Stock gains pushed US dollar up against yen
Monday, October 13th, 2008
On Tuesday, dollar moved up session high as strengthened by recovery in stock bazaar of US with the rise in technology shares. A gain in US equities was observed buoyed by $700-billion rescue scheme of government of United States.
Investors are hoping that the bailout package will help in soothing down the lending as well as strengthen the capital spending.
After trading half percent up at 105.94 on Monday, dollar rose session high at 105.99 against the yen at EBS.
Director of foreign exchange trading at Scotia Capital in Toronto, Steven Butler, said that according to the scenario it looks like the trading sector is being forced to buy US currency. He also said that while the rise in stocks is easing the market, it still doesn’t t mean much as the market is unstable.
On Monday the Australian dollar rose to a three-week high
Tuesday, October 7th, 2008
Maintaining the craving for high yielding currencies after the government of America declared a plan that will help in stabilizing worn out financial system, on Monday the Australian dollar witnessed a three-week high. In a week three-year Australian bond futures posted their major one day downfall with a loss of 0.22 points at 94.44 along with the ten year bond contract came down 0.254 points to 94.194.
With the investors came back to their trades, the Australian Dollar also increased as compared to the yen. The local currency was at 88.43 yen off at 89.78 which is a two-week high of 89.78, but up from 86.59 on Friday. It was around 4:10 p.m. that the Australian dollar was at $0.8299 as compared to American dollar, already raised to $0.8402 which was a three week high earlier.
On September 17th the Australian dollar came down to $0.7799 which was one-year low with the credit markets witnessed disorder of the carry trades. It also reduced the whole viewpoint of universal development and prices for the goods/services. On Friday the American Treasury moved to settle the financial markets, with a plan worth $700 billion for the purchasing of the bad mortgage related liabilities from various financial institutions. This also included American units of foreign banks in an attempt to stem the most awful financial crisis.
According to Mr. Joseph Capurso who is a currency strategist at Commonwealth Bank, risk hunger has been strengthened considerably on American news and with this the markets has been confident that a major upset may be saved. If the plans are accepted by the market then there are probabilities that this week we can witness a rise in the Australian dollar.
After the investment bank Lehman Brothers fell down the American package came up, the Federal Reserve gave $84 billion in help to American International Group and Treasury took over the mortgage leaders Fannie Mae and Freddie Mae. Morgan Stanley and Goldman Sachs also renounced their status of investment banking to be converted into bank holding companies those are controlled by American Federal Reserve for providing security in financial scarcity.
The Australian dollar also increased with the high prices of commodity along with the increase in oil prices which is stable over $104 a barrel and the gold with $867 per ounce. For the past few years Australia has been very good with the resources and is a big exporter of products/services. On Monday Australian Bureau of Agricultural and Resource Economics was of the view that both the iron ore and copper will be going ahead from its previous predictions.
Morgan Stanley signs a letter to sell 20% stake
Tuesday, October 7th, 2008
On Monday, Morgan Stanley announced that a letter has been signed with objective of selling of 20 percent of the firm to Mitsubishi UFJ Financial Group Inc.
The firm did not disclose the financial terms of the deal. While the letter signed by the banks is said to be nonbinding, Morgan Stanley hopes to raise a price based on its book value following the completion of diligence review by the largest bank of Japan, if the deal is done.
The whole idea of the deal comes after the approval from fed to Morgan Stanley for becoming a bank holding firm. This major investment bank of Wall Street was allowed by Federal Reserve to become commercial bank in order to accept deposits. Now, this key firm of Wall Street will not be regulated by Securities and Exchange Commission anymore; instead will come under the Federal Reserve.
Morgan Stanley’s chairman and chief executive, John Mack, in a statement said that the deal would give opportunity to grow to both the banks as well as chance to make it big globally. He also added that the partnership would help the changeover of Morgan Stanley to a commercial bank as well as give a financial support to the firm in shoring its capital base in the time of credit crisis.
Past week has been busy with reports of sale of Merrill Lynch & Co to Bank of America, filing of bankruptcy by Lehman Brothers Holdings Inc and selling of Morgan Stanley.
Indian Rupee touches 2 year low against greenback
Monday, October 6th, 2008
Rupee reclaimed its ground at 45.85/86 against US dollar, after it lowered down in early trade with a two year low of 46. The gain had been a result of drop in local stocks and dollar’s weak position in abroad.
The Indian rupee strengthen at 45.53/55 against dollar after it had a close of 45.75/76 and later the currency reached 45.46, pushed by fall of dollar against major currencies. Although in late morning trade, rupee dropped to 45.85/86 against dollar, a level last reached in 10th October 2006 with a close of 45.80/81 a dollar.
In early trade, the Indian currency was found 25 paise down to 46 in opposition to greenback. According to foreign exchange dealers, the outcome of rupee hitting a low is a result of fall of Asian stocks as well as fine amount of dollar purchase done by banks.
Greek Unemployed Rate Falls to 10 Yr Low In 2Q
Friday, October 3rd, 2008
The quarterly unemployment rate of Greece came down to 7.1% in the second quarter of the year and the most striking part is that it is their ten year low. According to the data available from National Statistics Service on Thursday, it came down from 8.2% rate in the first quarter. According to the available data there was an ongoing job increase in just about all the industries and areas and brought continual unemployment rate in order with the Euro-zone averages in Greece.
