TOKYO, Sept 17 (Reuters) - The dollar stayed on the defensive on Thursday as investors added to long positions in growth-linked currencies and lifted the Australian dollar to a one-year peak, encouraged by growing evidence of a global recovery.
Asian stocks tracked Wall Street higher after U.S. industrial production rose more than expected in August [ID:nN16118540] boosting sentiment towards riskier assets.
The sustained shift away from the U.S. dollar left the dollar index =USD subdued at 76.292, near 1-year lows of 76.151 struck on Wednesday and with charts pointing to a gradual fall to 2008 levels of around 70.70.
"Firm stocks suggest the dollar is probably set to slide for another week," said Hideaki Inoue, chief manager of forex trading at Mitsubishi UFJ Trust Bank.
The Australian dollar AUD=D4 rose to a one-year peak of $0.8756, up 0.2 percent on the day, with its next targets seen at $0.8813 and then $0.8907.
The New Zealand dollar NZD=D4, which advanced nearly 1.4 percent on Wednesday, was holding firm at $0.7140 with little resistance seen until $0.7200.
The euro EUR= held above $1.47 having struck a one-year high of $1.4738 on trading platform EBS on Wednesday.
The euro has now gained over 2.5 percent this month, riding on improved investor confidence and expectations that U.S. rates are likely to stay rock bottom for some time to come.
But the recent rally in the euro could run out of steam.
"With eight of the nine last sessions ending in euro rallies, the upward trend is extremely stretched," said Matthew Strauss, senior currency strategist at RBC Capital.
"In fact, euro valuations against the U.S. dollar are the most extreme since May this year. The trend is your friend but beware the technical correction."
The yen was broadly lower with the euro gaining 0.3 percent to 134.22 yen EURJP=R and the Aussie climbing 0.6 percent to 79.75 yen AUDJPY=R.
The U.S. dollar also rose 0.2 percent to 91.10 yen JPY= as some traders covered their short positions after it fell as far as 90.12 yen on EBS the previous day, a 7-month low.
On Wednesday, the dollar's slide against the yen picked up pace after Japan's Finance Minister Hirohisa Fujii said a strong yen had advantages for the nation's economy.
Fujii also said he was opposed to currency intervention if movements were gradual, while adding that currency moves were not rapid.
The yen's rise against the dollar on Wednesday was small despite Fujii's clear opposition to intervention, prompting traders to think twice about buying the yen at the moment, some traders said.
"Fujii was so clear about not intervening and he went so far as to say a strong yen has merit. But the dollar's slide against the yen ended up so small," said a senior trader for a Japanese bank.
"That suggests to me there is a background that the yen is missing its own fundamental reasons to be bought."
The yen showed little reaction to the Reuters Tankan manufacturing survey which found manufacturers were growing less pessimistic in September. [nTKC003469]
Also in Japan, the central bank ends its two day policy meeting on Thursday and is expected to keep rates unchanged at 0.1 percent although it could sound a bit more upbeat on the economy.
Data releases pick up later in the day with retail sales for August due in the UK while in the U.S., weekly jobless claims, home starts and the Philadelphia Fed business activity index are scheduled. (Additional reporting by Anirban Nag; Editing by Joseph Radford)
Wednesday, September 16, 2009
Treasury: We won't intervene in forex market
"We promised to help exporters, and we will do so, but not by intervening in the foreign currency market."
A Finance Ministry official vehemently denied reports today that the ministry will provide exchange rate support for exporters. "The Ministry of Finance won't intervene in the foreign currency market," a ministry official told "Globes" today. "We promised to help exporters, and we will do so, but not by intervening in the foreign currency market. We'll help them through guarantees, an aid fund for exporters, and by increasing support for ASHRA - The Israel Export Insurance Corporation Ltd. We'll seek solutions in this spirit."
The Manufacturers Association of Israel has been intensely lobbying the government in recent weeks to solve the problem of the low shekel-dollar exchange rate, which is battering exporters. A senior economic official was quoted this morning as saying, "The government will propose an exchange rate support mechanism."
Ministry of Finance officials have not heard about this, and ridicule it. A ministry official said, "This is a trial balloon by someone with no responsibility for the matter." The official's comment implies that that someone is at the Prime Minister's Office.
The Ministry of Finance official added, "Our position was, and has not changed, that help should definitely be given, because exporters face real hardships, and exports are critical for the economy, but we won't intervene in the foreign currency market. The Bank of Israel is totally with us on this. It's easy to sit in a comfortable office and toss out all kinds of comments without having to take responsibility for them, but the people who actually have to take responsibility should act responsibly. We'll continue to examine options for solving the problem."
Manufacturers Association president Shraga Brosh told "Globes", "It's simply not possible to sit with arms folded and let exports fall, because then the economy will fold, and we won't be there when the world begins to emerge from the crisis." As chairman of the Economics Organizations Liaison Committee, Brosh initiated the convening of Round Table to deal with the problem of the dollar.
The shekel-dollar exchange rate fell another 0.3% in morning inter-bank trading today to NIS 3.749/$.
A Finance Ministry official vehemently denied reports today that the ministry will provide exchange rate support for exporters. "The Ministry of Finance won't intervene in the foreign currency market," a ministry official told "Globes" today. "We promised to help exporters, and we will do so, but not by intervening in the foreign currency market. We'll help them through guarantees, an aid fund for exporters, and by increasing support for ASHRA - The Israel Export Insurance Corporation Ltd. We'll seek solutions in this spirit."
