that the US will move to raise interest rates sooner than initially predicted. The US Commerce Department announced that retail sales had risen by 1.3%, a figure that was .7% higher than Forex analyst forecasts. On the same note, another report from the Commerce Department showed that Consumer Sentiment had also risen beyond expectations, adding to the belief that the consumer driven economy was beginning to gain momentum.

Investors are hoping these numbers continue their pattern as it is believed that if by the next Federal Reserve policy meeting in February, this data continues to show improvement, the Fed will likely be compelled to raise interest rates from their near zero level. A rise in the core rates will add to Dollar strength as the US currency will be more expensive to borrow.

At the close, the US Dollar was trading up .8% against the Euro to 1.4615, up 1.02% to the Japanese Yen to 89.1, up .1% versus the British Pound Sterling to 1.626, up .81% against the Canadian Dollar to 1.06 even and up .4% to the Australian Dollar to .9125. The Dollar also rose .82% against the Swiss Franc to close out the week at 1.0342.

GBP

The British Pound Sterling was mixed to slightly higher on Friday after a senior executive at Moody’s, the debt rating organization, said that the England’s ‘AAA’ rating is not in jeopardy at this time. The comments clarified a report earlier in the week which panicked traders who interpreted it as a warning that a rate cut was imminent.

According to the statement, the announcement last Tuesday regarding the state of US and UK sovereign debt rating was meant as a “wake-up” call to those countries that if their issuance of debt continues at this pace, the countries run the risk of having their ratings cut as the debt to GDP ratio will get out of hand.

The statement read: “While these are extraordinary times calling for non-conventional measures, it is not an excuse to act irresponsibly with regard to a nation’s percentage of debt to GDP. It is the fact that some countries are approaching this state that prompted the reminder to every one of the consequences that go with overspending. This was not meant as a specific warning that a decline in rating was imminent, rather a caution that one could come if responsibilities are not met.”

At the close, the Pound was up .7% to the Euro to .8986, up .92% against the Japanese Yen to 144.89, up .32% versus the Australian Dollar to 1.7815, up .7% to the Canadian Dollar to 1.7237 and up .73% to the Swiss Franc to 1.6818.

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FX News: Public Borrowing might cause England to lose its triple-A rating

Friday, December 11, 2009

GBP

The United Kingdom’s Finance Minister, Alistair Darling indicated that he will probably raise the estimate of borrowing by the government from a record 175 Billion Pounds, admitting that the recession has been deeper and required more intervention than he initially thought back in April.

The fear is that an increase in public borrowing might cause England to lose its triple-A rating if the country does not act to repair the state of its finances soon.

The fears on Wednesday were backed up by the downgrade of Greek sovereign debt a day earlier as well as the warning that Moody’s, the largest rater of corporate and government debt, gave to the US and UK regarding their spending and borrowing.

At 11:00PM GMT, the Pound Sterling was trading down .3% against the US Dollar to 1.6236, down .42% versus the Euro to .9063, down .37% to the Swiss Franc to 1.6664, down .98% against the Japanese Yen to 142.57, down .76% to the Australian Dollar to 1.788 and against the Canadian Dollar, down .58% to 1.7224.

USD

After a brief respite from the selling, the US Dollar returned to its losing ways on Wednesday a day after Moody’s warned the US of a rating cut should the borrowing and spending policy continue.

The Dollar had been up on the day broadly after short coverings and safe-haven flows in the wake of Greece’s rating downgrade to “A”.

However, after Forex investors realized that Greece is protected ultimately by the European Union, the safe have flows dropped off and traders working on the Moody’s warning fear came back in with their shorts.

At 11:10PM GMT, the US Dollar was trading down .05% to the Euro to 1.4708 after the Euro hit a month low against the Greenback. The Dollar also declined to the Japanese Yen by .78% to hold in at 87.73, down .13% against the Canadian Dollar to 1.0623, down .31% versus the Australian Dollar to .9064, down .61% to the Kiwi to .7111 and down .02% against the Swiss Franc to 1.027.

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US Fed Chair puts out Dollar Rally, ECB Pres. does the same

Wednesday, December 9, 2009

Taking the thunder from the recent USD rally, Federal Reserve Chairman, Benjamin Bernanke said that the US economy still faces a long and steep road to recovery, citing the 10% unemployment rate as the core proof.

The remarks were accompanied by a caution to the financial world that too much should not be read into the recent strong employment report as it is possible that the rate will stay high for some time to come.

The news busted the hopes of traders who thought a rate increase in the US was coming soon; Bernanke made it clear that it is not under consideration based solely on one positive report and that the low rates are what is driving the recovery that it now appears, the US is going through.

In choppy trading, the Dollar was mixed, floating into positive and then negative territory several times on Tuesday.

At 10:45PM GMT, the US Dollar was trading up .41% to the Euro to 1.4762, down 1.03% against the Japanese Yen to 88.56, up .66% to the British Pound Sterling to 1.6287, up .45% versus the Canadian Dollar to 1.0559, down .3% against the Australian Dollar to .9088 and up .4% to the Swiss Franc to 1.0236.

European Central Bank President Jean-Claude Trichet said that the Eurozone was facing a “bumpy road” towards recovery. As Forex investors began to feel a loosening on the ECB’s part, specifically with regard to the stimulus measures of buying underperforming assets, Trichet said that the ECB could easily halt the process of withdrawing emergency support measures for the economy if the need arose.

The words stopped a quiet rally in which the Euro was up broadly and the Euro began leveling off.

At 11:00PM GMT, the Euro was trading up .18% to the Pound to .9055, down close to 2 against the Japanese Yen to 130.42, flat with the Canadian Dollar to 1.5583, also even with the Australian Dollar to 1.6247 and up .01% to the Swiss Franc to 1.5117.

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Dollar still rallying, Euro dodges some bullets

Tuesday, December 8, 2009

USD

Monday saw the Dollar rise to levels not seen in more than five weeks against a basket of currencies, extending Friday’s rally that was sparked by a much better than expected jobs report.

The trading patterns indicate that there is much short covering of the Dollar, a theory floating through the market claims, as Forex online investors scramble to adjust their holdings after the good sign from the employment data.

Investors are now banking that the US will begin increasing its almost non-existent interest rates, helping to increase the Dollar’s value.

The ICE Futures Dollar Index was trading as high as 76.183, a five week high. The index tracks the USD’s performance against six of the major currencies in the Forex marketplace.

