* Dollar rises vs yen, falls versus euro after jobs data
* Improved risk appetite boosts high-yielders
* U.S. January nonfarm payrolls falls 598,000 (Adds comments, details, updates prices)
By Vivianne Rodrigues
NEW YORK, Feb 6 (Reuters) - The U.S. dollar rose versus the yen on Friday as a report showing deterioration in the U.S. labor market boosted investors' expectations for further government intervention to stimulate the economy.
U.S stocks also rose after the Labor Department said employers slashed 598,000 jobs in January, the deepest cut in payrolls in 34 years. For details, see [ID:nN05289845]
The dismal figures may provide an incentive for U.S. legislators to support the Obama administration's fiscal stimulus program and its bank rescue plan, which will be unveiled Monday, traders said.
"Looking beyond today's terrible figures, everybody now expects the President's rescue plan to pass and pass fast," said Gregory Salvaggio, a vice president for trading at Tempus Consulting in Washington. "That is helping lift stocks and is taking some risk off the table, which in turn leads the market to sell yen and buy back some dollars."
In mid morning trading in New York, the dollar was 0.6 percent higher at 91.67 yen . The euro was up 0.5 percent on the day at $1.2848 . Continued...
Monday, February 16, 2009
Learn Forex Trading
What is Forex?
The Foreign Exchange market, also referred to as the "Forex" or "FX" market, is the largest financial market in the world, with a daily average turnover of approximately US$1.5 trillion.
What is Forex Trading?
Forex Trading is Trading of Foreign Currencies like US Dollar , Euro, UK Pound etc.
How much investment required?
It depend upon you.You can start with $1000. You can invest as much as you want.
How are forex currency prices determined?
Forex currency prices are affected by a variety of economic and political conditions, most importantly interest rates, inflation and political stability. Moreover, governments sometimes participate in the forex market to influence the value of their currencies.
Usefull Websites
Click here for usefull websites about Forex trading.
The Foreign Exchange market, also referred to as the "Forex" or "FX" market, is the largest financial market in the world, with a daily average turnover of approximately US$1.5 trillion.
What is Forex Trading?
Forex Trading is Trading of Foreign Currencies like US Dollar , Euro, UK Pound etc.
How much investment required?
It depend upon you.You can start with $1000. You can invest as much as you want.
How are forex currency prices determined?
Forex currency prices are affected by a variety of economic and political conditions, most importantly interest rates, inflation and political stability. Moreover, governments sometimes participate in the forex market to influence the value of their currencies.
Usefull Websites
Click here for usefull websites about Forex trading.
The Expansion of Forex Trading
The Bretton Woods Accord lasted until 1971, after this accord came the Smithsonian Agreement in December of 1971. Similar to the Bretton Woods Accord, it allowed for greater fluctuation within the Forex forum. This was eventually replaced with the free-floating system in place today, this transpired by default as no new agreements were devised. It allowed governments in FX trading to peg their currencies, semi-peg or allow them to freely float. In 1978, the free-floating system was officially mandated. The major currencies of today move independently from other currencies utilizing the services of currency dealers. In a free and open foreign exchange market there are no limitations on investors and currency dealers who wish to trade currencies. This has caused a recent influx of speculation by banks, hedge funds, independent broker dealer, future trading broker, brokerage houses and individuals.The underlying factor that drives today's Forex market is supply and demand along with the huge scope for profit potential amongst currency dealers. This free-floating system is ideal for today's Forex market that experiences a change in currency rate every 4.8 seconds. The foreign exchange market has evolved from a group of loosely connected financial centers to a single integrated market, playing a far greater role in the economy of a country. The expansion in the Forex market globally reflects the ongoing growth of international trade. When considering the vast size of the FX trading market it is important to realize that an initial dealer transaction with an independent broker dealer or a future trading broker and a customer will normally lead to further transactions. This is due to the brokerage institutions readjusting their own positions to manage or offset their risks
Forex Broker
One of the unique features of the Forex market is the huge potential it offers to all its clients, both individual traders and companies are given equal opportunities to expand in to other areas of Forex trading. At NorthFinance all our customers have the option of becoming a business broker, in the forex system this can offer a vast portal to creating and generating more revenue for your company. Becoming a business broker in the Forex system is relatively simple; it is similar to real estate except a Forex business broker specializes in Forex trading rather than in property trading. Many brokers specialize in certain areas whilst others operate as full service broker. A full service broker negotiates the selling and buying foreign currency all over the world; negotiation is a key factor in your job role, along with an extensive back knowledge of the forex system. As knowledge is power, learning as much about Forex and the Forex system is crucial to the full service broker role of assisting and advising their customers. As the Forex market is a relatively new market especially to first time, individual and smaller investors, for years it was only large corporations and skilled professional who took full advantage of buying foreign currency. For this reason many clients approach the forex system as hesitant investors with limited or minimal knowledge of its operations and expanding opportunities. Therefore it is vital for clients to be educated in the system and its operations or employ the assistance of a professional and experienced broker.