The Manufacturers Association of Israel has been intensely lobbying the government in recent weeks to solve the problem of the low shekel-dollar exchange rate, which is battering exporters. A senior economic official was quoted this morning as saying, "The government will propose an exchange rate support mechanism."
Ministry of Finance officials have not heard about this, and ridicule it. A ministry official said, "This is a trial balloon by someone with no responsibility for the matter." The official's comment implies that that someone is at the Prime Minister's Office.
The Ministry of Finance official added, "Our position was, and has not changed, that help should definitely be given, because exporters face real hardships, and exports are critical for the economy, but we won't intervene in the foreign currency market. The Bank of Israel is totally with us on this. It's easy to sit in a comfortable office and toss out all kinds of comments without having to take responsibility for them, but the people who actually have to take responsibility should act responsibly. We'll continue to examine options for solving the problem."
Manufacturers Association president Shraga Brosh told "Globes", "It's simply not possible to sit with arms folded and let exports fall, because then the economy will fold, and we won't be there when the world begins to emerge from the crisis." As chairman of the Economics Organizations Liaison Committee, Brosh initiated the convening of Round Table to deal with the problem of the dollar.
The shekel-dollar exchange rate fell another 0.3% in morning inter-bank trading today to NIS 3.749/$.
FOREX-Dollar down on higher risk appetite
NEW YORK, Sept 16 (Reuters) - The dollar slumped to a one-year low against major currencies on Wednesday as a recovery in the global economy encouraged investors to look for higher-returning assets.
The euro rallied to a nine-month high, a move analysts said reflected the view investors shunned the dollar as a safe haven.
The yen rallied to a seven-month high against the beleaguered dollar after Japan's incoming finance minister said a strong yen had advantages for the nation's economy.
"Risk appetite is still up on expectations of a global recovery after big data like (U.S.) retail sales yesterday," said Win Thin, a currency strategist at Brown Brothers Harriman in New York.
A report on Tuesday showed U.S. retail sales rose at their fastest pace in 3-1/2 years in August.
Midway through the New York session, the euro EUR= traded at $1.4684, hovering 0.2 percent higher on the day.
The dollar index .DXY, which tracks its performance against a basket of six major currencies, fell as low as 76.187, its weakest level in a year. It last traded at 76.377, down 0.2 percent on the day.
"The general dollar-selling trend remains in place," said Lauren Rosborough, senior currency analyst at Westpac in London, noting that traders were focused on $1.4720, above which would be the euro's highest since September 2008.
Some investors were initially fazed by an increase in the net capital outflow from the United States as seen in the Treasury Department's Treasury International Capital (TICS) flows report. Outflows for July swelled to $97.5 billion from a revised outflow of $56.8 billion in June.
"The headline number certainly paints a bit of a dark picture with regard to overall demand for U.S. assets," said Omer Esiner, a senior market analyst at Travelex Global Business Payments in Washington. "But I think the silver lining of this number is that we still see healthy demand from foreign central banks for U.S. Treasuries. In fact, both Japanese and Chinese holdings of U.S. Treasuries increased."
YEN RALLIES
The dollar JPY= fell 0.1 percent on the day to 90.90 yen though it went as low as 90.10 yen, according to Reuters data.
The dollar earlier plumbed its weakest level against the yen since mid-February after incoming Finance Minister Hirohisa Fujii said he was opposed to currency intervention if movements were gradual, while adding that current moves were not rapid. [ID:nTKU105550].
"The comments suggest the new government is not as keen to interfere in the market as the old one was," said Johan Javeus, chief currency strategist at SEB in Stockholm. "It seems this has given a go ahead signal to the market that it's OK for the yen to strengthen."
Still, he added Fujii's comments that he opposed currency intervention if movements were not rapid suggested the new government, like the old one, remained concerned with the speed of yen appreciation
Analysts have said traders remain cautious about pushing the yen too high due to lingering concerns Japan may act to stem the yen's strength, as they did in a massive intervention campaign in 2003-2004.
Such concerns may limit yen gains around 87 yen, a level hit earlier this year for the first time since 1995.
Market participants said traders were pushing dollar/yen lower in an attempt to test 90.00 yen, which was believed to be lined with options-related barriers.
A separate U.S. government report showing a rise in U.S. consumer prices had limited impact on trading and was soon overshadowed by later reports.
The Labor Department said its closely watched Consumer Price Index rose 0.4 percent in August, after having been flat in July, a touch above expectations for a 0.3 percent gain. [ID:nN15416331]. (Additional reporting by Naomi Tajitsu in London) (Reporting by Nick Olivari; Editing by Kenneth Barry)
The euro rallied to a nine-month high, a move analysts said reflected the view investors shunned the dollar as a safe haven.
The yen rallied to a seven-month high against the beleaguered dollar after Japan's incoming finance minister said a strong yen had advantages for the nation's economy.
"Risk appetite is still up on expectations of a global recovery after big data like (U.S.) retail sales yesterday," said Win Thin, a currency strategist at Brown Brothers Harriman in New York.
A report on Tuesday showed U.S. retail sales rose at their fastest pace in 3-1/2 years in August.