At 10:45PM GMT, the US Dollar was trading up .87% against the British Pound to 1.6329, up .61% versus the Australian Dollar to .9089, up .92% to the New Zealand Dollar to .7095 and up .58% against the Swiss Franc to 1.0223. The Dollar did decline on Monday, down .12% to the Canadian Dollar to 1.0565 and .75% versus the Japanese Yen to 89.92.

EUR

The Euro surprised investors on Monday by not showing any reaction to comments made by European Central Bank President, Jean-Claude Trichet, indicating that the Eurozone economy is continually showing signs of recovery.

German manufacturing orders also surprised investors as the indicator took an unexpected negative turn, however the Euro seemed unaffected – trading mixed to higher overall on the day.

At 11:00PM GMT, the Euro was trading down .5% to the US Dollar to 1.4786, down 1.09% against the Japanese Yen to 133.08, up .41% to the British Pound Sterling to .905, down .66% versus the Canadian Dollar to 1.5615, up .14% to the Australian Dollar to 1.6264 and up .12% to the Swiss Franc to 1.5117.

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Chart Analysis: USD/JPY

Monday, December 7, 2009

The reaction in the bond markets to the strong US employment data is providing support to the recent rally in the USD/JPY pair. The pair is within strike of 90.00 after the data and talk of a return to the downward spiral in the pair during the past few months has all but dissipated.

Bonds are also showing signs of recovering in support of this rebound theory, the 10 year US bond, the benchmark of all the US debt instruments, is inching higher and approaching the 3.5% yield level after a false break below the 200-day moving average in yields recently.

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Japanese Yen continues to Slide

Thursday, December 3, 2009

The Japanese Yen continued its slide on Wednesday after traders continued to interpret Tuesday’s last minute meeting by the Bank of Japan, as well as a bullish stock market as a reason to unload the low-yielding safe-haven. The Bank of Japan had said in that emergency meeting that it will allocate 10 Trillion Yen, roughly 114 Billion Dollars (US), to a short-term lending program at a fixed rate of .1%. The program is viewed as an alternative to the quantitative easing policies employed in 2001 which saw interest rates drop to zero resulting in a flood of cash entering the markets.

While a majority of analysts do not expect Japan’s anti-deflationary measures to slow the rise of the Yen in the long-term, it was enough to prompt a profit taking selloff. Most of those polled do not believe the measures, which include keeping short-term interest rates depressed, are enough to curb a strong Yen, there is hope that the process itself will lead to a natural decline in the Yen’s value as opposed to a drop that is the direct result of a more invasive governmental policy.

At 11:00PM GMT, the Japanese Yen was trading down .57% to the US Dollar to 87.16, down .63% to the Euro to 131.56, down .94% against the British Pound Sterling to 145.3, down .87% versus the Australian Dollar to 80.86 and down .61% against the Swiss Franc to 87.25.

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Chart Analysis: EUR/SEK

Wednesday, December 2, 2009

From a valuation perspective, the EUR/SEK looked stretched recently, as it tried to break above the previous 10.52 area high from early November.

The sell-off here looks justified, considering the easing of the fallout from the Dubai crisis in the world forex market, as well as a look over at the sovereign CDS market, where intra-EuroZone debt stresses are beginning to reappear, while the world looks very unconcerned with the quality of Swedish sovereign debt.

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Safe-haven flows ease on waning Dubai concerns

Tuesday, December 1, 2009

The US Dollar gingerly retreated from recent gains, after comments from the United Arab Emirates soothed loan default concerns, taking away for now, the flow of safe-haven funds.

The UAE’s Central Bank said on Monday that it would back the banks in Dubai after Dubai World, a private equity company, said it would need until the middle of 2010 to restart payments on its 59 Billion Dollars in debt accrued during the vast and elaborate expansion of Dubai’s infrastructure.

An interest payment of 3.5 Billion that was expected to be paid in December was the first payment to be affected by the declaration.

Some of the losses were stemmed by the Dollar however, and trends were indicating a continued upswing after a senior Dubai financial official was quoted as saying that the “Government of Dubai does not guarantee Dubai World debt” leading investors to question the Central Banks comments.

At 10:45 GMT, the US Dollar was trading down .15% to the Euro to 1.5008, up .03% to the Japanese Yen to 86.54, up .2% to the British Pound to 1.647, down .35% against the Canadian Dollar to 1.058, down .78% versus the Australian Dollar to .9131 and down .2% against the Swiss Franc to 1.0039. The ICE Dollar Future Index was trading at 74.70, close to the 15 month low it reached early last week of 74.170

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Safe-Haven Flows Return With Dubai Debacle

Monday, November 30, 2009

The Japanese Yen was widely mixed on Friday as safe haven flows came in after the Dubai news in Forex world, but traders’ exercised caution after The Bank of Japan stepped closer to currency intervention by checking exchange rates with commercial banks.

It was the first time in five years that the Japanese Central Bank made this kind of a move and it came in tandem with Finance Minister Hirohisa Fujii expressed outward concern about the increased valuation of its currency.

The Yen is pegged to the thriving exports that come from Japanese soil; a strong Yen discourages international buyers as it translates into fewer products for more money.

At the close, the Yen was up ¾ percent against the US Dollar to 86.5, down .1% against the Swiss Franc to 86.07, up .12% versus the British Pound to 142.57, down .2% to the Canadian Dollar to 81.473 and down .22% to the Australian Dollar to 78.54. The Yen was up 1.2% against the Euro to close the week at 129.69.

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Risk Appetite Returns after Positive US Data

Thursday, November 26, 2009

The US Dollar continued its fall on Wednesday, after a spate of data releases increased optimism in the US for an economic recovery. Three key pieces of data were released in the last Forex trading session before the Thanksgiving holiday on Thursday and all three were better than expected.

On the jobs front the US shed less jobs in this reading than it has for over a year, this while retail sales jumps higher than anticipated and home prices increase for the fifth straight month.

Minutes were also released fro the Federal Reserves meeting in which it was revealed that the Fed as a whole saw the falling Dollar as an orderly occurrence.

All of these combined brought risk appetite back into the markets and pushed the Dollar to a sixteen month low on the ICE futures Dollar index, a non traded index which matches the performance of the Greenback to 6 major currencies.

