By Mike Conlon, ForexNews.com on Jul 22, 2011 01:21:21 GMT
Yesterday’s market reaction to the news out of the EU could not have been a more perfect scenario for those searching for a ray of hope that the global economy might actually be able to move forward. News out of Brussels was that indeed a solution to the Euro debt crisis had been agreed upon, going a lot further than most had thought possible.
While the markets are still trying to judge the merits of the resolution, the EU took some bold steps to try to stem the crisis. Some of the highlights: Greece gets a larger bailout—but needs to enact major austerity to receive it; Greece gets AAA-rated terms for borrowing from the ECB and EFSF, as does Portugal and Ireland if needed; the ECB will buy bonds and essentially be a “bidder of last resort”, all but daring speculators to try to drive yields higher on Spain, Italy, or others (think ‘don’t fight the Fed’). These are extraordinary measures that will give the debt-burdened countries a chance at redemption. However, the question remains as to whether or not the austerity required is too draconian, and the likelihood that it can be accomplished. One other thing to note however is that the EFSF was not expanded so the size of the emergency facility remains at 440 billion euros, which hopefully is enough to manage future liquidity issues.
While this serves the markets purposes for now, it appears likely that the EU economy is going to shrink in size as austerity is enacted throughout the region. One early sign is that German IFO confidence figures have come in lower than expected, though Euro zone industrial orders picked up for the month.
The rally that took place yesterday has followed through to this morning, with stocks in Asia and Europe up overnight, as are commodities. Next up is the US debt ceiling debate, and the politics surrounding it has gotten so nasty that it’s almost become comical. A deal will definitely get done and the only question is at whose expense.
In the forex market:
Aussie (AUD): The Aussie is mostly higher, easily clearing the resistance identified yesterday at 1.08 vs. USD. Export and import prices have risen, which could give rise to inflation down under.
Kiwi (NZD): The Kiwi is has rocketed higher to 86.75, just south of my target of .87 from earlier this weak. Inflation expectations are rising, which means that so are interest rate hike expectations as well.
Loonie (CAD): The only other fundamental data out his morning has come from Canada, which reported lower than expected CPI data that has sent the Loonie lower, despite oil trading up to $100. Core CPI came in at 1.3% vs. an expectation of 1.9%, and the headline figure came in at 3.1% vs. an expected 3.6%. This may buy the BOC time to allow the economy to continue with lower rates as prices seemingly are under control. Better than expected retail sales figures showed a gain of .5% vs. an expected .3%, which shows economic improvement. (Click chart to enlarge)
Euro (EUR): The Euro has pulled back some to under 1.44 vs. USD as markets are set to open slightly lower here in the US. While the market seemed pleased with the initial resolution form yesterday, as more is learned about the deal, the less enamored the markets may become. (Click chart to enlarge)
Pound (GBP): The Pound is also pulling back after yesterday’s rally and with no news on the docket may be a victim of having traveled too far, too fast.
Swissie (CHF): The SNB has been thankful of late that risk is abating in the global economy as the franc becomes less desirable when safe-havens are out of favor.
Dollar (USD): I’ve read some analyses that claim that yesterday’s massive moves were more a function of Dollar weakness than Euro strength. The markets are looking for any indication that the global economy is stabilizing, as the appetite for risk is increasing as cheap money floods the globe. We need a compromise on the debt ceiling debate to really instill confidence.
Yen (JPY): The Yen is picking up some strength as risk appetites are turning to risk aversion as the morning moves forward. Nevertheless it was lower yesterday as carry trades were re-established.
As I said yesterday, “buy the rumor, sell the news”. While the Euro debt crisis resolution may be better news than expected, the devil is always in the details. As the markets start the comprehend all that needs to be done, opinions over the deal may change.
While we are seeing a pull-back in the early action here in the US, this could be more of a function of jittery markets still being fearful heading into the weekend. The debt ceiling debate rages on here in the US and should it seem less likely that a deal can be reached, then the markets may react quickly.
So now it is up to the US, and hopefully we can cast the politics aside for the better of all and not just a specific political base.
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!
Showing posts with label Forex News. Show all posts
Showing posts with label Forex News. Show all posts
Saturday, July 23, 2011
Solutions In Sight?