According to a statement by Manolis Kontopyrakis who is the chief of the statistics services, with this data we are very pleased that we are experiencing a downfall in unemployment in all areas and sectors of the country. He also added that we have sufficient facts and figures to make a prediction that in the coming two quarters the ratio of unemployment will fall down more. This is for the first time that the yearly rate of unemployment for the current year will be below eight percent since the analysis got began in the year 1998.
Especially for the current year Mr. Manolis made a prediction that the standard rate of unemployment would be 7.7%. According to the new received data as compared to first quarter’s 4.50 million, the number of employed went up to 4.56 million in the second quarter. In the second quarter the unemployment rate for male was 4.6% which also witnessed a downfall from a 5.4%. As for the females the unemployment came down to 10.8% which was earlier 12.2%
Going according to the age group, the unemployment rate mainly comprised of the young population, here also the unemployment for the age group between 15-24 age groups came down to 15.4% in the second quarter which was 17.3% in the first quarter. Going according to the region in the year’s first three months main unemployment rate was in the industrial region of Western Macedonia where the unemployment was 12.3% which came down a little from 12.5%.
The islands of northern Aegean having the lowest unemployment rate, here also the unemployment fell to 4.1% in the second quarter earlier which was 5.3%. Attica where half of the Greek population lives, unemployment rate came down to 6.0% in the second quarter from 6.5% in the first.
Greece is happy with a healthy economic growth i.e. of 3.4% in the second quarter so far which is not influenced by any financial problems. But the employment opportunities stayed poor and were quite behind the average mark.
Dollar falls as Lehman talks of filing for Bankruptcy
Wednesday, October 1st, 2008
Monday witnessed a fall in US currency in Asian trade bazaar, as Lehman Brothers statement raised concerns regarding stability of financial system of United States. The Brothers sparked possibility of rate cut by Federal Reserve, by confirming about their plans for filing for bankruptcy.
From Friday’s closing point of 107.86, US dollar fell 2.3 percent down at 105.45 yen . Whereas the euro stumbled from 153.43 to 152.26 yen. With trade being thin during holiday in Japan, yen gained heavy with investors hanging on to it. Yen hasn’t gained this big since 2002.
On Sunday, chain of urgent and emergency actions was taken by Federal Reserve. The measures were aimed at controlling economical markets as well as to calm down commotion or disturbance following the end of Lehman. Out of the steps measures, one major step was to take equities the same as collateral. According to this change, equities will taken as collateral in support of cash at special credit facility. Fed has taken such step first time in its history so far.
Head of investment research at Bank Julius Baer, V. Anantha Nageswaran, called Federal Reserve’s such ability as a negative point for the United States currency. On Monday, Treasuries scaled on to the concern regarding Lehman, as the measures for rescuing Wall Street investment bank weakened along with the talks that insurer AIG was in quest for urgent funding. According to the statement made by Lehman Brothers, the firm would file for economic failure. Lehman also added that the filing would not include any of its broker-dealer subsidiaries.
In the meantime, reports came regarding acquirement of Merrill Lynch & Co Inc by Bank of America Corp for an amount of $44 billion.
Head of bond fund Pimco, bill gross, said that the decision of filing for bankruptcy could lead to turbulence in the market.
America faces business differences against China
Tuesday, September 30th, 2008
According to China’s WTO mission on Friday, China has started a dispute against America at WTO (World Trade Organization) over the American actions of importing certain steel pipes, woven sacks, and tyres. According to a statement, believing that two-sided discussion between China and America failed to resolve the problems of China. China had asked for consultation with America under the WTO dispute settlement mechanism concerning those measures.
This is the second trade case that was initiated by China. It is evident that it was in the previous year’s month of September when China challenged the actions of America against their imports of coated sheet paper. One of the Chinese officials was of the view that going according to the consultations under WTO dispute method with America, Washington had ruled out that there is in fact no danger to the American business of paper and for that case there are no actions that needs to be used.
Without going to WTO panel China solved the case in their favor, though WTO didn’t gave any sort of confirmation that the case was really solved. It was the year of 2002 when China joined the case, after few months of joining the WTO, started by European Union against American actions on steel imports which afterwards America lost. China being the second largest exporter regularly has to face trade issues and America challenged China so many times from importing taxes on car parts to the safeguarding of the intellectual property.
It was the July’s unsuccessful ministerial talk looking for a get through in WTO’s Doha round where China conflicted with America over America calls to get rid of the taxes in some of the industrial areas and suggestions to protect the countries from the impact of agricultural tax cuts. According to mission statement, China has time after time showed their concern to America about the Commerce Department actions undertaking unjustly pricing, Chinese subsidies for various products, and imports. These include- round welded carbon quality steel pipe, laminated woven sacks, light-walled pipes and tubes in rectangular shape, and new pneumatic off-road tyres.
Week high rise in Taiwan Dollar
Thursday, September 25th, 2008
Monday witness a week high rise in Taiwan Dollar on quick foreign finance inflows following a stock market pushed forward, due to intervention to lift the local currency by central bank. Taiwan Dollar augmented to around T$31.498 to USD, which is 1.2 percent higher to T$31.875 i.e. the close of Friday.
The soaring point of the day was also the strongest intraday level ever since September 1. The Taiwan dollar had soared to a high of T$31.610, by 0239 GMT. At the first hour and 30 minutes, the main Taipei Forex Inc exchange volume was $896 million, which was $426 million higher than what it was at the same period in preceding session.
After trending down for last few months following the weak status of stock market, on Monday the Taiwan Dollar recovered from its losses. However, the currency is stills 5.3 percent low since it touched a 10-1/2-year high of T$30.