At 10:25PM GMT, the US Dollar was trading down .91% to the Euro to 1.5088, down 1.21% against the Japanese Yen to 87.48, down .55% versus the British Pound to 1.6674, down .84% against the Canadian Dollar to 1.0489, down 1.15% to the Australian Dollar to .9293 and down .86% versus the Swiss Franc to .9998.

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Chart Analysis: USD/JPY

Wednesday, November 25, 2009

A lot of focus is on the USD/JPY this week after today. If the pair closes the week at current levels or lower, it would be the lowest weekly close since 1995. These low levels are coinciding with the US 10-year benchmark skating along the key support at the 200-day moving average. A continued sell-off in the USD/JPY could be precipitated if yields continue to drop from here.


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Worry over the Dollar’s credit rating

Monday, November 23, 2009

Forex Investors continued to downsize their risk holdings as stocks and commodities slid again while the Dollar reaped the benefits for a second straight session. Many see this as an overdue bounce for the Dollar which has been down close to 15% since the first quarter of 2009.

As worry over the Dollar’s credit rating as well as rising deficits and national debt in the US sparked a flight from the Dollar, other investments such as oil and Gold, which recently hit an all time high.

As the year winds down analysts expect profit taking from the 9 month boom of alternative investments to continue. This would spell good news for the Greenback.

At the close the Dollar was up 1.1% to the Euro to 1.4859, up 1.22% versus the British Pound, up .33% to the Canadian Dollar to 1.0704, up .14% against the Australian Dollar to .9144 and up .19% to the Swiss Franc to 1.0175.

The Dollar did fall 1.14% against the Japanese Yen signalling that the interest in the Dollar’s resurgence is not as stable as people would like right now.

The ICE Futures US Dollar index, a non-traded indicator which measures the USD’s performance against six major currencies, was up on the day at above 75, well above a 15-month low of 74.679 which it fell to earlier in the week.

The jump was due however to what traders call a “faulty trade” which saw a double in average daily volume after the contract sold off at 76.50, a number never reached. This sparked a wave of limit orders which were cancelled upon clearing after the session.

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Chart Analysis: EUR/JPY

Friday, November 20, 2009

The 200-day moving average was the big focus of the day due to the number of times this level has served as a key pivot point in the past. If risk continues to adjust lower here and bond yields remain low or even drop further, we could see a move below the Moving Average and even a try at the lower end of the longer term range.

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Dollar Moves after Ben Bernanke’s comments!

Wednesday, November 18, 2009

The US Dollar continued its rebound started Monday on the heels of Federal Reserve Chairman Ben Bernanke’s comments. The Dollar also was helped by a profit taking selloff in stocks, oil and gold – all which have been steaming forward as of late. Coupled with all of the above, the European Central Bank President, Jean Claude Trichet commented that the Euro is not a substitute for the Dollar as a reserve currency and that the Dollar’s function as the primary reserve is essential. This gave investors and additional sense of calm amidst the Dollar’s recent weakness and worries about the prospect of it losing steam as the major reserve currency for the world’s major countries.

At 10:00PM GMT in the forex online market, the US Dollar was up.7% to the Euro to 1.4866, up .27% to the Japanese Yen to 89.28, up .11% to the British Pound to 1.6798, up .97% against the commodity reliant Canadian Dollar to 1.0576 and .9% versus the Aussie to .9267. The Dollar also rose .76% to the Swiss Franc to 1.0154 and .49% against the New Zealand Dollar to .7453.

Low interest rates and the prospect that they will not be going higher anytime soon is still weighing the Dollar down. Speculation by analysts suggests that it could be the middle of 2010 before the US in a position to raise their interest rates, a scenario that spells a long and painful winter for Dollar traders.

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Bernanke saves the day, but dollar still falls - just not as hard

Tuesday, November 17, 2009

The dollar fell across the board on Monday although it recovered some after the US Federal Reserve Chairman, Ben Bernanke, commented that the Fed was keeping its eye on the fluctuation in the Dollar soothing those that fear the out-of-control spiralling that the Dollar has been in for the past three months. The Fed chairman went beyond what is typical of a central bank head and spent a good portion of his speech to a private New York organization talking about the Dollar, a move that was seen as reassuring that the US will be quick to act before anything major happened to the Dollar.

At 11:38PM GMT, the US Dollar was trading down .48% to the Euro to 1.4974, down .6% to the Japanese Yen to 89.1, down .91% to the British Pound to 1.6828, down .4% to the Canadian Dollar to 1.0475, down .47% to the Aussie to .9372 and down .51% to the Swiss Franc to 1.0072.

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Dollar falls after poor Consumer and Trade Data

Monday, November 16, 2009

A spate of negative data on consumer confidence and trade gaps took the thunder out of a two day Dollar rally on Friday and brought the bears back to the US currency in a broad day of losses. A Reuter’s survey of consumers showed that the consumer confidence index dropped to a three month low of 66, a 5 percent from analyst expectations of 71. The November number is also a 4.6 percent drop from the October data. The data is especially hard to swallow now, during the start of the peak holiday spending season and bodes poorly for retail sales in the coming months.

At the same time, data from the September trade deficit showed the trade gap widened by 18.2 percent, the largest margin in over 10 years. The US Department of Commerce announced that the monthly trade gap ballooned to 36.5 Billion Dollars, up from a 30.8 Billion Dollar showing in August, analysts were expecting a small increase, to 31.6 Billion. The data showed that part of the issue is that the fall of the Dollar’s value is being offset by strong demand for US products while the costs have gone up on core commodities such as oil.

The average price for imports rose by .7 percent a .5 percent gain from the last report of a .2 percent increase in September, a number that analysts say is rising too fast and may spell trouble for the trade gap should this trend continue.

At the close, the US Dollar was down .38% against the Euro to 1.4901, down .8% versus the Japanese Yen to 89.63, down .59% to the British Pound Sterling to 1.6676, down .38% against the Canadian Dollar to 1.0514, down 1.02% to the Australian Dollar to .9328, down 1.43% versus the New Zealand Dollar to .7433 and down .47% to the Swiss Franc to 1.0124.

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BOE Governor's words tank the Pound

Thursday, November 12, 2009

The British Pound Sterling fell across the board on Wednesday, after the Bank of England’s Governor, Mervyn King, said a slide of the Pound could help UK exporters and aid Britain's recovery from recession.

The remarks came after the UK released data on inflation which came in below the target, a better than expected showing.