Midway through the New York session, the euro EUR= traded at $1.4684, hovering 0.2 percent higher on the day.
The dollar index .DXY, which tracks its performance against a basket of six major currencies, fell as low as 76.187, its weakest level in a year. It last traded at 76.377, down 0.2 percent on the day.
"The general dollar-selling trend remains in place," said Lauren Rosborough, senior currency analyst at Westpac in London, noting that traders were focused on $1.4720, above which would be the euro's highest since September 2008.
Some investors were initially fazed by an increase in the net capital outflow from the United States as seen in the Treasury Department's Treasury International Capital (TICS) flows report. Outflows for July swelled to $97.5 billion from a revised outflow of $56.8 billion in June.
"The headline number certainly paints a bit of a dark picture with regard to overall demand for U.S. assets," said Omer Esiner, a senior market analyst at Travelex Global Business Payments in Washington. "But I think the silver lining of this number is that we still see healthy demand from foreign central banks for U.S. Treasuries. In fact, both Japanese and Chinese holdings of U.S. Treasuries increased."
YEN RALLIES
The dollar JPY= fell 0.1 percent on the day to 90.90 yen though it went as low as 90.10 yen, according to Reuters data.
The dollar earlier plumbed its weakest level against the yen since mid-February after incoming Finance Minister Hirohisa Fujii said he was opposed to currency intervention if movements were gradual, while adding that current moves were not rapid. [ID:nTKU105550].
"The comments suggest the new government is not as keen to interfere in the market as the old one was," said Johan Javeus, chief currency strategist at SEB in Stockholm. "It seems this has given a go ahead signal to the market that it's OK for the yen to strengthen."
Still, he added Fujii's comments that he opposed currency intervention if movements were not rapid suggested the new government, like the old one, remained concerned with the speed of yen appreciation
Analysts have said traders remain cautious about pushing the yen too high due to lingering concerns Japan may act to stem the yen's strength, as they did in a massive intervention campaign in 2003-2004.
Such concerns may limit yen gains around 87 yen, a level hit earlier this year for the first time since 1995.
Market participants said traders were pushing dollar/yen lower in an attempt to test 90.00 yen, which was believed to be lined with options-related barriers.
A separate U.S. government report showing a rise in U.S. consumer prices had limited impact on trading and was soon overshadowed by later reports.
The Labor Department said its closely watched Consumer Price Index rose 0.4 percent in August, after having been flat in July, a touch above expectations for a 0.3 percent gain. [ID:nN15416331]. (Additional reporting by Naomi Tajitsu in London) (Reporting by Nick Olivari; Editing by Kenneth Barry)
Forex Trading and Bollinger Bands
The Bollinger bands theory was propounded by John Bollinger who formulated this very useful trading tool that builds upon the propensity of bands to expand and contract representing the volatility of forex markets and price behavior. It is based on standard deviation, a statistical tool that traces the relative deviation of a simple average to a maximum and a minimum limit.
Similarly, this trading tool makes use of a simple moving average with its corresponding higher and lower bands that will either expand or contract according to price movements in relation to the average. Traders in most cases use a 20-day average as the middle line or average, and study price movement trends, upwards or downwards, in relation to the 20-day average.
The Bollinger Squeeze is a phenomenon that predicts a major change in the direction of a price movement. The upper and lower bands are the closest to the average middle band on account of meager price movement during the trading period (open and close). However, when price action breaches and subsequently breaks out of a band (upper or lower), it indicates a new price trend. For e.g. if the price breaks out of the upper band then it indicates an upward trend after the gloomy trading period.
On the other hand, if the price breaks out of the lower band, it indicates a downward trend. Fundamentally, another way to look at it is to correlate the gap between the two bands with the length of the bands in a time period. The rule of thumb is that the closer together the bands are, the shorter will be the time that they stay close together.
For a trader, this is a signal that a major price trend reversal in on the cards. When the upper and lower bands are farther apart, it indicates a more volatile market implying a greater propensity for the price action to fall towards the average. However, in many cases the price has also exhibited a jump away from the average when the upper and lower bands expand.
An interesting behavior of Bollinger bands is the “Bollinger Bounce”. According to this, the price movements will eventually always return to the middle band (average) which is because of the balancing act played by the support and resistance levels at each maxim (upper and lower band). These bands therefore indicate a price movement trend. Let us further elaborate on the same.
The greatest disadvantage of the Bollinger bands is its inability to indicate the most suitable phase in a price action trend movement to open or exit a trade or even to initiate buying or selling a currency pair. It only acts an indicator of the trading price volatility. It can only help predict a possible trend and even make a calculated guess on when to expect an anticipated change.
The Bollinger bands work on three bands- upper, lower and a moving average band. The price fluctuates above or below the moving average indicating volatility in the forex market suggesting price behavior behind a currency pair. The narrowing of the upper and lower bands indicates the likelihood for a major price trend change.
Similarly, this trading tool makes use of a simple moving average with its corresponding higher and lower bands that will either expand or contract according to price movements in relation to the average. Traders in most cases use a 20-day average as the middle line or average, and study price movement trends, upwards or downwards, in relation to the 20-day average.