According dealers in Taipei, the Taiwan dollar has experienced a huge push following the improvement in Taiwan stocks, which got its boost due to foreign fund buying. With central bank trying to support and sustain Taiwan Dollar for last few months, officials on Friday made calls to dealers inquiring about USD purchases with currency hitting six and half month lows. Many dealers said the move of central bank of Taiwan calling up to inquire about USD was intended to make sure the Taiwan currency does not deteriorate or weakens after hitting six and half months lows.
With six-month NDFs quoted at -0.430/-0.380 in contrast to Friday’s session of -0.180/-0.130, USD sales were in on the go momentum, in non-deliverable forwards market. This clearly meant that the investors believed in huge degree strengthening of Taiwan Dollar, in half a year. From the last close of T$31.903, Taiwan Dollar toughened to T$31.610 to the USD on smaller Cosmos exchange.
Traders look forward to ECB and Boe, as the dollar trips
Tuesday, September 23rd, 2008
With traders locking in profit from the remarkable gains by dollar in last few weeks, Thursday saw the currency slipping down the board. As the dollar slipped, investors anticipated interest rate judgments by European Central Bank and Bank of England.
On Wednesday Euro touched an eight month low, as the US currency positioned itself to smash a five-day winning line. After the rate pronouncement, traders were left to anticipate any comments from Jean-Claude Trichet, the ECB president.
The rates are being left unchanged by ECB at 4.25 percent. While re-leaping collateral regulations, it is being anticipated that ECB might issue new set of financial or economical projections. The rate announcement is expected to come at 1145 GMT prior to a news conference of Jean-Claude Trichet.
Analysts and experts are expecting Jean-Claude to steady his acknowledgment slow and lower growth with a strict and sturdy attitude on the consequences of knock-on price rise.
Strategist at RBS Global Banking, Paul Robson, said that people hoping that Jean-Claude would maintain his tough attitude. He said that the new collateral regulations as well as the higher inflation outlook and descending growth prediction is expected to offered mixture of policy issues for the market and experts to think over, which might add to instability of euro.
Robson also added that the day of unchanged rates in UK and euroland could prove to be a remarkable one with the press conference of ECB. Rate decisions from central bank became the theme for the day, as Riksbank of Sweden raised the rates to 4.75 percent by 25 basis points in highly anticipated decision. But with a prediction of a fall in borrowing costs in upcoming weeks has put Sweden under a pressure of selling.
The European currency rose to $1.4510 as it pulled back from the previous day’s hit of $1.4384, a 0.1 percent of rise since January, where as the dollar was found moving up as it touched 108.50 yen.
With a 0.4 percent of increase in oil prices, the currency of US was weighed down as the dollar index .DXY skidded to 0.1 percent. The fall in oil prices is recovering from a fall of 9 percent so far in the current week.
Prior to any holding of rates by BoE at 5 percent, Sterling moved up to $1.7820 with a rise in 0.4 percent. But in order to support weak economy there is expected a cut in the works. On Wednesday, the anticipation of cut has pushed the currency of UK to a two and half year low.
Following an announcement from Riksbank, euro moved up to 9.4761 with a 0.2 percent rise.
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Reserve Bank of India generated surplus on weak rupee
Monday, September 22nd, 2008
Reserve Bank of India has cashed huge surplus on weak rupee. To stay steady in foreign exchange market, RBI sold a part of Forex reserves.
RBI has witnessed an increase in its growth by 45% for year 2007-2008 from foreign exchange market. The record growth is assisted with a record Rs 15,011 crore surpluses transferred to the government, whose accounting year finished in the June of 2008.
The total income of central bank rose 41 percent more, as it saw the growth of income from initial amount of 41,039.73 crore (the profit earned by the sale of SBI shares is excluded) to Rs 57,750 crore in the year 2007-2008. Central bank’s major source of income is foreign exchange operations, capital gains/losses on foreign currency securities, discounts gains/losses in Forex trading, and comprising interest.
With 90 percent of Reserve Bank of India’s income being generated from foreign exchange, the financial year of 2007 saw an increase in foreign sources as it went soaring from Rs 35,152.99 crore to Rs 51,883.27 crore.
Another area of profit used by central bank was the sale of dollar since the beginning of April, when dollar reached higher level of price from the level it was brought, which benefited the bank a lot. Reserve management strategy of the bank for the year included a prominent feature where it pulled out of deposits with reign commercial banks those hit by sub-prime emergency.
Since central bank has been lending to banks suffering tight cash situations on regular basis, it is expected of it to profit from hike in repo rate in the existing year. The cash situation of many banks has been stiffening up due to a hike in reserve requirements (CRR) by the central bank, which is a part or amount of deposits with the Reserve Bank of India. The funds or amount of money parked with central bank as CRR does not provides any interest rates to banks.
Sunday, March 7, 2010
Forex: USD/JPY moves in ranges between 92.35 and 92.00
fxstreet.com
USD/JPY has been moving inside a range with support at 92.00 and resistance at 92.35, since the beginning of the American session. The pair is now near resistance zone of the range, in case the Dollar recovers further the next resistance lies at 92.55. On the other side, if the pair managed to break below 92.00 the next support lies at 91.70 and below at 91.40. Greenback is falling for the fifth consecutive week and is facing a downward trend that started two year ago.
USD/JPY has been moving inside a range with support at 92.00 and resistance at 92.35, since the beginning of the American session. The pair is now near resistance zone of the range, in case the Dollar recovers further the next resistance lies at 92.55. On the other side, if the pair managed to break below 92.00 the next support lies at 91.70 and below at 91.40. Greenback is falling for the fifth consecutive week and is facing a downward trend that started two year ago.