Forex Online Investors are nervous however, even with the good inflation news, that after the elections early next year, the new government will implement a policy of fiscal tightening, which will likely cut the asset-buying program, a program that is widely hailed as a success.

At 10:15PM GMT, the British Pound was trading down 1.2% versus the US Dollar to .9288, down 1.02% to the Euro to .9042, down 1.15% to the Japanese Yen to 148.6, down 1.1% against the Swiss Franc to 1.6691 and down 1.06% versus the Australian Dollar to 1.7802.

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Some Action Seen in USD while EURJPY showed some slow moves

Wednesday, November 11, 2009

The US Dollar rose from the lows set on Monday, after Forex investors sought to lock in profits from the steep fall. Analysts speculated that the mood on the street was that the Dollar fell too far, too fast and that was the cause for the pull back on Tuesday.

The trend on the USD is still lower, although and investors can be sure to see more down days in the future. The ICE Dollar index rose to just over 75 after falling to a fifteen month low on Monday.

At 10:20PM GMT, the US Dollar was trading up .2% to the Euro to 1.4968, up .1% against the Australian Dollar to .9286, up .2% to the New Zealand Dollar to .7415, up .14% versus the Swiss Franc to 1.0087 and down .2% against the Japanese Yen to 89.75.

Chart Analysis: EURJPY

A new four-day high was rejected today and interest rates have ticked sharply lower, suggesting there could be more downside pressure for the shortest term on JPY crosses.

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Chart Analysis: EUR/GBP

Tuesday, November 10, 2009

EURGBP trying to make a new foray to the downside today, but will likely need a good look at Wednesday's Quarterly Inflation Report before any decisive move can be made. Note the approaching 200-day moving average to the downside.

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Unemployment rate shocker boosts Dollar

Monday, November 9, 2009

The US unemployment situation worsened to levels unseen since 1983 prompting many Forex traders and investors to seek safe-haven shelter in the Dollar. The number of unemployed Americans rose to 10.2%, a .3% increase from expectations and amplified concern that while the economy is showing growth, the employment situation is dire.

Government estimates assumed the rate would not reach 10% until 2010 and the stimulus package signed in March was supposed to curtail the level to no more than 8.9%.

Meanwhile, the US House of Representatives passed a 1.3 Trillion Dollar health care package, bringing US sponsored health care to all Americans.

The contentious legislation is seen as adding to an already irresponsible debt load, making the boom of the past decade seem that much farther to attain.

At the close, the US Dollar was up 1.1% to the Euro to 1.4845, up .11% to the Yen to 89.95, up .24% against the Canadian Dollar to 1.0726, down .18% to the Sterling to 1.6611, up .27% versus the Swiss Franc to 1.0144 and down .45% against the Australian Dollar to .9229.

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Chart Analysis: USD/CAD

Friday, November 6, 2009

The USD/CAD looks interesting over the next couple of days. We have so far seen a basic retracement, with yesterday's close very near the 0.382 Fibonacci of the latest rally to 1.0870. Today's Ivey PMI and tomorrow's combination of both the Canadian and US employment data for October are likely to tell us whether the lows are in for now, or whether we could see a test toward the lower 0.618 Fibonacci in the 1.0460 area in the event of a further rally in risk appetite and a weaker USD. The sequence that put USDCAD back above 1.0590 after a try down to 1.0200 suggests that we should be looking for confirmation soon that a structural low (1.0200) is in place.

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Rising Stocks and Gold Sink Dollar on Wednesday!

Thursday, November 5, 2009

The US Dollar dropped on Wednesday against most majors, after a sharp rise in equities and commodities stole the Dollar's safe-haven appeal. The downturn happened as Forex investors waited for a policy decision from the US Federal Reserve Bank.

The Fed left rates unchanged as promised, helping fuel the flow into riskier investments. On the day, the ICE futures, which measures the Dollar against a basket of 6 major currencies was down to 75, down from the month high of 76.8172.

At 12:00AM GMT, the US Dollar was down .98% to the Euro to 1.4866, down 86% to the British Pound to 1.6569, down .23% to the Canadian Dollar to 1.0628, up .86% to the Australian Dollar to .9101 and down 1% to the Swiss Franc to 1.0154. The Dollar did rise .42% against the Japanese Yen to 90.67.

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Chart Analysis: GBP/USD

Wednesday, November 4, 2009

The GBP/USD was down testing close to the two-week low of 1.6250 Tuesday. This area also coincides with the 21- and 55-day moving averages and serves as the trigger for a larger downside view if a break holds.

It is always interesting when the Forex Online market is trading close to key levels ahead of big events, like FOMC later on today and Bank of England meeting on Thursday (just to name the two biggies) If support survives for now, the focus reverts to perhaps 1.6500 as an upside swing level and then the 1.6700 area.

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Dollar quickly returns to losing ways

Tuesday, November 3, 2009

The Dollar rally at the end of last week ended Monday, as the Dollar fell broadly. The decline confirmed thoughts that the rally on Friday had more to do with end of month short coverings, than optimism over the USD’s viability in the Forex market.

The Dollar was not helped by more manufacturing and housing data from the US that continued to show a resurgence of strength, prompting investors to go for assets with more risk and higher yields.

At 12:00 AM GMT, the Dollar was trading down .24% to the Euro to 1.482, down .09% to the Japanese Yen to 90.26, down .32% to the Canadian Dollar to 1.0775, down .18% to the Australian Dollar to .9034 and down .04% to the New Zealand Dollar to .7177.

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Chart Analysis: USD/JPY

Friday, October 30, 2009

The JPY remains the highest beta currency as the JPY crosses are reversing higher just as quickly as the sold off in recent days as the US GDP triggered a move higher in bond yields. Note that the USD/JPY found support right on the 21-day moving average, which has been an important Moving Average on several occasions over the recent cycle. For resistance, we'll watch the 91.54 retracement level and the 92.00-area daily Ichimoku cloud resistance. The JPY will need new local lows in bond yields to work back below 90.00 in the USD/JPY.

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Dollar Gains again on Weak Numbers

Thursday, October 29, 2009

USD

As with the disappointing consumer confidence numbers earlier in the week, the US housing market experienced a setback on Wednesday, as data showing an unexpected decline in US home sales was released.