The Bollinger Squeeze is a phenomenon that predicts a major change in the direction of a price movement. The upper and lower bands are the closest to the average middle band on account of meager price movement during the trading period (open and close). However, when price action breaches and subsequently breaks out of a band (upper or lower), it indicates a new price trend. For e.g. if the price breaks out of the upper band then it indicates an upward trend after the gloomy trading period.
On the other hand, if the price breaks out of the lower band, it indicates a downward trend. Fundamentally, another way to look at it is to correlate the gap between the two bands with the length of the bands in a time period. The rule of thumb is that the closer together the bands are, the shorter will be the time that they stay close together.
For a trader, this is a signal that a major price trend reversal in on the cards. When the upper and lower bands are farther apart, it indicates a more volatile market implying a greater propensity for the price action to fall towards the average. However, in many cases the price has also exhibited a jump away from the average when the upper and lower bands expand.
An interesting behavior of Bollinger bands is the “Bollinger Bounce”. According to this, the price movements will eventually always return to the middle band (average) which is because of the balancing act played by the support and resistance levels at each maxim (upper and lower band). These bands therefore indicate a price movement trend. Let us further elaborate on the same.
The greatest disadvantage of the Bollinger bands is its inability to indicate the most suitable phase in a price action trend movement to open or exit a trade or even to initiate buying or selling a currency pair. It only acts an indicator of the trading price volatility. It can only help predict a possible trend and even make a calculated guess on when to expect an anticipated change.
Summary
The Bollinger bands work on three bands- upper, lower and a moving average band. The price fluctuates above or below the moving average indicating volatility in the forex market suggesting price behavior behind a currency pair. The narrowing of the upper and lower bands indicates the likelihood for a major price trend change.
Importance of forex learning courses for traders
By Lance Owen
Should new Forex traders take Forex trading courses or join a Forex training program? Definitely yes; by now you have probably heard that only 5% of traders achieve consistent profitable results when trading the Forex market. The main reason for this is the lack of education. Don’t get me wrong here, taking a Forex training program or a Forex trading course won’t guarantee profitable results, nothing can, but choosing the right Forex training program or Forex trading course will definitely put the odds in your favor.
Before spending any amount of money on any Forex trading course or Forex training program there are some important aspects you need to take in consideration. There are many training programs available, but not every one of them suits the needs of every trader.
The first thing you should be looking in a Forex training program is the content of the material. Unfortunately, most courses or training programs focus or spend most of the time on basic concepts. Though these basic concepts are important, spending most of the course on them won’t help the trader to make consistent results.
Trade sitting at the comfort of home. Start with a mere 50$
The following subjects are what I consider the most important aspects of trading and every training program or trading course should address:
Forex trading basics
Review basic concepts such as: margin, type of orders, a little background, bid/ask, rollover, etc. You need to make sure you understand every single concept to perfection.
Main drawbacks of Forex traders
Being aware of the common mistakes made by Forex traders and knowing how to handle them will prevent new traders from making those mistakes.
Technical and fundamental analysis.
These are the two main approaches adopted by Forex traders. Knowing how to properly apply each concept will definitely put the odds in your favor. The three pillars of Forex trading. I consider that these three subjects have the most impact on every trader trading account.
Forex trading system development.
Having the right system is a must if you want to have consistent profitable results. Having a system that doesn’t fit you will cause a series of problems that will make your trading account vanish away (second guessing the system, not following your system, etc.)
Money management.
This is considered by many successful traders to be the most important single aspect of trading. Money management helps to increase your profits geometrically and at the same time limit your losses (i.e. a good risk reward ratio of about 2:1 will make you money in a Forex trading system that is right only 38% of the time.)
Trading psychology.
Being aware and knowing hot to handle the psychological barriers that affect every trader decision will put the odds in your favor.
Other important aspects every training program should include are: Developing habits for success (such as discipline patience, taking responsibility of every action, commitment, etc.,) understanding and taking our trading as a business, risk and trade management.
Another important aspect you should take into consideration when choosing a Forex training program is the mechanics of it, getting to know how the training program works.
A good course will have the following: 1)A live conference room, where you can apply everything learned under live market conditions. 2)One-on-one feedback, every trader has different needs and requires special attention. For instance a trader wanting to improve the system and requires individual feedback from the instructor about it.
Online trading course, a course that could be accessible through internet. A plus is a course where you are able to access the course at the convenient time for you, so you don’t have to change your lifestyle. A forum, where members can talk just about everything related to the Forex market and the Forex training program.
Trading the Forex market is no easy task. It requires a lot of hard work. Making the right decision will definitely put the odds in your favor. Take your time when doing your diligence because it is a big and important step in a trader’s trading career.
Should new Forex traders take Forex trading courses or join a Forex training program? Definitely yes; by now you have probably heard that only 5% of traders achieve consistent profitable results when trading the Forex market. The main reason for this is the lack of education. Don’t get me wrong here, taking a Forex training program or a Forex trading course won’t guarantee profitable results, nothing can, but choosing the right Forex training program or Forex trading course will definitely put the odds in your favor.
Before spending any amount of money on any Forex trading course or Forex training program there are some important aspects you need to take in consideration. There are many training programs available, but not every one of them suits the needs of every trader.
The first thing you should be looking in a Forex training program is the content of the material. Unfortunately, most courses or training programs focus or spend most of the time on basic concepts. Though these basic concepts are important, spending most of the course on them won’t help the trader to make consistent results.