By Mike Conlon, ForexNews.com on Jul 19, 2011 01:27:19 GMT
This morning markets are rallying as the Euro zone moves one step closer toward a solution to the debt crisis that has been plaguing them and the global markets in general. The Greek Finance Minister came out and said that an agreement on debt is “attainable” and the ECB seems ready to deal as well.
News in the US today has the Republicans largely going through the political motions of introducing a bill on the debt ceiling debate that will be vetoed by the President if it passes the House, but rumors of a “secret meeting” taking place have raised hopes that a compromise can be reached.
The global markets are in need of some sort of stability as these crises have left Central banks around the globe in limbo as they need to allow these situations to play out before they can potentially raise interest rates to cool off their own expanding economies. At least that’s the thought in Australia and Canada as the release of the minutes from the RBA rate policy meeting and the BOC interest rate decision confirm.
Rounding out the morning are US Housing Starts and Building Permits figures which are likely to beat expectations as the bar has been lowered so much after last month’s dismal reports. So the markets are in risk-taking mode this morning, with global stocks higher, as well as oil and gold.
In the forex market:
Aussie (AUD): The Aussie is mostly higher on risk appetite as the minutes from the RBA rate policy meeting confirmed that the RBA was in “wait and see” mode with regard to the Euro debt and US debt ceiling crises. Inflation is a mild concern but does not outweigh the overall risk to global economic stability.
Kiwi (NZD): The Kiwi is also higher this morning on risk appetite and the carry-over effects of the CPI data that was reported earlier this week. The RBNZ may want to “normalize” rate policy to slow down inflation.
Loonie (CAD): The Loonie is also higher this morning as oil is trading higher despite the fact that the market expects the BOC to leave interest rates unchanged this morning at 1%. The reasoning behind this is similar to that of the RBA, but the market is expecting at least 2 quarter point rate hikes before the end of the year, the first of which could come at the September meeting. (Click chart to enlarge)
Euro (EUR): The Euro is also trading up despite the weaker than expected ZEW economic survey figures that were reported earlier this morning. The big news is that Euro zone ministers are moving closer to finding a solution to the debt crisis, as the ECB has indicated it may be more “flexible”. Yields on a Spanish bond offering soared from just 1 month ago. (Click chart to enlarge)
Pound (GBP): With no news on the docket, the Pound is drifting higher ahead of tomorrow’s release of the BOE rate policy meeting minutes.
Swissie (CHF): The Swissie is lower across the board as demand for safe-havens has decreased due to increased risk appetite. Gold is also trading slightly lower, though still above $1600.
Dollar (USD): The Dollar Index is falling this morning after much better than expected Housing Starts and Building Permits figures showed that the housing market may not be dead just yet. Improving economic data may mitigate fears of QE3, but we’re not out of the woods yet.
Yen (JPY): The Yen is mostly lower on risk themes and department store sales came in better than expected, showing signs that domestic demand may be improving as a result of the devastating natural disasters.
It’s not over until it’s over, as the saying goes, and these words couldn’t ring more true with regard to the Euro debt crisis and the US debt ceiling debate. While markets may believe that solutions are near, risk still abounds.
Meanwhile, just to update, the BOC did indeed leave rates unchanged, but the hawkish tone could mean a rate hike at September’s meeting.
Until that time, watch the economic data to see signs of economic improvement globally and whether or not Central bankers will be able to address their own domestic economies.
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing mar
This morning markets are rallying as the Euro zone moves one step closer toward a solution to the debt crisis that has been plaguing them and the global markets in general. The Greek Finance Minister came out and said that an agreement on debt is “attainable” and the ECB seems ready to deal as well.
News in the US today has the Republicans largely going through the political motions of introducing a bill on the debt ceiling debate that will be vetoed by the President if it passes the House, but rumors of a “secret meeting” taking place have raised hopes that a compromise can be reached.
The global markets are in need of some sort of stability as these crises have left Central banks around the globe in limbo as they need to allow these situations to play out before they can potentially raise interest rates to cool off their own expanding economies. At least that’s the thought in Australia and Canada as the release of the minutes from the RBA rate policy meeting and the BOC interest rate decision confirm.