Forex Research - 2009 Currency Market Outlook
US Dollar 2009 Forecast
How Did the Dollar Trade in 2008? It has been an exceptionally active year in the foreign exchange market as currency volatilities hit record highs. In the first half of the year, everyone was worried about how much further the dollar would fall but in the second half of the year the concern became how much further the dollar would rise. After hitting a record low against the Euro in the second quarter, in the beginning of the fourth quarter, the US dollar actually surged to a 2 year high. From trough to peak, the dollar index rose more than 23 percent in 2008.
3 Themes for 2009 The US economy and the dollar’s fate in the years ahead could be determined by what happens in 2009. We are focusing on 3 big themes that will impact the US dollar and each of these themes encompasses a lot.
1. Will there be a U or L Shaped Recovery? The US is in recession and the slowdown is expected to deepen in 2009. Before a recovery is even possible, the economy has to work through more weakness and negative surprises. Non-farm payrolls declined by 533k in November, sending the unemployment rate to a 15 year high of 6.7 percent. With many US corporations forced to tighten their belts, the unemployment rate could rise as high as 8 percent in 2009. We expect this to happen because over the past 50 years on average, recessions have boosted the unemployment rate by 2.8 percent. When the current recession started in December, the unemployment rate was 5.0 percent. If you tack on 2.8 percent to that level that would put the unemployment rate at least 7.8 percent.
Non-farm payrolls could double dip, just as it has in past recessions. In this case, we would expect a rebound followed by another sharp loss that rivals November’s job cuts. A rise in unemployment spreads into incomes, spending and then usually leads to more layoffs. We need to see this toxic cycle end before we can see a recovery. Consumer spending has already been very weak and the trade deficit is widening as the dollar strengthens. As the 2 primary inputs into GDP, we expect fourth quarter growth to be very weak. The strength of the US dollar in Q3 and for most of Q4 will also take a big bite out of corporate earnings, leading to disappointments for the stock market. This is why we expect more weakness in the US dollar and the US economy in the first quarter of 2009. However towards the middle of the second quarter, we may begin to see the US economy stabilize as it starts to reap the benefits of Quantitative Easing and President Barack Obama’s fiscal stimulus plan. New Administrations usually hit the ground running and as such we fully expect the rest of the TARP funds to be tapped shortly after his inauguration. The shape of the US recovery will have a big impact on the price action of the US dollar but there is no question that the path to a stronger dollar will be through a weaker one.
The following chart illustrates how non-farm payrolls double-dipped during the 2001 recession.
How Did the Dollar Trade in 2008? It has been an exceptionally active year in the foreign exchange market as currency volatilities hit record highs. In the first half of the year, everyone was worried about how much further the dollar would fall but in the second half of the year the concern became how much further the dollar would rise. After hitting a record low against the Euro in the second quarter, in the beginning of the fourth quarter, the US dollar actually surged to a 2 year high. From trough to peak, the dollar index rose more than 23 percent in 2008.
3 Themes for 2009 The US economy and the dollar’s fate in the years ahead could be determined by what happens in 2009. We are focusing on 3 big themes that will impact the US dollar and each of these themes encompasses a lot.
1. Will there be a U or L Shaped Recovery? The US is in recession and the slowdown is expected to deepen in 2009. Before a recovery is even possible, the economy has to work through more weakness and negative surprises. Non-farm payrolls declined by 533k in November, sending the unemployment rate to a 15 year high of 6.7 percent. With many US corporations forced to tighten their belts, the unemployment rate could rise as high as 8 percent in 2009. We expect this to happen because over the past 50 years on average, recessions have boosted the unemployment rate by 2.8 percent. When the current recession started in December, the unemployment rate was 5.0 percent. If you tack on 2.8 percent to that level that would put the unemployment rate at least 7.8 percent.