Trade sitting at the comfort of home. Start with a mere 50$
The following subjects are what I consider the most important aspects of trading and every training program or trading course should address:
Forex trading basics
Review basic concepts such as: margin, type of orders, a little background, bid/ask, rollover, etc. You need to make sure you understand every single concept to perfection.
Main drawbacks of Forex traders
Being aware of the common mistakes made by Forex traders and knowing how to handle them will prevent new traders from making those mistakes.
Technical and fundamental analysis.
These are the two main approaches adopted by Forex traders. Knowing how to properly apply each concept will definitely put the odds in your favor. The three pillars of Forex trading. I consider that these three subjects have the most impact on every trader trading account.
Forex trading system development.
Having the right system is a must if you want to have consistent profitable results. Having a system that doesn’t fit you will cause a series of problems that will make your trading account vanish away (second guessing the system, not following your system, etc.)
Money management.
This is considered by many successful traders to be the most important single aspect of trading. Money management helps to increase your profits geometrically and at the same time limit your losses (i.e. a good risk reward ratio of about 2:1 will make you money in a Forex trading system that is right only 38% of the time.)
Trading psychology.
Being aware and knowing hot to handle the psychological barriers that affect every trader decision will put the odds in your favor.
Other important aspects every training program should include are: Developing habits for success (such as discipline patience, taking responsibility of every action, commitment, etc.,) understanding and taking our trading as a business, risk and trade management.
Another important aspect you should take into consideration when choosing a Forex training program is the mechanics of it, getting to know how the training program works.
A good course will have the following: 1)A live conference room, where you can apply everything learned under live market conditions. 2)One-on-one feedback, every trader has different needs and requires special attention. For instance a trader wanting to improve the system and requires individual feedback from the instructor about it.
Online trading course, a course that could be accessible through internet. A plus is a course where you are able to access the course at the convenient time for you, so you don’t have to change your lifestyle. A forum, where members can talk just about everything related to the Forex market and the Forex training program.
Trading the Forex market is no easy task. It requires a lot of hard work. Making the right decision will definitely put the odds in your favor. Take your time when doing your diligence because it is a big and important step in a trader’s trading career.
Tuesday, September 15, 2009
Forex Trading and Forex Market Hours
The forex market hours stretch from Monday morning in Sydney, Australia to Friday afternoon in New York. During that time the market is open somewhere around the globe at all hours of the day or night. However it is not a 24/7 market because it does shut down on weekends. 24/5 would be more accurate.
If you need to know the exact times that the markets open and close, you have to take time zones into consideration. It is very simple when expressed in UTC. This is Universal Coordinated Time, formerly known as Greenwich Mean Time. This is the standard (winter) time in Greenwich, London which is the point of zero longitude on the globe.
So, the normal forex market hours are 22.00 Sunday UTC to 22.00 Friday UTC. This is 10 pm in the UK in winter time.
New York is 5 hours behind the UK so the global forex market opens and closes at 5 pm Sunday/Friday in New York, 2 pm on the US west coast, 11 pm in Germany, 8 am Monday/Saturday in Sydney.
Things get a little complicated when you start to try to take summer time daylight saving into account. This makes one hour difference in countries that observe it. But daylight saving operates in a different way in the southern hemisphere countries such as Australia which have summer time from September to March instead of March to September.
The hours of the different major national markets are as follows:
Sydney: 10 pm to 7 am UTC
Tokyo: 12 midnight to 9 am UTC
London: 8 am to 5 pm UTC
New York: 1 pm to 10 pm UTC
Or we can express that in EST (Eastern US time):
Sydney: 5 pm to 2 am EST
Tokyo: 7 pm to 4 am EST
London: 3 am to 12 noon EST
New York: 8 am to 5 pm EST
You can see that these correspond to 24 hour cover.
However, this does not necessarily mean that trading will be good at all of these times. Just after a major market opens, the prices can be very volatile and unpredictable. Many traders will stay out of the forex market for up to an hour four times a day when the financial markets are waking up in these major cities.
The US dollar is the most traded currency by a long way, involved in 2.5 times as many trades as its nearest rival the euro. This means that events in the USA have a greater impact on the financial markets than events in other countries. The New York market tends to slow down around 3 pm local time (8 pm UTC) and if you are involved in a US dollar pair, this can be a good time to stop trading for the day.
So theoretically you can trade 24 hours a day from Sunday night to Friday night. Automated software in the form of a forex robot can even make this physically possible. However, a cautious trader will choose his times and will not be active during all of the forex market hours.
If you need to know the exact times that the markets open and close, you have to take time zones into consideration. It is very simple when expressed in UTC. This is Universal Coordinated Time, formerly known as Greenwich Mean Time. This is the standard (winter) time in Greenwich, London which is the point of zero longitude on the globe.
So, the normal forex market hours are 22.00 Sunday UTC to 22.00 Friday UTC. This is 10 pm in the UK in winter time.
New York is 5 hours behind the UK so the global forex market opens and closes at 5 pm Sunday/Friday in New York, 2 pm on the US west coast, 11 pm in Germany, 8 am Monday/Saturday in Sydney.
Things get a little complicated when you start to try to take summer time daylight saving into account. This makes one hour difference in countries that observe it. But daylight saving operates in a different way in the southern hemisphere countries such as Australia which have summer time from September to March instead of March to September.