Rounding out the morning are US Housing Starts and Building Permits figures which are likely to beat expectations as the bar has been lowered so much after last month’s dismal reports. So the markets are in risk-taking mode this morning, with global stocks higher, as well as oil and gold.
In the forex market:
Aussie (AUD): The Aussie is mostly higher on risk appetite as the minutes from the RBA rate policy meeting confirmed that the RBA was in “wait and see” mode with regard to the Euro debt and US debt ceiling crises. Inflation is a mild concern but does not outweigh the overall risk to global economic stability.
Kiwi (NZD): The Kiwi is also higher this morning on risk appetite and the carry-over effects of the CPI data that was reported earlier this week. The RBNZ may want to “normalize” rate policy to slow down inflation.
Loonie (CAD): The Loonie is also higher this morning as oil is trading higher despite the fact that the market expects the BOC to leave interest rates unchanged this morning at 1%. The reasoning behind this is similar to that of the RBA, but the market is expecting at least 2 quarter point rate hikes before the end of the year, the first of which could come at the September meeting. (Click chart to enlarge)
Euro (EUR): The Euro is also trading up despite the weaker than expected ZEW economic survey figures that were reported earlier this morning. The big news is that Euro zone ministers are moving closer to finding a solution to the debt crisis, as the ECB has indicated it may be more “flexible”. Yields on a Spanish bond offering soared from just 1 month ago. (Click chart to enlarge)
Pound (GBP): With no news on the docket, the Pound is drifting higher ahead of tomorrow’s release of the BOE rate policy meeting minutes.
Swissie (CHF): The Swissie is lower across the board as demand for safe-havens has decreased due to increased risk appetite. Gold is also trading slightly lower, though still above $1600.
Dollar (USD): The Dollar Index is falling this morning after much better than expected Housing Starts and Building Permits figures showed that the housing market may not be dead just yet. Improving economic data may mitigate fears of QE3, but we’re not out of the woods yet.
Yen (JPY): The Yen is mostly lower on risk themes and department store sales came in better than expected, showing signs that domestic demand may be improving as a result of the devastating natural disasters.
It’s not over until it’s over, as the saying goes, and these words couldn’t ring more true with regard to the Euro debt crisis and the US debt ceiling debate. While markets may believe that solutions are near, risk still abounds.
Meanwhile, just to update, the BOC did indeed leave rates unchanged, but the hawkish tone could mean a rate hike at September’s meeting.
Until that time, watch the economic data to see signs of economic improvement globally and whether or not Central bankers will be able to address their own domestic economies.
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing mar
Euro Bank Stress Tests In Focus!
By Mike Conlon, ForexNews.com on Jul 15, 2011 01:18:34 GMT
Stressful Situations!
Specifically, I am referring to two events taking place around the globe that have effectively put the markets on edge. The first today is the release of the results of the European bank stress tests, and then the on-going saga of the debt ceiling debate here in the US.
The bank stress tests are intended to allay the fears of the marketplace that the European banks are adequately capitalized and that they could withstand a major shock to the system such as sovereign default. This will likely throw a few banks under the bus which is obviously bad for some individual players, but this has to be done in order to ensure “credibility” that the tests were sufficient.
The debt ceiling debate is likely to be more drawn out as the politics behind the scenes have gotten so ugly that neither side is willing to budge. So we are headed on a collision course toward disaster unless one side is willing to compromise. S&P has put the US on negative credit watch and said that a debt downgrade may be forthcoming if a deal is not reached.
This has induced some mild risk aversion in the markets today, with stocks flat to slightly lower and commodities pulling back.
In the forex market:
Aussie (AUD): The Aussie is mostly lower on risk aversion and that money flows are leaving the Aussie in favor of the Kiwi on rate hike expectations.
Kiwi (NZD): The Kiwi is higher despite the risk in the marketplace after the much better than expected GDP report showed that the economy was growing at 1.4% vs. an expectation of .5% after having to deal with the two earthquakes. The market believes that this positive growth story means that the RBNZ could be next to raise rates. (Click chart to enlarge)
Loonie (CAD): The Loonie is somewhat higher against the Dollar despite lower oil prices and mild risk aversion in the markets. Canada’s close ties to the US economy make the Loonie slightly more desirable when the risk comes from Europe rather than the US.