The poor numbers came after an on-target durable goods report and helped the Dollar maintain its safe-haven flow intake. Forex analyst consensus for the housing numbers was an increase from September of 23,000 to 440,000; however the actual data showed a drop of 15,000 to 402,000.

At 10:15PM GMT, the US Dollar was trading up .63% to the Euro to 1.4709, up .02% to the British Pound to 1.6388, up 1.35% to the Canadian Dollar to 1.0791, down 1.11% to the Japanese Yen to 90.76, and up .47% versus the Swiss Franc to 1.0264.

AUD

The Australian Dollar suffered its worst trading day in close to four months, falling broadly and sharply to many currencies.

After a rally that has lasted several months, spurred on by positive growth and an apparent emergence from recession, the Aussie retreated after a data release showed that Australian consumer price inflation rose more than expected in the last quarter.

The Reserve Bank of Australia is meeting next week on interest rate policy, however the data does not seem likely to spur them to tighten already low interest rates.

At 10:20PM GMT, the Australian Dollar was trading down 2.25% to the US Dollar to .8967, down 1.55% to the Euro to 1.6397, down 3.25% to the Japanese Yen to 81.41 and up .17% to the New Zealand Dollar to 1.2335.

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Chart Analysis: USD/NOK

Wednesday, October 28, 2009

It would seem that if we are moving into a bit larger correction mode here, then the likes of NOK might be a higher beta currency and see an especially sharp correction vs. the greenback due to the popularity of carry trades pairing the USD with commodity currencies.

A squeeze in the short term could introduce surprising volatility to the upside in the short term. The JPY/NOK might even be a bigger mover if bonds find encouragement after today's US auction results.

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Chart Analysis: GBP/CHF

Tuesday, October 27, 2009

There is not a specific currency pair in focus today, but the recent moves in this currency pair are a great example of the 0.618 Fibonacci in action. First we had a major low established recently and then we saw a very strong rally taking out some key resistance levels followed by a sell-off that exactly bottomed out at the 0.618 Fibonacci of the first corrective wave. The outlook looks higher from here as long as we maintain above the 1.6380 area low.

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Pound takes a Pounding after GDP Data!

Monday, October 26, 2009

GBP

As Forex online investors expected the UK economy to turn out of recession and into mild growth, the Bank of England announced that the economy had in fact contracted by .4%, making this the longest recessionary period since the 1950’s.

As a result, the British Pound suffered broad losses on Friday and rekindled fears that the BOE would expand its emergency asset purchasing program in November.

At the close, the Pound was down 2.1% to the US Dollar to 1.6304, down 1.3% to the Euro to .9202, down 1.7% to the Swiss Franc to 1.646 and down 1.3% to the Japanese Yen to 149.93.

JPY

The Japanese Yen also suffered a dismal day on Friday, after Japanese Banking Minister, Shizuka Kamei, said that the economy needed an infusion of about 10 Trillion Yen in order to help lift the island nation economy out of the steep slowdown.

This prompted fears of out of control debt similar to that of the US economy and took away safe-haven appeal for the Yen.

At the close the Yen traded down 1.1% to the US Dollar to 91.92, down 1.23% to the Euro to 138.02, down .89% to the Australian Dollar to 84.58 and down .87% to the Swiss Franc to 91.08.

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Dollar falls again on Interest rate Worries

Saturday, October 24, 2009

The Dollar retreated yet again on Wednesday as continued doubts over a US recovery focused attention on stagnant interest rates.

Forex Analysts have been speculating that the world’s major economies are winding down their stimulus programs and gearing up to raise rates amidst optimistic signs that a recovery is at hand.

Yet recent words from key US figures like Fed Chairman Bernanke and Treasury Secretary Geithner suggest that the US is a long way from raising their core rates which are hovering near zero. This inaction would diminish demand for the Dollar as yields around the world would prove more profitable for traders.

At 1040PM GMT, the US Dollar was down .47% to the Euro, breaking through the technical 1.50 mark to hold at $1.5013. The Dollar was also down .64% against the Canadian Dollar to 1.0426, down .42% to the Aussie to .9275, down 1.35% to the Kiwi to .7594 and down .55% versus the Swiss Franc to 1.0059. The Dollar was up against the Yen, rising .18% to hold in at 90.92.


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Dollar rebounds after Asian and European concern over its Weakness

Wednesday, October 21, 2009

USD

After hitting a 14 month low against a basket of currencies on Monday, the Dollar rallied on Tuesday after Henri Guino, a top French economic advisor said that the weak Dollar is a disaster for the Eurozone.

The sentiment in the Forex market was also echoed by a top Chinese official who is concerned with the recent strength of the Yuan versus the USD and was quoted as saying that there needs to be a turnaround for the Dollar soon or it will adversely affect the Chinese economy.

China is the largest US debt holder and as such has been vocal about bringing about a change in the reserve system. However, Tuesday’s comments showed how susceptible the Chinese economy is to a weak Dollar, quelling, for the moment, talk of ditching the Dollar.

At 10:00 PM GMT, the USD was up .21% to the Euro to 1.493, up .15% versus the Japanese Yen to 90.7, up .32% to the British Pound to 1.6366, up .73% against the Australian Dollar to .9222 and up .07% to the Swiss Franc to 1.012.

CAD

The worries about Dollar weakness have also seemed to affect policymakers to the North as the Bank of Canada left interest rates unchanged, a move that prompted traders to punish to Canadian Dollar on Tuesday.

The US and Canadian Dollars closed last week off near parity, and as a result, it appears from the BOC’s statements that this level helped shape their decision to leave interest rates at a record low .25 percent.

At 10:10PM GMT, the Canadian Dollar was down 2.05% to the US Dollar to 1.0492, down 1.92% to the Euro to 1.5672, down 1.45% versus the Australian Dollar to .9688, down 1.58% to the Japanese Yen to 86.44 and down 1.72% against the British Pound Sterling to 1.7175.

Chart: GBP/USD

There has been much talk about the GBP/USD Tuesday with its move through the trend-line resistance.

The big support at 0.9080 was also in play in the EUR/GBP. The Bank of England’s leader, Mervyn King could either confirm or spoil the technical break Wednesday. From a fundamental perspective, it's tough to see what the driver should be for a further appreciation in the GBP/USD.

