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?


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

Thursday, December 24, 2009


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.


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.


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.


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.


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.


US Retail Sales Report came in Stronger than Expected

Tuesday, December 15, 2009


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.


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.


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

Friday, December 11, 2009


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.


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.


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.


Dollar still rallying, Euro dodges some bullets

Tuesday, December 8, 2009


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.


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.


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.


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.


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.


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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