Euro (EUR): The Euro is slightly lower ahead of the bank stress tests results that are due out at 12PM EST. Trade balance figures came in better than expected, though the market is more concerned with the news at noon.
Pound (GBP): The Pound is mixed as austerity measures are bringing down inflation, albeit slowly. This will likely mean that the BOE will be on hold for some time.
Swissie (CHF): The Swissie has been on a tear of late as its safe-haven status has been exploited by those who do not want to own the US dollar. (Click chart to enlarge)
Dollar (USD): The Dollar has been moving higher after Bernanke backed away from his comments the other day that has led the market to believe that QE3 is very much on the table. CPI data came in largely as expected this morning, showing a headline figure of 3.6%. However, the Empire manufacturing index came in at –3.76 vs. an expectation of 5. Michigan consumer confidence figures are due out later this morning.
Yen (JPY): Much like the Swissie, the Yen has been appreciating of late as it’s a Dollar alternative for a safe haven play. Too much strengthening could cause the BOJ to take action, especially if QE3 looks more like a reality.
With the stress in the marketplace adding to the already declining economic data, it is only a matter of time before something gives. The Euro bank stress tests are intended to instill confidence in an already skeptical market and if the tests are deemed to not be rigid enough, then this may become a non-issue. Nevertheless, expect volatility surrounding the release.
Here in the US, we have a different kind of stress over the debt ceiling debate. President Obama will be speaking on it later this morning but expect the same political rhetoric to take place. Meanwhile, markets that are already jittery over a worsening economy have extra reasons to be cautious. Potential US credit downgrades are adding fuel to fire, as they typically occur after the fact.
Prospects don’t look great for the global economy despite better than expected corporate stock earnings. There is a major disconnect between the markets and the real economy, so don’t be surprised if at some point they begin to resemble each other more realistically.
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing marke
Stressful Situations!
Specifically, I am referring to two events taking place around the globe that have effectively put the markets on edge. The first today is the release of the results of the European bank stress tests, and then the on-going saga of the debt ceiling debate here in the US.
The bank stress tests are intended to allay the fears of the marketplace that the European banks are adequately capitalized and that they could withstand a major shock to the system such as sovereign default. This will likely throw a few banks under the bus which is obviously bad for some individual players, but this has to be done in order to ensure “credibility” that the tests were sufficient.
The debt ceiling debate is likely to be more drawn out as the politics behind the scenes have gotten so ugly that neither side is willing to budge. So we are headed on a collision course toward disaster unless one side is willing to compromise. S&P has put the US on negative credit watch and said that a debt downgrade may be forthcoming if a deal is not reached.
This has induced some mild risk aversion in the markets today, with stocks flat to slightly lower and commodities pulling back.
In the forex market:
Aussie (AUD): The Aussie is mostly lower on risk aversion and that money flows are leaving the Aussie in favor of the Kiwi on rate hike expectations.
Kiwi (NZD): The Kiwi is higher despite the risk in the marketplace after the much better than expected GDP report showed that the economy was growing at 1.4% vs. an expectation of .5% after having to deal with the two earthquakes. The market believes that this positive growth story means that the RBNZ could be next to raise rates. (Click chart to enlarge)
Loonie (CAD): The Loonie is somewhat higher against the Dollar despite lower oil prices and mild risk aversion in the markets. Canada’s close ties to the US economy make the Loonie slightly more desirable when the risk comes from Europe rather than the US.
Euro (EUR): The Euro is slightly lower ahead of the bank stress tests results that are due out at 12PM EST. Trade balance figures came in better than expected, though the market is more concerned with the news at noon.
Pound (GBP): The Pound is mixed as austerity measures are bringing down inflation, albeit slowly. This will likely mean that the BOE will be on hold for some time.
Swissie (CHF): The Swissie has been on a tear of late as its safe-haven status has been exploited by those who do not want to own the US dollar. (Click chart to enlarge)
Dollar (USD): The Dollar has been moving higher after Bernanke backed away from his comments the other day that has led the market to believe that QE3 is very much on the table. CPI data came in largely as expected this morning, showing a headline figure of 3.6%. However, the Empire manufacturing index came in at –3.76 vs. an expectation of 5. Michigan consumer confidence figures are due out later this morning.