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Forex News by Finexo.com

Monday, October 19, 2009

USD

Friday’s US data and Q3 earnings reports probably gave us a timely reminder of how fragile and patchy the economic rebound really is and markets tended to favour the “risk-off” trade heading into the weekend. While the industrial production and capacity utilization data looked solid on the headline, the current need to adjust numbers for the impact of the one-off cash-for-clunkers vehicle sales. In essence, the improvement of +0.7% was only +0.4% ex-vehicles, and still showed a 6.1% year-on-year decline. The preliminary University of Michigan confidence index was also significantly lower coming in at 69.4 versus 73.1 expected and 73.5 last. On the Q3 earnings front, Bank of America cast a cloud over earlier more-buoyant results when it revealed a larger-than-expected loss of rising consumer defaults.

CNY and EUR

China was hitting the headlines on Friday, and over the weekend, as the US Treasury highlighted that China’s piling up of foreign reserves threatened to slow the correction of global imbalances, though again fell short of branding the Chinese authorities as a currency manipulator. Similar thoughts seem to be surfacing again in Europe as well with the head of euro-zone finance ministers Jean-Claude Juncker announcing that he, ECB chief Trichet and EU Monetary Affairs Commissioner Almunia would travel to China before year-end to discuss the Yuan’s exchange rate. A similar visit went ahead in November 2007 where the EU plead for a faster appreciation of the Yuan, a plea that was rejected at the time by Premier Wen Jiabao.

Meanwhile on the China economic front, various officials have been more upbeat about the recovery. The chief economist at the National Bureau of Statistics said that China’s V-shaped recovery could extend into next year. An official from the National Development and Reform Commission also said that China would have no difficulty in reaching the 8% official target for the full year 2009, having already reached 7% in the first 9 months of the year.

GBP

The pound was pressured by articles in the Sunday Times and Telegraph with the former highlighting comments from MPC member Posen. Posen said he was in favour of increasing quantitative easing and was not so concerned about overshooting inflation in the current environment. The QE comments ran contrary to those from BOE’s Fisher and Bean last week, who favoured a “pause and wait-and-see” approach. Additional pressure was piled on by an article in the Telegraph, quoting the Confederation of British Industries who warned that Britain risk a sterling crisis if public finances are not brought under control by 2015-16.

Read more Market Review here...

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US at Front to Pull off themselves from Existing Troubles

Wednesday, October 14, 2009

It’s true that the US economy is retaining back to its growing track as the media and some Forex experts have declared that the recession phase has come to an end.

Still it’s not the time to relax for the US officials because they are well informed of the fact that the economy is recovering but not with the desired pace.

The US economic recovery does not indicate any sign of employment generation so that they can delay the trillion-dollar relief program to safeguard the interests of the citizens.

Right now, US have two self-created problems in front of them seeking fast resolution. These are the coming election of 2010 and meeting the Federal Reserve Debt limit of 12.1$ trillion as soon as possible.

Both these situations are forming a vicious circle around the US government officials because foe conducting elections government require financial support in big amounts and the hands of the US are tied up in limits.

They have restricted resources to borrow and expend on elections because the more they borrow the more will be the debt pressure on the economy.

If the employment opportunities do not increases or if further drop takes place in the jobless claims that will bring the victory of US Democratic Party in question in the upcoming elections due to decline in the number of voters.

The problem is that employment generation require funds and funds will be arranged only when the economy is stabilized.

What are the plans of US government to deal with this kind of situation are still unclosed. There is no clear way visualizing to get out of these interconnected troubles.

The officials are trying every option to find the best possible trading option that can lift the value of the weakening USD.

The economic data suggests that the US economy has recovered with 3.2% of growing speed in the last 3Q. However, that will be more speedy then long-term trading trends that will add on the public investments, further weakens the USD and increase the inflation rate.

There is a need to consider the long-term results of each action, as the US government has to control the increasing Federal deficit, inflation rate and maintaining the USD value against all the major currencies to survive at the Forex trading platform.

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Chart Analysis: GBP/USD

Tuesday, October 13, 2009

Forex Charts:

The GBP/USD managed to stave off new lows today below 1.5800 as GBP, USD and JPY fight for lowest spot on the currency totem pole. Today's low and the 1.6110 area are the two key trigger areas for the GBP/USD's next larger move now.


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Canada Jobs Shocker

Monday, October 12, 2009

The Canadian Dollar though resisted the rising US Dollar on Friday, after a jobs report showed that the commodity reliant economy created jobs that totalled 600% more than analysts had called for.

The unemployment rate in the North American country fell for the first time in 14 months.

At the close of the Forex market, the Candian Dollar was up .13% to the Euro to 1.5371, up .21% to the Australian Dollar to .9436, up .15% to the Japanese Yen to 85.96, and up .13% to the British Pound Sterling to 1.653.

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Chart Analysis: AUD/USD

Thursday, October 8, 2009















The performance in AUD/USD looks very strong, and while the AUD/USD has just crossed the .90 mark, the expanding triangle formation we are seeing is a classic bearish one - though we would certainly wait for a break of the lower bound of the formation for confirmation in Forex Charts.

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Forex News: Reserve Bank of Australia raised their core Interest Rate to 3.25%

Wednesday, October 7, 2009

Skirting widespread speculation, the Reserve Bank of Australia raised their core interest rate by a quarter basis point to 3.25%.

The move put Australia in front of all other Western nations, making them the first to raise rates amidst the current economic crisis and sent the Aussie on an upward tear through Forex Online pairs.

The rate hike also helped spur on stock markets across the globe as optimism grew that the global economy was recovering.

At 12:05AM GMT, the Australian Dollar was trading up 1.53% against the US Dollar to a 14 month high of .8904, up 1.25% to the Euro to 1.653, up .76% against the Canadian Dollar to .9433 and up .33% versus the Japanese Yen to 79.06.

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Dollar take another hit after G7 confirms trader doubts on Dollar Viability

Tuesday, October 6, 2009

USD

The Dollar began this week as it ended last, on a down note after a weekend meeting of Finance Ministers and Secretaries from the Seven (G7) wealthiest nations highlighted the street’s view that the world’s financial policy makers are also foresee a gradually weakening Dollar. T

he meeting was seen as tense as conflicting views between China and the US continued to dominate the headlines. The Dollar was also hurt by a bounce in US and global stocks, which rose for the first time in four sessions and further reduced the need for a safe-haven currency.