Non-farm payrolls could double dip, just as it has in past recessions. In this case, we would expect a rebound followed by another sharp loss that rivals November’s job cuts. A rise in unemployment spreads into incomes, spending and then usually leads to more layoffs. We need to see this toxic cycle end before we can see a recovery. Consumer spending has already been very weak and the trade deficit is widening as the dollar strengthens. As the 2 primary inputs into GDP, we expect fourth quarter growth to be very weak. The strength of the US dollar in Q3 and for most of Q4 will also take a big bite out of corporate earnings, leading to disappointments for the stock market. This is why we expect more weakness in the US dollar and the US economy in the first quarter of 2009. However towards the middle of the second quarter, we may begin to see the US economy stabilize as it starts to reap the benefits of Quantitative Easing and President Barack Obama’s fiscal stimulus plan. New Administrations usually hit the ground running and as such we fully expect the rest of the TARP funds to be tapped shortly after his inauguration. The shape of the US recovery will have a big impact on the price action of the US dollar but there is no question that the path to a stronger dollar will be through a weaker one.
The following chart illustrates how non-farm payrolls double-dipped during the 2001 recession.
How to Trade a News Breakout
This article is taken from the Forex Journal (January 2009 issue).
The author, Chris Capre, is the current Fund Manager for White Knight Investments. He specializes in the technical aspects of trading, particularly using Ichimoku, momentum, Bollinger bands, pivot and price action models to trade the markets
* Chris Capre discusses a breakout strategy to employ when trying to trade Forex news events.
Considering the effect of news announcements on the markets, traders often gravitate toward news events hoping to capture a portion of the market response. In Forex trading, this phenomenon has drawn speculators interest to trading news events like vultures to an about-to-be-corpse lying in a field. It is important to have specific methods when trading such events because of volatility and the unique order flow surrounding them. If a trader is going to trade a news event in the Forex markets, we recommend that they pick the most significant of all economic events.
* Read the whole articleRead the whole article
The author, Chris Capre, is the current Fund Manager for White Knight Investments. He specializes in the technical aspects of trading, particularly using Ichimoku, momentum, Bollinger bands, pivot and price action models to trade the markets
* Chris Capre discusses a breakout strategy to employ when trying to trade Forex news events.
Considering the effect of news announcements on the markets, traders often gravitate toward news events hoping to capture a portion of the market response. In Forex trading, this phenomenon has drawn speculators interest to trading news events like vultures to an about-to-be-corpse lying in a field. It is important to have specific methods when trading such events because of volatility and the unique order flow surrounding them. If a trader is going to trade a news event in the Forex markets, we recommend that they pick the most significant of all economic events.
* Read the whole articleRead the whole article
Pound Bounces Up on Stock Market Growth
The British pound showed the first daily gain today after three consecutive losses against the U.S. dollar as the country’s stock market showed an unexpected growth.
Euro Falls on Europe’s Troubles Worsening
The euro fell against the U.S. dollar and other major currencies, except the pound, as the Russian banks are waiting from their government to negotiate the $400 billion of loans with their mostly European creditors.
New Zealand Dollar Corrects vs. All Majors
The New Zealand dollar went up against all other major currencies today as the country’s jobless report wasn’t as bad as some traders expected and the kiwi needed to correct after some of its greatest losses.
British Pound Drops Before Reports
The Great Britain pound continued to fall against the other major currencies today as the traders expect the negative results from the jobs and inflation reports today.
The pound is currently falling for the second day against the dollar and the euro and for the third against the yen. Market participants expect that the Bank of England Inflation Report will show that the inflation was significantly below the bank’s target rate of 2 percent in the fourth quarter of 2008. The jobless rate is also expected to grow in the report for January.
The weakness of the financial sector in the world and particularly in Britain, which has nothing else left to rely on, combined with the poor expectations for the macroeconomic statistics create a very bad background for the pound’s bulls. The further interest rate reductions are just a matter of time according the financial analysts.
GBP/USD fell from 1.4536 to 1.4407 as of 9:08 GMT today. GBP/JPY slid from 131.30 to 129.50, while EUR/GBP rose from 0.8875 to 0.9006 today.
The pound is currently falling for the second day against the dollar and the euro and for the third against the yen. Market participants expect that the Bank of England Inflation Report will show that the inflation was significantly below the bank’s target rate of 2 percent in the fourth quarter of 2008. The jobless rate is also expected to grow in the report for January.
The weakness of the financial sector in the world and particularly in Britain, which has nothing else left to rely on, combined with the poor expectations for the macroeconomic statistics create a very bad background for the pound’s bulls. The further interest rate reductions are just a matter of time according the financial analysts.
GBP/USD fell from 1.4536 to 1.4407 as of 9:08 GMT today. GBP/JPY slid from 131.30 to 129.50, while EUR/GBP rose from 0.8875 to 0.9006 today.
Forex News Trading
Traders on the Foreign Exchange market, Forex market for short, can potentially make thousands of dollars based on the volatility and fluctuations of a country’s currency. To better themselves and have a leading advantage over other traders, some Forex traders and investors participate in a practice known as news trading. The risks are very high, but the potential gains can be worth thousands of dollars and many traders and investors use this technique.