The hours of the different major national markets are as follows:
Sydney: 10 pm to 7 am UTC
Tokyo: 12 midnight to 9 am UTC
London: 8 am to 5 pm UTC
New York: 1 pm to 10 pm UTC
Or we can express that in EST (Eastern US time):
Sydney: 5 pm to 2 am EST
Tokyo: 7 pm to 4 am EST
London: 3 am to 12 noon EST
New York: 8 am to 5 pm EST
You can see that these correspond to 24 hour cover.
However, this does not necessarily mean that trading will be good at all of these times. Just after a major market opens, the prices can be very volatile and unpredictable. Many traders will stay out of the forex market for up to an hour four times a day when the financial markets are waking up in these major cities.
The US dollar is the most traded currency by a long way, involved in 2.5 times as many trades as its nearest rival the euro. This means that events in the USA have a greater impact on the financial markets than events in other countries. The New York market tends to slow down around 3 pm local time (8 pm UTC) and if you are involved in a US dollar pair, this can be a good time to stop trading for the day.
So theoretically you can trade 24 hours a day from Sunday night to Friday night. Automated software in the form of a forex robot can even make this physically possible. However, a cautious trader will choose his times and will not be active during all of the forex market hours.
Monday, September 14, 2009
Make use of forex reserves
RBI’s primary use of forex reserves is twofold: As an emergency fund in case of a fiscal crisis or food crisis, and to help mitigate any significant volatility in the rupee.
Adhvith Dhuddu
In his book, Making Globalization Work (2007), Nobel Prize winning economist Joseph Stiglitz dedicates a whole chapter to explaining how the global reserve system should be reformed for the greater good of the world economy. After analysing how Asian countries have accumulated significant reserves following the Asian financial crisis, Stiglitz says: “The money put into reserves is money that could be contributing to global aggregate demand; it could be used to stimulate the global economy. Instead of spending the money on consumption or investing the money, governments simply lock it up.”
Not surprisingly, India is a victim of this flawed strategy. RBI’s primary use of forex reserves is twofold: As an emergency fund in case of a fiscal crisis or food crisis, and to help mitigate any significant volatility in the rupee. In its half-yearly Report on Foreign Exchange Reserves, RBI states that, “safety and liquidity constitute the twin objectives of reserve management in India and return optimization becomes an embedded strategy within this framework.” Despite its stated intention, RBI conveniently chooses to ignore how return optimization will be achieved.
There are several ways to measure return optimization of forex reserves. One standard reliable way is to see if forex reserves meet, exceed or lag reserve adequacy ratios.
Some rule-of-thumb reserve adequacy ratios are: sufficient reserves to cover three-four months of imports; reserves that amount to 20% of M2, a broad classification of money supply; a reserves-to-GDP ratio of 10%; and reserves-to-total external liabilities ratio of 100%. Measured against all these global reserve adequacy standards, India’s forex reserves exceed the requirements. Our forex reserves can cover seven-nine months of import; they are at 85-100% of M2; at 25-27% of GDP; and cover our short-term liabilities five-six times over. By this count, the optimal level of forex reserves for India would be somewhere in the $170-190 billion range.
As a start, 10-15% of reserves can be invested in India for various purposes: infrastructure, agricultural loans, educational loans, and so on. Lawmakers and regulators should understand that deploying just $25-30 billion will in no way increase our external vulnerabilities and a sudden outflow of capital would still be manageable.
In fact, the Asian Development Bank endorsed this strategy in early 2008 and encouraged India to use forex reserves to augment infrastructure development. Recently, the India Infrastructure Finance Co. Ltd successfully tapped our forex reserves through its UK subsidiary to fund capital goods purchases for infrastructure projects. So, whether it’s creating special purpose vehicles for investment in India, forming a sovereign wealth fund (SWF) or allocating $100 million each to the best 100 investment ideas in India, the options available to RBI are abundant.
Creative deployment of forex reserves will have political hindrances —SWF investments, for instance, can be badly politicized. But as Stiglitz points out, the current alternative is “governments just (locking) up” these reserves without putting them to work. Old habits, such as investing heavily in government securities and staying satisfied with substandard returns for forex reserve funds, are hard to break.
Forex: BIS: Rising Concerns Over Fiscal Outlook To Add Pressure On Real Forward Rates
(RTTNews) - Monday, the Bank for International Settlements said rising concerns about the fiscal outlook is expected to add upward pressure on real forward rates. Also, the institution said central banks around the world should frame different exit strategies from the monetary stimulus measures.
The BIS assessed that the introduction of central counterparty clearing houses or CCPs and improvements in trading and settlement infrastructure are required to ensure efficiency in the over-the-counter derivatives markets.
According to BIS, the U.S. government is expected to borrow a total of US$1.8 trillion in FY 2009, reflecting a 137% surge from an already elevated level in FY 2008. Such large new government debt would make it difficult for markets to absorb. Along with this concern, worries about the sustainability of rapidly rising fiscal deficits were seen as reasons behind the rise in US long-term yields that was seen in the first half of the year.
Basel, Switzerland-based BIS said in its latest quarterly review, "Fiscal sustainability concerns are likely to affect forward yields that span distant horizons, which are less influenced by near-term expectations about inflation, economic growth and monetary policy."