Yen (JPY): Much like the Swissie, the Yen has been appreciating of late as it’s a Dollar alternative for a safe haven play. Too much strengthening could cause the BOJ to take action, especially if QE3 looks more like a reality.
With the stress in the marketplace adding to the already declining economic data, it is only a matter of time before something gives. The Euro bank stress tests are intended to instill confidence in an already skeptical market and if the tests are deemed to not be rigid enough, then this may become a non-issue. Nevertheless, expect volatility surrounding the release.
Here in the US, we have a different kind of stress over the debt ceiling debate. President Obama will be speaking on it later this morning but expect the same political rhetoric to take place. Meanwhile, markets that are already jittery over a worsening economy have extra reasons to be cautious. Potential US credit downgrades are adding fuel to fire, as they typically occur after the fact.
Prospects don’t look great for the global economy despite better than expected corporate stock earnings. There is a major disconnect between the markets and the real economy, so don’t be surprised if at some point they begin to resemble each other more realistically.
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing marke
Markets Call For Debt Deals Now!
By Mike Conlon, ForexNews.com on Jul 20, 2011 12:45:00 GMT
There is major optimism that tomorrow’s meeting of EU Finance Ministers in Brussels is going to produce a sensible solution to the debt crisis in Europe which means that the politics of doing the unpopular have been cast aside. This could come in the form of the bond buying from the emergency lending facility, which would essentially be quantitative easing to help keep individual countries’ yields low and then allow them to buy back later.
This situation practically mirrors what is going on here in the US with the debt ceiling debate, as the markets will take any solution at this point. While I personally don’t believe it’s a good idea to raise taxes in this economic climate, fixing loopholes is not the same thing. If unemployment gets worse as a result, then let the leaders bear the blame.
But we have been down this road before, where the markets anticipate a deal because they are weary and because it makes perfect sense; and then the politicians defy logic. By the end of this week we should have more clarity, and the risk appetite in the market is reflecting that sentiment.
In the UK, the release of the BOE rate policy meeting minutes confirmed there was no change of stance, though some have noted that there may be lesser resolve for additional bond purchases.
In the US, existing home sales are due out later this morning and yesterdays housing starts numbers surprised to the upside, showing that the housing market may not be dead just yet.
So this all adds up to risk taking this morning, with stocks and oil higher, and gold giving back prices gains as it sheds some of its safe haven status.
In the forex market:
Aussie (AUD): The Aussie is mostly higher on risk themes despite an index of leading indicators number that came in slightly negative, showing a decline of .1%. More pressing was the release of the RBA minutes, which showed that Central bank might not move on rates for some time.
Kiwi (NZD): The Kiwi is also mostly higher ahead of tomorrow’s release of consumer confidence figures. One item that has escaped attention is that the Chinese Yuan has appreciated the most in nearly 17 years (though still less than the weekly swings in Euro), which could be good for NZ exports.
Loonie (CAD): The Loonie continues to approach 2011 highs vs. USD after yesterday’s hawkish statement from the BOC at the rate decision. Today’s release of the monetary policy report may confirm that if not for global instability, rates might be higher. Oil back to $99 is also pushing Loonie.
Euro (EUR): It’s make-or-break time for the Euro this week as the entire globe is looking for a resolution to the debt crisis. The major impediment so far has been German political opposition, but as world opinion moves against them, they may be forced to bite the bullet. While no one expects the solution to emerge tomorrow from the meeting in Brussels, the market is optimistic that significant steps will be taken. (Click chart to enlarge)
Pound (GBP): The Pound is bouncing off of earlier lows as the indeed the BOE confirmed that they are willing to turn a blind eye to inflation (some say up to CPI gains of 5%!) in order to ride out the government austerity. Tomorrow’s retail sales figures will show whether or not the consumer in the UK is active, or if they are heading straight for stagflation. (Click chart to enlarge)
Swissie (CHF): The Swissie has been the most-favored safe haven currency of late so naturally it is giving back some of those gains as risk appetite has increased due to increased market optimism. Tomorrow’s trade balance figures will show whether or not a stronger currency has damaged the trade balance significantly.