The technique of news trading is quite simple. It is the trading of foreign currency immediately before or after an important economic news announcement. After such announcements, there is a high possibility that market prices will fluctuate, either for the better or worse, depending on the announcement. For example, if the U. S. Federal Reserve announces another increase of the interest rate, many traders might invest in the U.S. dollar as it is expected that its value will appreciate. The main advantage of news trading is the potential for a country’s currency to make huge gains or losses in very little time. Within minutes of an economic announcement, a country’s currency can gain or lose one hundred points almost instantly. The potential of huge profits attracts Foreign Exchange traders and investors, however there are various risks associated with news trading.
Like any investment, there is always a risk, and news trading on the Forex market is no different. Though the potential profits are huge, the losses are also equally as large. The dangers of news trading come from the fact that a trade must be made quickly or else you are going to lose. If you are caught on the bad side of a trade, your money will be gone quicker than you can blink your eye. You will lose money so fast that there won’t even be time for you to manually close your trades, leaving you with nothing. Stop-loss orders are also potentially dangerous as there is a high probability of slippage because of the sudden price fluctuation.
The technique of news trading is quite simple. It is the trading of foreign currency immediately before or after an important economic news announcement. After such announcements, there is a high possibility that market prices will fluctuate, either for the better or worse, depending on the announcement. For example, if the U. S. Federal Reserve announces another increase of the interest rate, many traders might invest in the U.S. dollar as it is expected that its value will appreciate. The main advantage of news trading is the potential for a country’s currency to make huge gains or losses in very little time. Within minutes of an economic announcement, a country’s currency can gain or lose one hundred points almost instantly. The potential of huge profits attracts Foreign Exchange traders and investors, however there are various risks associated with news trading.
Like any investment, there is always a risk, and news trading on the Forex market is no different. Though the potential profits are huge, the losses are also equally as large. The dangers of news trading come from the fact that a trade must be made quickly or else you are going to lose. If you are caught on the bad side of a trade, your money will be gone quicker than you can blink your eye. You will lose money so fast that there won’t even be time for you to manually close your trades, leaving you with nothing. Stop-loss orders are also potentially dangerous as there is a high probability of slippage because of the sudden price fluctuation.
Top 7 News Sources for Financial Trader
Getting the latest important news is a vital requirement for every Forex, stocks or options trader. The Internet is full of various sites, but not all them feature financial news or provide such news in a timely manner. This list consists of top ten sources for the trader’s news that are updated often and are not mixed up with irrelevant news.
1. Bloomberg — the ultimate news source about everything that is in any way related to the financial markets. Categorization by the regions helps in finding important international news.
2. Forbes.com Breaking News — a great site to get the recent financial information, it also provides free news from several paid news sources (i.e. Associated Press). Stock market traders will like the coverage of almost all kinds of companies.
3. Reuters Business & Finance — Reuters is one of the most professional informational companies in the world and they offer news as a free service to everyone.
4. BusinessWeek — they may be too old-fashioned, but BusinessWeek still features some exclusive news content and the very professional analysis.
5. Financial Times — I like FT for they are not as US-centered as some other financial news sites, they offer a pretty good world news outlook. Can be recommended as a source of Forex related news if you prefer trading exotic currency pairs.
6. CNNMoney — opposite to FT, CNN prefers news from United States, but it’s still good because the majority of world stocks are concentrated on the Wall Street. It will also be useful to the Forex dollar traders.
7. CNBC — a "must have" bookmark for every currency trader; news on foreign currency markets are delivered at the top quality level.
1. Bloomberg — the ultimate news source about everything that is in any way related to the financial markets. Categorization by the regions helps in finding important international news.
2. Forbes.com Breaking News — a great site to get the recent financial information, it also provides free news from several paid news sources (i.e. Associated Press). Stock market traders will like the coverage of almost all kinds of companies.
3. Reuters Business & Finance — Reuters is one of the most professional informational companies in the world and they offer news as a free service to everyone.
4. BusinessWeek — they may be too old-fashioned, but BusinessWeek still features some exclusive news content and the very professional analysis.
5. Financial Times — I like FT for they are not as US-centered as some other financial news sites, they offer a pretty good world news outlook. Can be recommended as a source of Forex related news if you prefer trading exotic currency pairs.
6. CNNMoney — opposite to FT, CNN prefers news from United States, but it’s still good because the majority of world stocks are concentrated on the Wall Street. It will also be useful to the Forex dollar traders.
7. CNBC — a "must have" bookmark for every currency trader; news on foreign currency markets are delivered at the top quality level.
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