At 11:50PM GMT, the US Dollar was down .2% to the Euro to 1.4651, down .04% to the Japanese Yen to 89.53 down .03% against the British Pound Sterling to 1.5938, down .63% to the New Zealand Dollar to .7305 and down .41% against the Canadian Dollar to 1.5681.

AUD

The Australian Dollar rose fast across the board, after two prominent Aussie journalists speculated that Australia's Central Bank could raise their core interest rates to 3¼% from a record low 3% this Tuesday's, as the Reserve Bank of Australia meets.

Still, many in the Forex market expect that the RBA will hold off this month and make the rate hike in November. Nonetheless, traders felt positive and boosted the Aussie.

At 12:00PM GMT, the Australian Dollar was up 1.1% to the US Dollar to .8777, up .3% to the Euro to 1.6687, up .45% to the Canadian Dollar to .9395, and up .06% to the New Zealand Dollar to 1.2009.

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Dollar Falls as US Economy Shows Signs of Life

Thursday, October 1, 2009

The US Dollar was lower against most of the major currencies on Wednesday, after a mixture of reports suggested that the US economy was edging closer to a recovery.

The first and most significant of these reports was a revised GDP report for the second quarter which showed that the US economy shrank, although at a slower rate than initially projected.

Last month, the US commerce department announced the economy fell at a rate of 1% in quarter 2, however Wednesday that number was revised upwards to .7%.

Other data contributing to the Dollar’s performance in the Forex market was a revised ADP employment service report for August which shaved 21,000 unemployed people off the list, from an initial 298,000 to a revised 277,000 job cuts.

Also, September’s initial numbers came in at 254,000, the smallest decline in the job market since the summer of 2008. The ADP numbers show the performance of private sector payrolls.

The US Labor Department will release its September payroll figures on Friday morning. The statistics are considered more comprehensive because they include both the private and public sectors.

It is expected to show the labor market's rate of deterioration slowing, with analysts forecasting a loss of 180,000 jobs in September versus 216,000 in August.

At 10:30PM GMT in Forex Charts, the US Dollar was off .22% to the Euro to 1.4633, down .11% against the Japanese Yen to 89.78, down .32% versus the British Pound Sterling to 1.6005, down .13% to the Canadian Dollar to 1.0686, down .15% to the Australian Dollar to .8839 and down .09% against the Swiss Franc to 1.0361.

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EUR/USD Analysis

Wednesday, September 30, 2009

The USD still looks neutral against a basket of currencies as compared to the rest of the G10 countries, even if the EUR/USD still appears to be in correction mode due to a broadly weak Euro - strong support comes in not much lower in the key 1.4450 area, which must be taken out to start any credible downside technical arguments.

A recovery back above 1.4650 is needed in the near term to aid the argument for a rally back to the recent top.


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Another Pointless Photo-op!

Thursday, September 24, 2009

The G20 is happening as I write this, located in steel town USA, Pittsburgh Pennsylvania, one of the most depressing places to be at the moment as its 15% unemployed sit on the sides watching the rich and powerful converge on their domain.

The idea that this meeting is going to accomplish anything substantial is obscene, the recent G20’s were nothing more than a show, a photo-op for the leaders of the World to look like they were getting along and doing something – but time has proven that this was nothing more than a charade.

The interesting issue at hand here is the Forex traders, who have been anxiously awaiting what will happen in Pittsburgh. The tabloids want to know the dirt, while the finance people want to know the scoop – but in the end, there will just be a bunch of bull.

The fact is, these guys need to look like they are working together and that they get along, but in reality they do not. The old adage of “what’s good for me is not necessarily good for you” is very much at play here.

Take the China-US argument over tire tariffs as an example. These two mammoth nations, arguably the largest economies around, are trying to work together to solve global economic problems and here they have a fundamental disagreement over US policy.

China wants to sell the US tires, they are cheaper and they (Chinese tire imports) make up about 30% of the overall US tire industry.

But the US, under pressure from unions and interest groups just issued a special tariff on the tires that China equates with protectionism.

Now, as global leaders working toward a common goal, one would think that they could find common ground – but they cannot.

If the G20 decide that the US must lift the tariff (this is not their call – but use this as an example) do you think the US really would? Of course not.

So how can the world of Forex trading and equity markets hold their breath waiting for something tangible. Everyone in that room is interested in their own issues – and if a policy proposal is in contrast with those issues, there can be no agreement.

Bottom line, keep to the numbers – don’t rely on the words being spoken by the world’s leaders – keep your eyes on how their economies are fairing and trade accordingly. This is the only true smart play.

Trade safe.

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A Kiwi Surprise

Highlighting my theory that nothing big is happening this week because of political and inter-governmental distractions such as the UN convention in NY, today sees the Forex world doing back flips over the GDP numbers out of, of all places, New Zealand.

Yes, the kiwi is soaring to heights unseen in well over a year. And what was this stellar number out of the land of good wine, Rachel Hunter (if they did nothing else in their history, giving the world Ms. Hunter would have been enough) and a green fruit?
The GDP of kiwi-land grew by a seasonally adjusted .1% - a tremendous achievement that deserves of all the fanfare it is getting.

I am 99% certain that if the investment world was actually focused on their profession this week, this would be a non-story.

All kidding aside, considering that the New Zealand GDP was expected to contract by .2%, the miniscule rise takes them out of recession, officially if not practically, and demonstrates yet another emerging economy that is faring better than the world’s leading industrialized nations – (throat clearing sound) like the US, Britain and Japan.
Forex traders are actually riding a wave that is continuing the cycle that started down under with Australia.

The south Pacific is becoming the place to be as of late and the economies of Australia and New Zealand are beginning to provide more options for investors and traders alike.

I do not believe that this would be possible if there was not a crisis going on, but the fact that there is one gave the down under dollars a chance to prove their true worth.

In an environment when the “big-boys” are struggling hard, to come to the point where you are thriving – or at least perceived to be thriving is an achievement.

Without the credit crisis and subsequent recession, the opportunity to shine never would have presented itself.

For the lack of anything else going on in the Forex Online Market today I close this day’s jaunt from anything interesting by saluting the New Zealand economy on their tremendous achievement and while it is strange that the Kiwi is leading the rally in the major’s today – let them know to revel in this moment as it will not be long before this news is old news.

Here is your fifteen minutes kiwi’s – and thank you for Rachel Hunter. Trade safe.

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The Stare that Changed it All!!