Dollar (USD): The market is hoping that yesterday’s news on housing starts carries over to existing home sales figures due out later this morning. However, if the data begins to improve too much, then the market may assume that QE3 is off of the table which may cause some Dollar strength. What is more likely though is that good news will be received well by the stock market, which has been reporting great corporate earnings.
Yen (JPY): The Yen is mostly lower as safe haven demand has lessened. If the global economy can get past these two major debt hurdles, then it could be game on again for significant carry trades.
Markets are a forward-looking and discounting mechanism so gains we are seeing now are in anticipation of these debt problems getting fixed. This in and of itself does not mean that deals have been reached, however.
The politics surrounding all of these deals has been the major impediment so far, so the markets are saying just get it done. Uncertainty at this point is worse than bad policy and while the devil is in the details, the markets will decide later whether or not they approve. Let’s face it, I have very little confidence that any of these deals will be perfect, so just let the chips fall where they may.
If the markets do not see significant progress or agreements in principle to resolve these issues, then we could see this week’s gains vanish. For that is the problem with rising expectations; the letdowns hurt that much more!
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!
There is major optimism that tomorrow’s meeting of EU Finance Ministers in Brussels is going to produce a sensible solution to the debt crisis in Europe which means that the politics of doing the unpopular have been cast aside. This could come in the form of the bond buying from the emergency lending facility, which would essentially be quantitative easing to help keep individual countries’ yields low and then allow them to buy back later.
This situation practically mirrors what is going on here in the US with the debt ceiling debate, as the markets will take any solution at this point. While I personally don’t believe it’s a good idea to raise taxes in this economic climate, fixing loopholes is not the same thing. If unemployment gets worse as a result, then let the leaders bear the blame.
But we have been down this road before, where the markets anticipate a deal because they are weary and because it makes perfect sense; and then the politicians defy logic. By the end of this week we should have more clarity, and the risk appetite in the market is reflecting that sentiment.
In the UK, the release of the BOE rate policy meeting minutes confirmed there was no change of stance, though some have noted that there may be lesser resolve for additional bond purchases.
In the US, existing home sales are due out later this morning and yesterdays housing starts numbers surprised to the upside, showing that the housing market may not be dead just yet.
So this all adds up to risk taking this morning, with stocks and oil higher, and gold giving back prices gains as it sheds some of its safe haven status.
In the forex market:
Aussie (AUD): The Aussie is mostly higher on risk themes despite an index of leading indicators number that came in slightly negative, showing a decline of .1%. More pressing was the release of the RBA minutes, which showed that Central bank might not move on rates for some time.
Kiwi (NZD): The Kiwi is also mostly higher ahead of tomorrow’s release of consumer confidence figures. One item that has escaped attention is that the Chinese Yuan has appreciated the most in nearly 17 years (though still less than the weekly swings in Euro), which could be good for NZ exports.
Loonie (CAD): The Loonie continues to approach 2011 highs vs. USD after yesterday’s hawkish statement from the BOC at the rate decision. Today’s release of the monetary policy report may confirm that if not for global instability, rates might be higher. Oil back to $99 is also pushing Loonie.
Euro (EUR): It’s make-or-break time for the Euro this week as the entire globe is looking for a resolution to the debt crisis. The major impediment so far has been German political opposition, but as world opinion moves against them, they may be forced to bite the bullet. While no one expects the solution to emerge tomorrow from the meeting in Brussels, the market is optimistic that significant steps will be taken. (Click chart to enlarge)
Pound (GBP): The Pound is bouncing off of earlier lows as the indeed the BOE confirmed that they are willing to turn a blind eye to inflation (some say up to CPI gains of 5%!) in order to ride out the government austerity. Tomorrow’s retail sales figures will show whether or not the consumer in the UK is active, or if they are heading straight for stagflation. (Click chart to enlarge)
Swissie (CHF): The Swissie has been the most-favored safe haven currency of late so naturally it is giving back some of those gains as risk appetite has increased due to increased market optimism. Tomorrow’s trade balance figures will show whether or not a stronger currency has damaged the trade balance significantly.
Dollar (USD): The market is hoping that yesterday’s news on housing starts carries over to existing home sales figures due out later this morning. However, if the data begins to improve too much, then the market may assume that QE3 is off of the table which may cause some Dollar strength. What is more likely though is that good news will be received well by the stock market, which has been reporting great corporate earnings.