Despite surging fiscal deficits and record low monetary policy rates, long term inflationary pressures appear to be contained for now, the BIS added. This might mirror the belief that the current high level of economic slack would persist for some time.
According to BIS, financial markets are showing signs of normalizing, as risk tolerance edged further upwards and risk premia receded.
"In interbank money markets, key spreads narrowed to levels not seen since the beginning of 2008, and in some cases even further. Improvements were also visible in credit markets, although important segments continued to rely on central bank support," the quarterly review stated.
The LIBOR/OIS spread, an indicator for the level of stress in the money market, widened sharply after the collapse of Lehman Brothers in September 2008.
In the case of U.S. rates, the spread dropped to the lowest level since the outbreak of the financial crisis in mid-2007, the bank for central banks said.
Despite uncertainty about the pace of economic recovery, investors remained cautiously optimistic in the period between end-May and early September 2009, the report added.
Further, the Bank for International Settlements said the Federal Reserve, the Bank of England and the Swiss National Bank may need to frame different exit strategies from the monetary stimulus measures, as they have different views on how bond purchases would support economic growth.
"The Bank of England and the Federal Reserve, purchasing bonds in order to lower long-term rates, and the Swiss National Bank, purchasing foreign exchange to hold down the Swiss franc, find themselves in different positions from the BoJ," BIS official Robert McCauley wrote in a report, which is part of the latest BIS quarterly review.
Basel, Switzerland-based BIS said various considerations will bear on the choice of the exit path for these central banks, including market functioning, prices and reaction, as well as the run-off of any short-term assets. Different concepts of balance sheet policy - stock versus flow - may also condition the path chosen.
According to the BIS report, the Fed is of the view that hiking interest rate would given enough stimulus without bond sales, while the BoE may want to raise the bank rate and may sell assets at the same time.
The BoE believes that raising the short-term interest rate, while never selling the bond holdings would be "to tap the brake while the other foot remained firmly on the accelerator", the report said. But, the Fed thinks, "without a foot on the accelerator, one could consistently tap the brake."
While deciding to leave its base rate unchanged at a record low of 0.5% on September 10, the BoE also chose to continue the GBP 175 billion asset purchase scheme. The central bank expects the asset purchase scheme to take another two months to complete and will review the scale of the scheme from time to time.
The Swiss National Bank has offered little guidance on its exit from its policy of purchases of foreign assets to resist currency appreciation, the official noted.
The BIS said the contribution of an institution to system-wide risk generally increases more than proportionately with its size.
Any "systemic capital charge" applied to individual institutions should increase more than proportionately with relative size, BIS, also known as the central bank of central banks said in a study, which is part of its quarterly review. Tighter prudential standards should be applied to larger institutions, the Basel, Switzerland-based BIS added.
The charge should rise with the exposure of the institution to sources of systematic risk. That is firms with higher capital charges would be applicable to institutions that are more similar to the typical institution.
With respect to derivatives markets, the BIS assessed that the introduction of central counterparty clearing houses or CCPs is not likely to be sufficient to ensure efficiency in the over-the-counter derivatives markets.
A CCP is an entity that interposes itself between counterparties to contracts traded in one or more financial markets, becoming the buyer to every seller and seller to every buyer.
The introduction of CCPs should be complemented with improvements in trading and settlement infrastructure, the report said. This covers the greater use of automated trading, registration of all trades in central data depositories, and enhanced risk management and disclosure requirements for market participants themselves.
The Basel, Switzerland-based BIS added that experience during the recent crisis highlighted the need for fundamental improvements in the management of counterparty risk and transparency in OTC derivatives markets.
During the financial crisis, existing CCPs arrangements performed well, the report said. However, the crisis exposed the need for international coordination of the oversight of systemically important CCPs by central banks and other relevant authorities. "One important and as yet unresolved question is whether CCPs should have access to central bank credit facilities and, if so, when."
The BIS assessed that the introduction of central counterparty clearing houses or CCPs and improvements in trading and settlement infrastructure are required to ensure efficiency in the over-the-counter derivatives markets.
According to BIS, the U.S. government is expected to borrow a total of US$1.8 trillion in FY 2009, reflecting a 137% surge from an already elevated level in FY 2008. Such large new government debt would make it difficult for markets to absorb. Along with this concern, worries about the sustainability of rapidly rising fiscal deficits were seen as reasons behind the rise in US long-term yields that was seen in the first half of the year.
Basel, Switzerland-based BIS said in its latest quarterly review, "Fiscal sustainability concerns are likely to affect forward yields that span distant horizons, which are less influenced by near-term expectations about inflation, economic growth and monetary policy."
Despite surging fiscal deficits and record low monetary policy rates, long term inflationary pressures appear to be contained for now, the BIS added. This might mirror the belief that the current high level of economic slack would persist for some time.
According to BIS, financial markets are showing signs of normalizing, as risk tolerance edged further upwards and risk premia receded.
"In interbank money markets, key spreads narrowed to levels not seen since the beginning of 2008, and in some cases even further. Improvements were also visible in credit markets, although important segments continued to rely on central bank support," the quarterly review stated.
The LIBOR/OIS spread, an indicator for the level of stress in the money market, widened sharply after the collapse of Lehman Brothers in September 2008.
In the case of U.S. rates, the spread dropped to the lowest level since the outbreak of the financial crisis in mid-2007, the bank for central banks said.