FOREX-U.S. dollar slides to 2009 low vs euro 9/09/2009
Currency update
$A Prices9 September,2009
09/09/2009 13:16 Sydney, Australia.
Currency Value Change
USD 0.86 -0.19%
GBP 0.5202 -0.42%
EUR 0.593 -0.27%
JPY 79.39 -0.21%
CAD 0.9264 -0.38%
* Investors in risk-seeking mode as global stocks rise
* Diversification talk keeps dollar on back foot
* Euro breaks above $1.45, highest since December (Recasts, updates prices)
NEW YORK, Sept 8 (Reuters) - The U.S. dollar on Tuesday sank to its lowest level against the euro this year as volume returned after a summer lull and traders sold the currency amid a rosy global outlook.
Analysts said the dollar could resume seasonal declines as liquidity increases after a brief period in which the greenback rose following upbeat economic indicators.
The U.S. currency, seen as a safe haven in times of uncertainty and financial distress, tends to fall when investors' risk appetite increases.
Further weighing on the dollar were renewed concerns about the status of the greenback as the world's reserve currency sparked by a United Nations agency report on Monday and news out of China expressing concern about printing money to fund Treasury purchases. For the UN report, click on [ID:nL7696421].
"The dollar has been beaten down by several news headlines -- with the UN report and the China news," said Jacob Oubina, currency strategist, at Forex.com in Bedminster, New Jersey.
Britain's Telegraph newspaper over the weekend reported that China was concerned about the Federal Reserve's policy of printing money to buy Treasury debt, which could threaten to set off a serious decline of the dollar and compel China to redesign its foreign reserves policy.
The report quoted a top member of the Communist hierarchy, Cheng Siwei, former vice-chairman of the Standing Committee and now head of China's green energy drive.
"All these things are dollar-negative. This is a reminder that the U.S. dollar is poised for some weakness in the months ahead," Oubina said.
In addition, the euro's push above $1.45 should pave the way for significant gains. The euro rose as high as $1.4535, the highest since December 2008.
In late afternoon trading, the euro last traded 1.2 percent higher at $1.4508.
NEXT TARGET FOR EURO/DOLLAR
HSBC said in a research note "the increased participation and liquidity (as summer trading ended) would theoretically increase the chances that the latest rise in euro/dollar can be extended."
HSBC said the euro's next upside target is $1.4720, a breach of which should propel the unit to its highest in nearly a year.
Against a basket of major currencies, the dollar slumped to its lowest in nearly a year. The ICE Futures' dollar index <.DXY>, which measures the value of the greenback against a basket of six currencies, fell to 77.047 -- its lowest since late September 2008. The index was last at 77.3064, down 0.9 percent.
"As we enter the first trading day after the summer, investors are decisively in risk-seeking mode," said Camilla Sutton, a currency strategist at Scotia Capital in Toronto.
Over the past two decades, September has been the second weakest month of the year for the dollar against the euro, with December being the weakest, according to data compiled by RBS Global Banking and Markets.
"Today's price action may likely be the beginning of the next leg lower on the dollar," said Scotia Capital's Sutton. "It all started when gold led the move higher in commodities, and as it broke the key $1,000 level it helped push the dollar even lower."
Gold earlier jumped to $1,007.45 an ounce , its highest since March 2008. It was last trading at $993.70. The yellow metal tends to track moves in the U.S. dollar inversely, as it can be bought as an alternative asset to the greenback. It is also cheaper for non-U.S. investors to buy gold if the dollar falls.
U.S. crude futures also rose sharply on the New York Mercantile Exchange and traded above $71 a barrel .
Sterling, meanwhile, rose to $1.6587, its highest in two weeks against the dollar, spurred by a bigger-than-expected increase in UK industrial production. [ID:nONS004469] It was last up 0.9 percent at $1.6488.
$A Prices9 September,2009
09/09/2009 13:16 Sydney, Australia.
Currency Value Change
USD 0.86 -0.19%
GBP 0.5202 -0.42%
EUR 0.593 -0.27%
JPY 79.39 -0.21%
CAD 0.9264 -0.38%
* Investors in risk-seeking mode as global stocks rise
* Diversification talk keeps dollar on back foot
* Euro breaks above $1.45, highest since December (Recasts, updates prices)
NEW YORK, Sept 8 (Reuters) - The U.S. dollar on Tuesday sank to its lowest level against the euro this year as volume returned after a summer lull and traders sold the currency amid a rosy global outlook.
Analysts said the dollar could resume seasonal declines as liquidity increases after a brief period in which the greenback rose following upbeat economic indicators.
The U.S. currency, seen as a safe haven in times of uncertainty and financial distress, tends to fall when investors' risk appetite increases.
Further weighing on the dollar were renewed concerns about the status of the greenback as the world's reserve currency sparked by a United Nations agency report on Monday and news out of China expressing concern about printing money to fund Treasury purchases. For the UN report, click on [ID:nL7696421].
"The dollar has been beaten down by several news headlines -- with the UN report and the China news," said Jacob Oubina, currency strategist, at Forex.com in Bedminster, New Jersey.
Britain's Telegraph newspaper over the weekend reported that China was concerned about the Federal Reserve's policy of printing money to buy Treasury debt, which could threaten to set off a serious decline of the dollar and compel China to redesign its foreign reserves policy.
The report quoted a top member of the Communist hierarchy, Cheng Siwei, former vice-chairman of the Standing Committee and now head of China's green energy drive.