Yen (JPY): The Yen is mostly lower as safe haven demand has lessened. If the global economy can get past these two major debt hurdles, then it could be game on again for significant carry trades.
Markets are a forward-looking and discounting mechanism so gains we are seeing now are in anticipation of these debt problems getting fixed. This in and of itself does not mean that deals have been reached, however.
The politics surrounding all of these deals has been the major impediment so far, so the markets are saying just get it done. Uncertainty at this point is worse than bad policy and while the devil is in the details, the markets will decide later whether or not they approve. Let’s face it, I have very little confidence that any of these deals will be perfect, so just let the chips fall where they may.
If the markets do not see significant progress or agreements in principle to resolve these issues, then we could see this week’s gains vanish. For that is the problem with rising expectations; the letdowns hurt that much more!
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!
Saturday, January 15, 2011
EXPLORE FOREX MARKET. ENJOY FOREX TRADING
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Aiming to make the trading process accessible for everyone, our forex broker offers daily market information as well. Forex news and analytics by LiteForex are used by traders as an additional help for forex trading decisions.
LiteForex broker constantly grows taking more solid positions in brokerage processing services. And cooperation with both traders and forex partners is the most important component of our success. We offer stability and confidence in the future, a precious gift for those who operate on the quite risky forex market. Our customers value the highest liquidity of the forex trading, immediate transaction execution and the atmosphere of mutual confidence – all this was successfully formed within several years. Finally, being open to your suggestions, we always try hard to make your forex trading process even better.
Forex for beginners (including education) is an essential corporative LiteForex branch aimed to popularize currency dealing service. For newbie traders only starting to learn the secrets of forex trading, LiteForex offers mini and micro accounts. These accounts have extremely low deposit level for gaining real trading experience with the minimal risk. Moreover, we first created Lite and 100K Lite accounts with a deposit of only $1!
We’ve passed a long way since then gaining respect and authority among forex traders across the market. Many of them, who started working with cent accounts, manage sizable capital assets nowadays and use powerful forex trading strategies. They demonstrate not only professional competence but also confidence in our forex broker company.
Today LiteForex offers its customers the widest spectrum of services, from micro forex to investment and management of huge funds along with qualitative 24/5 maintenance and support.
We provide our clients with the next-generation forex trading platform designed for operating in forex / CFD markets. MetaTrader 5 (MT5) is a serious advantage for traders interested in currency and stock tools. Trading possibilities of new MQL5-based forex platform have been significantly extended comparing with MT4.
Another option by our forex broker is a Multirebate Service. When making a transaction in the forex market, traders pay the difference between bid and ask prices (spread). LiteForex gives back 1,5 forex pips of spread from each transaction to traders participating in the Multirebate Service. In other words, your deposit can be funded with real money that you can use in further forex trading or withdraw from your account.
Aiming to make the trading process accessible for everyone, our forex broker offers daily market information as well. Forex news and analytics by LiteForex are used by traders as an additional help for forex trading decisions.
LiteForex broker constantly grows taking more solid positions in brokerage processing services. And cooperation with both traders and forex partners is the most important component of our success. We offer stability and confidence in the future, a precious gift for those who operate on the quite risky forex market. Our customers value the highest liquidity of the forex trading, immediate transaction execution and the atmosphere of mutual confidence – all this was successfully formed within several years. Finally, being open to your suggestions, we always try hard to make your forex trading process even better.
Friday, January 14, 2011
Forex Market Today
What is forex?
Briefly, forex is the exchange market. If try to give more specific definition, it will sound like, it is the international currency market forex (forex – Foreign Exchange Market) – a set of operations on purchase and sale of a foreign currency and loans extension on specific conditions (sum, exchange rate, interest rate) which should be completed at specified date. Another indication of the exchange market is FX.
Currency trading has become the most common type of activity: up to four trillion dollars a day reaches a turnover on the global currency market forex, not less than 80% of all deals compose operations, which main target is to profit from the game on the difference in exchange rates. This game on the forex market attracts many participants: both financial organisations and individual investors, because according to experts, competent trader can get more than 1.000.000 dollars a year in salary and commission.
What drives the forex market.