Tuesday, September 22, 2009

So Monday seemed to be one of the most boring trading days of the year. With nothing that compelling to trade upon, investors followed the same old pattern of shoring up their positions in advance of a US Federal Reserve meeting – not that there was any reason for it, it seemed almost habitual.

The UN is meeting in New York for their big annual opening ceremony and the G20 will be meeting in the US on Thursday, the world is waiting for the outcome of these events and I personally think it is giving the investors a minor break.

As I foresaw yesterday, the equity markets are beginning to turn downward and the safe haven flows are trickling into the Yen and USD again, but it is not like it used to be. The Dollar is in trouble and everyone knows it, including the US President, Mr. B.H. Obama.

Sunday was a day like no other in US history - the US President went to four news studios to be interviewed on their notorious “Sunday Morning Talk Shows” – a US pastime in which hot political topics are securitized by a panel of so called professionals and occasionally an official from the administration is interviewed, but rarely if ever at all has a sitting US president participated. As well, Mr. Obama also hit the late night TV circuit, usually a lighthearted comedy style talk show, and again, a sitting US president has never done this before.

The topic of the conversation was primarily about his health care reform, an increasingly unpopular policy that is struggling for survival in the US. But the talk show hosts repeatedly went over to the state of the Dollar – and Mr. Obama repeatedly brushed off the questions as not being the most important thing facing the US at the moment. This worked until one moderator, George Stephanopoulos who used to work for President Bill Clinton, tied the concerns people have over health care reform to the state of the Dollar.

Pointing out that the 1 Trillion Dollars needed for the program will serve to only inflate the US currency. Forex traders should have seen the face of the President at this point - it was as if someone had taken the dessert off of his plate.

The face said it all, and his words after that meant nothing – although he denied that the two are interlinked and gave some half-baked answer using words and terms most people do not understand.

The fact remains though that this is the reality. The US Dollar is in trouble. The UN wants to change the reserve status. The Chinese want to change it as well. The Russians are playing the same game and the US does not seem to think there is an issue. Watch as the Dollar trends downward, and watch as the world becomes more vocal about US spending policy.

I said yesterday to keep clear of the Pound – and after watching the US President squirm, albeit only once, at a tough currency related question – I am leaning towards putting the UISD on that list too.

As a Forex trader I can tell you, there was more behind that look he gave, and I am not one who wants to wait it out and see what he is hiding, because it cannot be good.

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Automated Forex Trading: Some Interesting Facts

Friday, September 18, 2009

Is your overwhelming debt burden giving you sleepless nights? It really makes you feel bad. You have taken money from your family members and acquaintances. Banks and other lenders have turned you down. If you’re troubled by this type of a situation, you should look for some really good profitable ideas and tips to combat your debt. You might be astonished to hear that automated forex trading can help you in debt settlement. Making investment in forex can alleviate your financial problems. You can use the money made from forex trading for settling your debts with a debt settlement program.

When you’re into forex trading, your main goal as an investor certainly is to gain profits from foreign currency movements in the market. There is a range of income-generating opportunities in the forex market and some of them are as follows:
  • Zero commission trading options
  • 24-hour trading
  • Unrestricted accessibility to forex dealers all over the world
  • Opportunity to make money from both rising and falling markets
  • For leveraged trading, the investors have the chance to trade with low margin
To put it briefly, if you truly have a serious approach towards making profit, forex investment is an appropriate option for you. With the arrival of automated forex trading, the forex investors have been successful to manifold their investment in the forex market. Some of them even claim that they have not experienced any losses from 1999 when they commenced using automated forex trading facilities.

Some of the significant advantages provided by automated forex trading include the following:
  • The initial investment is small
  • The forex market is a large market where the volume of currencies traded is worth trillions of dollars. If you take the help of automated forex trading, it becomes easier for you to trade.
  • Automated forex trading can help you trade round the clock or 24 hours a day.
  • The forex market is highly volatile. Automated forex trading helps you by managing your risks.
  • Under an automated forex trading system, there is no restriction about the volume of trading.
  • For investors who are using automated forex trading system, large fluctuations in forex prices signify good profit.
Nevertheless, it is worth keeping in mind that nobody can control the forex market. Despite the reality that more and more people are using the automated forex trading system, they don’t have the capacity to control the market.

Within one or two days, automated forex trading system can convert hundreds of dollars into thousands of dollars. The most important aspect of automated forex trading is that you don’t have to be an expert in the domain. You only need to install the program and the rest would be managed by that.

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Big Wheels Keep on Turning - Will they soon Stop?

Thursday, September 17, 2009

What can save the economy? If anyone had a clue I am sure they would have done it already, but the fact remains that no one is sure as to what is going to happen.

The speculation of the traders is that the crisis is over, the stock markets are n their way to record September highs while the Forex market is providing good returns for many of the major currencies.

The one to suffer seems to be the US Dollar, and many are even attributing this to enthusiasm about the return of risk appetite – there is no need for a safe have now.

But as usual, I tend to not agree with this philosophy. There is a disturbing trend in the Australian Dollar and Japanese Yen – typically, when one rose broadly, the other fell, but this is not proving to be the case at this time, in fact, they are almost mimicking one another.

It is as if the Aussie has replaced the greenback as Japan’s safe-haven compatriot, but this too is not the truth. The JPY is getting a boost from a newly elected government which is promising to change the way things have been done for 50 years.

Can you imagine, that in 50 years the same party has led the government? That is mind blowing to me and yet as the Japanese people watch history in the making, the new government, the ultra-liberal government, is hinting that they do not care to intervene in “trivial” matters such as the plight of the currency on the Forex market.

Investors have been finding this way of thinking to be refreshing and great – “quick, mom and dad went away for the weekend, let’s have a party” or “ooooh, the candy store is empty, lets raid it” – they are like unattended children.

This cannot last. In contrast, the strides that the Australian Dollar has made are real and true. The economy is not as bad as some of the larger Western ones and the commodity rich country is benefitting from a sharp rise in core prices. This is the real deal and I believe that this will continue. There might be some profit taking in the Aussie, but the overall trend line will be upward.

The economy as a whole is poised for a comeback, but with too many unknowns right now, the Forex traders need to proceed with caution.

I hold that we will see another drop in GDP and production in the coming months, I believe we will see banks fail – or struggle – as I have written before under the weight of the commercial real-estate market and illiquidity issues. The need for vigilance is apparent, trade safe and keep your eyes open.

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