"All these things are dollar-negative. This is a reminder that the U.S. dollar is poised for some weakness in the months ahead," Oubina said.
In addition, the euro's push above $1.45 should pave the way for significant gains. The euro rose as high as $1.4535, the highest since December 2008.
In late afternoon trading, the euro last traded 1.2 percent higher at $1.4508.
NEXT TARGET FOR EURO/DOLLAR
HSBC said in a research note "the increased participation and liquidity (as summer trading ended) would theoretically increase the chances that the latest rise in euro/dollar can be extended."
HSBC said the euro's next upside target is $1.4720, a breach of which should propel the unit to its highest in nearly a year.
Against a basket of major currencies, the dollar slumped to its lowest in nearly a year. The ICE Futures' dollar index <.DXY>, which measures the value of the greenback against a basket of six currencies, fell to 77.047 -- its lowest since late September 2008. The index was last at 77.3064, down 0.9 percent.
"As we enter the first trading day after the summer, investors are decisively in risk-seeking mode," said Camilla Sutton, a currency strategist at Scotia Capital in Toronto.
Over the past two decades, September has been the second weakest month of the year for the dollar against the euro, with December being the weakest, according to data compiled by RBS Global Banking and Markets.
"Today's price action may likely be the beginning of the next leg lower on the dollar," said Scotia Capital's Sutton. "It all started when gold led the move higher in commodities, and as it broke the key $1,000 level it helped push the dollar even lower."
Gold earlier jumped to $1,007.45 an ounce , its highest since March 2008. It was last trading at $993.70. The yellow metal tends to track moves in the U.S. dollar inversely, as it can be bought as an alternative asset to the greenback. It is also cheaper for non-U.S. investors to buy gold if the dollar falls.
U.S. crude futures also rose sharply on the New York Mercantile Exchange and traded above $71 a barrel .
Sterling, meanwhile, rose to $1.6587, its highest in two weeks against the dollar, spurred by a bigger-than-expected increase in UK industrial production. [ID:nONS004469] It was last up 0.9 percent at $1.6488.
What moves the currency rates?
A lot of reasons can have their hands behind the fluctuating market and currency rates, and not one or two can be blamed for any sort of rise or fall in them. Although it would not be entirely wrong to say that the Forex market business is more or less based on these fluctuations only. Traders trade in this market, purchase and sell various currencies with the expectation of making gains if the value of the exchange moves in their favor. Now this sudden movement in the market can be caused by either market news or current events all over the world, which have an effect on the demand and supply of these currencies.
This law of demand and supply is what works well in this Forex market too. When the demand of a particular currency goes up, its market price also escalates as compared to the other currencies in the market.
Similarly, if the demand of a particular currency goes down, traders are no longer interested in holding it back with them, and so the market price of the currency also decreases.
Economic development
It is quiet obvious that the traders trading in currencies and interested in exchange markets, will be equally keen and interested in knowing about the overall economic development of the countries whose currencies they hold, or are interested in buying. Every trader wants to be convinced that they economy they are about to invest in is developing with a solid and steady growth, which can be known by studying various factors such as unemployment, import and export, and the GDP statistics of a particular country.
Rise in Unemployment experienced by any particular country is considered as a negative factor, whereas a fall in Unemployment is always measured as a positive aspect.
Similarly, an increase in the GDP figures of a particular country is considered as a positive feature, whereas a decrease in GDP figures is always measured as a negative aspect.
Also, a mount in the Exports numbers of a particular country are always considered as a positive trait as compared to the decrease in Exports numbers which is looked upon as a negative aspect.
Political strength
Lots of factors are responsible for determining the political stability of a particular country. These factors can be any kinds of alterations in government or by the government, rising unemployment rates, elections or international and political conflicts.
Every investor is cautious enough and considers all these factors in his mind before going in for investing in a particular economy.
Any kind of Political conflicts, natural calamity or terrorism attacks or wars are major contributors in making or marring the economy of a country.
Interest Rates
Around the world, interest rates are always followed by money. If the interest rates of a particular country rise up, investors big and small from all over the world would want to invest their money with it in order to gain higher returns on their investments.
Mostly it can be said that if you want to capitalize on higher investments, then you have to keep an eye on the rise and fall of the interest rates in a particular country. And the factors which will help you determine this rise and fall are mostly the financial rise indicators in addition to the speeches of the current leading, dominating and significant figures like big politicians, iron and steel magnets and businessmen.
The interest rate movements generally take place during the programmed meetings by the central banks like BOE, FED, ECB, and BOJ.
An increase in the Interest Rates is always considered as a positive factor for a particular country as compared to the decreased in Interest Rates.
This law of demand and supply is what works well in this Forex market too. When the demand of a particular currency goes up, its market price also escalates as compared to the other currencies in the market.
Similarly, if the demand of a particular currency goes down, traders are no longer interested in holding it back with them, and so the market price of the currency also decreases.
Economic development
It is quiet obvious that the traders trading in currencies and interested in exchange markets, will be equally keen and interested in knowing about the overall economic development of the countries whose currencies they hold, or are interested in buying. Every trader wants to be convinced that they economy they are about to invest in is developing with a solid and steady growth, which can be known by studying various factors such as unemployment, import and export, and the GDP statistics of a particular country.
Rise in Unemployment experienced by any particular country is considered as a negative factor, whereas a fall in Unemployment is always measured as a positive aspect.
Similarly, an increase in the GDP figures of a particular country is considered as a positive feature, whereas a decrease in GDP figures is always measured as a negative aspect.