The main moving factor on the forex market is the movement of capital between states. The state is always behind the back of the national currency. Other factors which influence on the exchange rate on the forex market is the balance of mutual payments, condition of national economics, predictions which are made on the basis of charts and technical analysis, as well as political and psychological factors. Price movements on the currency market do not stop even for a minute. Thus, on forex market in order to make a profit, you may make use of dozens of situations each day.
Influence of private traders on price range quotations of currency pairs are changed depending on a total sales result and purchase amount of different currencies. If to consider a simple example, then it will look like this: You go to a bank, sale the US dollars and buy euros on these money. Before you have completed the exchange, bank had 50% of dollars and euro in reserve. After you completed the operation of buying and selling the currency, the proportions of bank’s reserves changed and so the bank appeared to have more US dollars, because you had sold dollars to the bank and consequently fewer euros since you bought euros at the bank. As the result the bank bears risks which are concerned with a decrease in the dollar’s rate, in the amount exceeding the established proportion. That’s why the bank refers to a contractor and by means of an electronic auction sells surplus of dollars and buy euros, thus restoring the necessary balance.
This is exactly the way how to build relations on the forex market, some sell, others are buying and if the proposals for the purchase of a currency becomes more, in accordance with the principle of the market economy, the rate of the currency rises. In such a manner trends appear. Along with the organisations for which the participation on the foreign exchange market is a necessity, as in the case with the above mentioned example, there exist investment hedge funds and private traders, who trade on forex and earn hard cash and for them the exchange is just a way to get a money. The prime part of huge capitals in the world have been received exactly by the mean of stock exchange.
Today most of the investors who want to trade on the currency market understand that Forex investment trading is a tough job. For this reason online Forex investment is often done via trading account management. Want more info about Forex investment online and account management – please visit this site.
Briefly, forex is the exchange market. If try to give more specific definition, it will sound like, it is the international currency market forex (forex – Foreign Exchange Market) – a set of operations on purchase and sale of a foreign currency and loans extension on specific conditions (sum, exchange rate, interest rate) which should be completed at specified date. Another indication of the exchange market is FX.
Currency trading has become the most common type of activity: up to four trillion dollars a day reaches a turnover on the global currency market forex, not less than 80% of all deals compose operations, which main target is to profit from the game on the difference in exchange rates. This game on the forex market attracts many participants: both financial organisations and individual investors, because according to experts, competent trader can get more than 1.000.000 dollars a year in salary and commission.
What drives the forex market.
The main moving factor on the forex market is the movement of capital between states. The state is always behind the back of the national currency. Other factors which influence on the exchange rate on the forex market is the balance of mutual payments, condition of national economics, predictions which are made on the basis of charts and technical analysis, as well as political and psychological factors. Price movements on the currency market do not stop even for a minute. Thus, on forex market in order to make a profit, you may make use of dozens of situations each day.
Influence of private traders on price range quotations of currency pairs are changed depending on a total sales result and purchase amount of different currencies. If to consider a simple example, then it will look like this: You go to a bank, sale the US dollars and buy euros on these money. Before you have completed the exchange, bank had 50% of dollars and euro in reserve. After you completed the operation of buying and selling the currency, the proportions of bank’s reserves changed and so the bank appeared to have more US dollars, because you had sold dollars to the bank and consequently fewer euros since you bought euros at the bank. As the result the bank bears risks which are concerned with a decrease in the dollar’s rate, in the amount exceeding the established proportion. That’s why the bank refers to a contractor and by means of an electronic auction sells surplus of dollars and buy euros, thus restoring the necessary balance.
This is exactly the way how to build relations on the forex market, some sell, others are buying and if the proposals for the purchase of a currency becomes more, in accordance with the principle of the market economy, the rate of the currency rises. In such a manner trends appear. Along with the organisations for which the participation on the foreign exchange market is a necessity, as in the case with the above mentioned example, there exist investment hedge funds and private traders, who trade on forex and earn hard cash and for them the exchange is just a way to get a money. The prime part of huge capitals in the world have been received exactly by the mean of stock exchange.
Today most of the investors who want to trade on the currency market understand that Forex investment trading is a tough job. For this reason online Forex investment is often done via trading account management. Want more info about Forex investment online and account management – please visit this site.
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