Also, a mount in the Exports numbers of a particular country are always considered as a positive trait as compared to the decrease in Exports numbers which is looked upon as a negative aspect.
Political strength
Lots of factors are responsible for determining the political stability of a particular country. These factors can be any kinds of alterations in government or by the government, rising unemployment rates, elections or international and political conflicts.
Every investor is cautious enough and considers all these factors in his mind before going in for investing in a particular economy.
Any kind of Political conflicts, natural calamity or terrorism attacks or wars are major contributors in making or marring the economy of a country.
Interest Rates
Around the world, interest rates are always followed by money. If the interest rates of a particular country rise up, investors big and small from all over the world would want to invest their money with it in order to gain higher returns on their investments.
Mostly it can be said that if you want to capitalize on higher investments, then you have to keep an eye on the rise and fall of the interest rates in a particular country. And the factors which will help you determine this rise and fall are mostly the financial rise indicators in addition to the speeches of the current leading, dominating and significant figures like big politicians, iron and steel magnets and businessmen.
The interest rate movements generally take place during the programmed meetings by the central banks like BOE, FED, ECB, and BOJ.
An increase in the Interest Rates is always considered as a positive factor for a particular country as compared to the decreased in Interest Rates.
Technical Analysis - Indicators
Technical Analysts believe that all the financial markets move by trends. They are of the opinion that Forex trading market is not that unpredictable as it seems to some. If the past movements and price trends of the market are thoroughly studied, then according to the technical analysts, current as well as future movements of the market prices can be easily estimated.
And for sighting these past trends and movements and representing them clearly and orderly, Technical indicators are used. These indicators are basically figures and data of past market records based on diverse statistical calculations. These indicators facilitate the traders using technical analysis, to predict if there are any continuations or turnarounds in the market trends.
There are many different types of technical indicators which are used in technical analysis, a few of which are given below:
Trend indicators
The continuances or reversals of a price movement in any particular direction over a period of time can be defined as a Trend or a Pattern. It is believed by the technical analysts that trends seem to move in three directions, either up, or down or sideways.
Trend indicators are used to even out inconsistent price records and stats to produce a combination of market trends. They also reflect the direction and the momentum of the current trend. The most common Trend indicator is Moving Averages.
Flux indicators
Flux or volatility indicators are used to reflect the degree, or magnitude, of everyday rate variations with or without describing its direction. These indicators are important as it is seen that variations in volatility can be liable to show traders a way to price changes. The most common Flux indicator is Bollinger Bands.
Support / resistance indicators
Support and resistance indicators are used to reflect orderly, the effect of the basic process of demand and supply on the price levels due to which the markets ascend or descend time and again. The most common Support / resistance indicator is Trend Lines
Oscillators/ Momentum indicators
Oscillators/ Momentum indicators are used to reflect systematically, the momentum at which rates or prices move about in a specified period of time. They help the analysts in establishing the advantage or disadvantage of a trend or pattern as it develops over a time period.
It is believed that strength of a trend or a pattern is maximum at the initiation of a trend and minimum at crossroads or transition phase of a trend. The most common Oscillators/ Momentum indicators are RSI, Stochastic and MACD.
Sequence indicators
Sequence indicators are those which are used to signify recurring trends in any market movements, related to repeated patterns or events such as specific time of the year, wars, elections etc.
Due to such events and happenings, many financial markets have a trend of moving in cyclic patterns. The most common Sequence indicator is Elliott Wave.
Strength indicators
These indicators are used to reflect market strength and the power of market opinions relating to an outlay by studying the market situations obtained by different market traders and investors.
Being the fundamental elements of this indicator, Volume or open interest generate signs that are immediate or driving the market. The most common Strength indicator is Volume.
These days, nearly all charting packages contain some of the above mentioned technical indicators. Traders while choosing a charting package can easily add their preferred technical indicators to their charts.
And for sighting these past trends and movements and representing them clearly and orderly, Technical indicators are used. These indicators are basically figures and data of past market records based on diverse statistical calculations. These indicators facilitate the traders using technical analysis, to predict if there are any continuations or turnarounds in the market trends.
There are many different types of technical indicators which are used in technical analysis, a few of which are given below:
Trend indicators
The continuances or reversals of a price movement in any particular direction over a period of time can be defined as a Trend or a Pattern. It is believed by the technical analysts that trends seem to move in three directions, either up, or down or sideways.
Trend indicators are used to even out inconsistent price records and stats to produce a combination of market trends. They also reflect the direction and the momentum of the current trend. The most common Trend indicator is Moving Averages.
Flux indicators
Flux or volatility indicators are used to reflect the degree, or magnitude, of everyday rate variations with or without describing its direction. These indicators are important as it is seen that variations in volatility can be liable to show traders a way to price changes. The most common Flux indicator is Bollinger Bands.
Support / resistance indicators
Support and resistance indicators are used to reflect orderly, the effect of the basic process of demand and supply on the price levels due to which the markets ascend or descend time and again. The most common Support / resistance indicator is Trend Lines
Oscillators/ Momentum indicators
Oscillators/ Momentum indicators are used to reflect systematically, the momentum at which rates or prices move about in a specified period of time. They help the analysts in establishing the advantage or disadvantage of a trend or pattern as it develops over a time period.
It is believed that strength of a trend or a pattern is maximum at the initiation of a trend and minimum at crossroads or transition phase of a trend. The most common Oscillators/ Momentum indicators are RSI, Stochastic and MACD.
Sequence indicators
Sequence indicators are those which are used to signify recurring trends in any market movements, related to repeated patterns or events such as specific time of the year, wars, elections etc.
Due to such events and happenings, many financial markets have a trend of moving in cyclic patterns. The most common Sequence indicator is Elliott Wave.
Strength indicators
These indicators are used to reflect market strength and the power of market opinions relating to an outlay by studying the market situations obtained by different market traders and investors.
Being the fundamental elements of this indicator, Volume or open interest generate signs that are immediate or driving the market. The most common Strength indicator is Volume.
These days, nearly all charting packages contain some of the above mentioned technical indicators. Traders while choosing a charting package can easily add their preferred technical indicators to their charts.
Essentials in Forex
There are quite a few basic essentials which a trader should learn well, when it comes to trading Forex. These are some of the tools that the trader will need at various stages of Forex trading.
Evaluating Profit and Loss
If you are trading through an efficient online trading platform, it is likely that you will be provided with an automated calculation of your Profit and Loss vis-à-vis your open positions in the Forex market. This facilitates the trader, making it easier for him to keep track of his position and movement in the market automatically.
Nevertheless, it is still helpful for every Forex trader to know and comprehend the calculation through which, these results are derived.
Knowing all about Margins
Advantages are many, when it comes to getting good margins for trading. Margin can be known as the minimum amount required to be deposited before an investor starts trading. This can also be known as the initial amount with which the Forex trading account can be opened.
With bigger margins, you can get more buying power in your hands. For example, if you have $5,000 worth money in your margin account which also provides 100:1 leverage, then you can easily buy about $500,000 of exchange.
This is for the reason that you only have to position 1% of the buying price as security in your account. Thus, in other words, you have a $500,000 worth of buying power in your hands.
This is exactly why trading exchange with a margin account facilitates you to raise your buying power. Margin accounts can also allow you to enhance your overall return on investment with less capital pay out.
But what needs to be kept in mind always is that, while trading on margins can increase your profits, there is an equal and opposite possibility that it can amplify your losses as well.
Making use of a Margin account for Forex trading can definitely turn out to be a profitable investment strategy, but only if you manage your account wisely. Along with the profits, what also should be considered seriously are the risks which are involved by getting more buying power with lesser cash outlay, as this may also lead you to lose more than you have at times too.
Also, always make sure that you thoroughly read the margin agreement which occurs between your payment firm and you. Talk to your account representative if you have any questions.
In the cases where the margin available in your account drops below a preset boundary, there are 99% chances of your account positions being partly or completely shut down.
Also, there is a possibility that you might not even get a margin call before closing down your positions.
To avoid such a risky situation, it is always advisable that you supervise your margin account stability regularly to keep a check that your money does not stoop as low as the margin set.
Also, make appropriate use of correct stop-loss orders along with every open position. Setting a stop-loss order will help you limit your risks and fix a safe point for exiting the market.
Price chart patterns
There are a range of charts available, which can help you study the Forex market patters and price actions. Although many types of chart forms are used to represent the market movements, the Bar charts are the most commonly used charts to describe the patters simply and clearly.
In these Bar charts, each bar or slab usually signifies a period of time ranging from a minute to a number of years. The significance of these charts is that they show diverse price patterns that have been established so far.
Some other types of price chart patterns are:
Point and figure patterns
The point that differentiates the Bar chart patterns from the Point and figure patterns is that, the latter does not employ time scales to specify a specific day or month related with a particular price action.
Yet, they are basically the similar to the patterns created through the Bar charts.
Candlestick patterns
Candlestick patterns are also employed to forecast the market, just like the Point and figure patterns and Bar charts patterns. But Candlestick patterns are more visually appealing, detailed and clearer than the other patterns, because of their tinted bodies.
Evaluating Profit and Loss
If you are trading through an efficient online trading platform, it is likely that you will be provided with an automated calculation of your Profit and Loss vis-à-vis your open positions in the Forex market. This facilitates the trader, making it easier for him to keep track of his position and movement in the market automatically.
Nevertheless, it is still helpful for every Forex trader to know and comprehend the calculation through which, these results are derived.
Knowing all about Margins
Advantages are many, when it comes to getting good margins for trading. Margin can be known as the minimum amount required to be deposited before an investor starts trading. This can also be known as the initial amount with which the Forex trading account can be opened.
With bigger margins, you can get more buying power in your hands. For example, if you have $5,000 worth money in your margin account which also provides 100:1 leverage, then you can easily buy about $500,000 of exchange.
This is for the reason that you only have to position 1% of the buying price as security in your account. Thus, in other words, you have a $500,000 worth of buying power in your hands.
This is exactly why trading exchange with a margin account facilitates you to raise your buying power. Margin accounts can also allow you to enhance your overall return on investment with less capital pay out.
But what needs to be kept in mind always is that, while trading on margins can increase your profits, there is an equal and opposite possibility that it can amplify your losses as well.
Making use of a Margin account for Forex trading can definitely turn out to be a profitable investment strategy, but only if you manage your account wisely. Along with the profits, what also should be considered seriously are the risks which are involved by getting more buying power with lesser cash outlay, as this may also lead you to lose more than you have at times too.
Also, always make sure that you thoroughly read the margin agreement which occurs between your payment firm and you. Talk to your account representative if you have any questions.
In the cases where the margin available in your account drops below a preset boundary, there are 99% chances of your account positions being partly or completely shut down.
Also, there is a possibility that you might not even get a margin call before closing down your positions.
To avoid such a risky situation, it is always advisable that you supervise your margin account stability regularly to keep a check that your money does not stoop as low as the margin set.
Also, make appropriate use of correct stop-loss orders along with every open position. Setting a stop-loss order will help you limit your risks and fix a safe point for exiting the market.
Price chart patterns
There are a range of charts available, which can help you study the Forex market patters and price actions. Although many types of chart forms are used to represent the market movements, the Bar charts are the most commonly used charts to describe the patters simply and clearly.
In these Bar charts, each bar or slab usually signifies a period of time ranging from a minute to a number of years. The significance of these charts is that they show diverse price patterns that have been established so far.
Some other types of price chart patterns are:
Point and figure patterns
The point that differentiates the Bar chart patterns from the Point and figure patterns is that, the latter does not employ time scales to specify a specific day or month related with a particular price action.
Yet, they are basically the similar to the patterns created through the Bar charts.
Candlestick patterns
Candlestick patterns are also employed to forecast the market, just like the Point and figure patterns and Bar charts patterns. But Candlestick patterns are more visually appealing, detailed and clearer than the other patterns, because of their tinted bodies.
Are you an “obsessed to win” trader?
Traders of all kinds have always been attracted towards Forex trading with the basic motive to make profits, and to win as much as they can. The thrill to enter the market, the adventure to bid the money, and the attempt to predict the unpredictable drives investors to this largest Foreign Exchange market in the world.
But what we as traders do not realize is that unknowingly, our emotions can make us trade incorrectly.
There is no doubt that entering Forex market can open a lot many avenues for you as a trader to explore large money making prospects easily accessible with the Forex trading these days. People from various genres, class and gender enter the Forex world on a daily basis, just for the hope of winning it all and experiencing the great style and life of a money-making Forex trader.
But, while get easily floored by the profits and winnings of a successful Forex trader, what is easily forgotten is the fact that while there are quiet a few traders who are winning at the Forex market one day, they can always be the ones who can lose all their winnings the very next day!
What needs to be understood is that Forex trading market is just like a war front, where you have every possibility to lose the battle as much as you have to win it. It is a war where you can easily lose all your capital and confidence if you do not act sensibly in your wars in opposition to the Forex market
Forex market can often act as a clever, frightening and a somewhat wicked enemy at times too. This is exactly why every move in the Forex trading market should be a planned and organized move. You, as a trader should never be unprepared when inside the trading system once. With such a volatile market as the Forex, anything can happen anytime. In the world of Forex market, the first thing that can go against you while trading is your over confidence to win.
An obsession to win for a trader, can become a benefit for the market, making it easier for your enemy to defeat you, as you become overpowered by your emotions.
A lot many traders and investors believe in the strategy of never to close a trade until or unless it is turning into a profitable one. An approach which can surely lead them to a series of losses. Also, many investors think that the assumptions and predictions they have made on a particular trade, based on some trading indicator and industrial analysis will always churn out accurate and right results for them.
Believing that the Forex market will begin performing in the exact same way in which they had predicted, even if the trading graphs and charts clearly indicate the opposite, is foolishness. An attempt which can make traders lose all their money on false anticipations. No wise Forex trader will trade with such illusions in his mind. In reality, the market can any moment, move against or with you. Such a behavior while trading will only lead you to continuously pouring in your money into losses, which will obviously be market’s gains.
You will be easily defeated by your own obsession of wining which will at the end of the day, turn into a loss for you instead of being profitable.
So, always keep in mind never to be obsessed with emotions and trade Forex.
But what we as traders do not realize is that unknowingly, our emotions can make us trade incorrectly.
There is no doubt that entering Forex market can open a lot many avenues for you as a trader to explore large money making prospects easily accessible with the Forex trading these days. People from various genres, class and gender enter the Forex world on a daily basis, just for the hope of winning it all and experiencing the great style and life of a money-making Forex trader.
But, while get easily floored by the profits and winnings of a successful Forex trader, what is easily forgotten is the fact that while there are quiet a few traders who are winning at the Forex market one day, they can always be the ones who can lose all their winnings the very next day!
What needs to be understood is that Forex trading market is just like a war front, where you have every possibility to lose the battle as much as you have to win it. It is a war where you can easily lose all your capital and confidence if you do not act sensibly in your wars in opposition to the Forex market
Forex market can often act as a clever, frightening and a somewhat wicked enemy at times too. This is exactly why every move in the Forex trading market should be a planned and organized move. You, as a trader should never be unprepared when inside the trading system once. With such a volatile market as the Forex, anything can happen anytime. In the world of Forex market, the first thing that can go against you while trading is your over confidence to win.
An obsession to win for a trader, can become a benefit for the market, making it easier for your enemy to defeat you, as you become overpowered by your emotions.
A lot many traders and investors believe in the strategy of never to close a trade until or unless it is turning into a profitable one. An approach which can surely lead them to a series of losses. Also, many investors think that the assumptions and predictions they have made on a particular trade, based on some trading indicator and industrial analysis will always churn out accurate and right results for them.
Believing that the Forex market will begin performing in the exact same way in which they had predicted, even if the trading graphs and charts clearly indicate the opposite, is foolishness. An attempt which can make traders lose all their money on false anticipations. No wise Forex trader will trade with such illusions in his mind. In reality, the market can any moment, move against or with you. Such a behavior while trading will only lead you to continuously pouring in your money into losses, which will obviously be market’s gains.
You will be easily defeated by your own obsession of wining which will at the end of the day, turn into a loss for you instead of being profitable.
So, always keep in mind never to be obsessed with emotions and trade Forex.
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