Despite uncertainty about the pace of economic recovery, investors remained cautiously optimistic in the period between end-May and early September 2009, the report added.
Further, the Bank for International Settlements said the Federal Reserve, the Bank of England and the Swiss National Bank may need to frame different exit strategies from the monetary stimulus measures, as they have different views on how bond purchases would support economic growth.
"The Bank of England and the Federal Reserve, purchasing bonds in order to lower long-term rates, and the Swiss National Bank, purchasing foreign exchange to hold down the Swiss franc, find themselves in different positions from the BoJ," BIS official Robert McCauley wrote in a report, which is part of the latest BIS quarterly review.
Basel, Switzerland-based BIS said various considerations will bear on the choice of the exit path for these central banks, including market functioning, prices and reaction, as well as the run-off of any short-term assets. Different concepts of balance sheet policy - stock versus flow - may also condition the path chosen.
According to the BIS report, the Fed is of the view that hiking interest rate would given enough stimulus without bond sales, while the BoE may want to raise the bank rate and may sell assets at the same time.
The BoE believes that raising the short-term interest rate, while never selling the bond holdings would be "to tap the brake while the other foot remained firmly on the accelerator", the report said. But, the Fed thinks, "without a foot on the accelerator, one could consistently tap the brake."
While deciding to leave its base rate unchanged at a record low of 0.5% on September 10, the BoE also chose to continue the GBP 175 billion asset purchase scheme. The central bank expects the asset purchase scheme to take another two months to complete and will review the scale of the scheme from time to time.
The Swiss National Bank has offered little guidance on its exit from its policy of purchases of foreign assets to resist currency appreciation, the official noted.
The BIS said the contribution of an institution to system-wide risk generally increases more than proportionately with its size.
Any "systemic capital charge" applied to individual institutions should increase more than proportionately with relative size, BIS, also known as the central bank of central banks said in a study, which is part of its quarterly review. Tighter prudential standards should be applied to larger institutions, the Basel, Switzerland-based BIS added.
The charge should rise with the exposure of the institution to sources of systematic risk. That is firms with higher capital charges would be applicable to institutions that are more similar to the typical institution.
With respect to derivatives markets, the BIS assessed that the introduction of central counterparty clearing houses or CCPs is not likely to be sufficient to ensure efficiency in the over-the-counter derivatives markets.
A CCP is an entity that interposes itself between counterparties to contracts traded in one or more financial markets, becoming the buyer to every seller and seller to every buyer.
The introduction of CCPs should be complemented with improvements in trading and settlement infrastructure, the report said. This covers the greater use of automated trading, registration of all trades in central data depositories, and enhanced risk management and disclosure requirements for market participants themselves.
The Basel, Switzerland-based BIS added that experience during the recent crisis highlighted the need for fundamental improvements in the management of counterparty risk and transparency in OTC derivatives markets.
During the financial crisis, existing CCPs arrangements performed well, the report said. However, the crisis exposed the need for international coordination of the oversight of systemically important CCPs by central banks and other relevant authorities. "One important and as yet unresolved question is whether CCPs should have access to central bank credit facilities and, if so, when."
Friday, September 11, 2009
Daily Forex Analysis – September 11, 2009
AUDUSD Analysis.
AUDUSD might be forming a short term cycle top at 0.8667 level on 4-hour chart, key support is located at 0.8528, a break below this level will confirm the cycle top, then consolidation in a range between 0.8450 and 0.8667 could be seen to follow. However, a break above 0.8667 will indicate that the uptrend from 0.0.8239 has resumed and the next target would be at 0.8750-0.8800 area.
EURUSD Analysis.
EURUSD stays above 1.4467 key support and remains in uptrend from 1.4177. Further rise to 1.4700 zone is still possible in a couple of days. Near term support is at 1.4500, as long as this level holds, we’d expect uptrend to continue. However, below 1.4467 key support will suggesting that a short term cycle top has been formed on 4-hour chart, then pullback to 1.4400 could be seen to follow.
GBPUSD Analysis.
GBPUSD broke above 1.6623 resistance, suggesting that the downtrend from 1.7042 has completed at 1.6113 level already. Further rise is still possible to 1.6800 zone in a couple of days. Near term support is at the lower border of the rising price channel on 4-hour chart and key support is at 1.6454 level, only break below this level will indicate that the uptrend from 1.6113 has terminated.
USDCAD Analysis.
USDCAD has formed a short term cycle bottom at 1.0673 level on 4-hour chart. Range trading between 1.0673 and 1.0900 is expected in a couple of days. Key support is now located at 1.0673, a break below this level will signal deeper decline towards 1.0500 zone.
USDCHF Analysis.
USDCHF remains in short term downtrend from 1.0698. Bearish movement is expected to continue in a couple of days, and next target would be at 1.0200-1.0250 area. Key resistance is located at 1.0488, only rise above this level will indicate that the downtrend from 1.0698 has completed.
USDJPY Analysis.
No changed in our view, USDJPY stays in a falling price channel on 4-hour chart and remains in downtrend from 97.78. Further decline is expected to 91.00 zone later today. Near term resistance is at the upper border of the price channel, as long as the channel resistance holds, we’d expect downtrend to continue.
AUDUSD might be forming a short term cycle top at 0.8667 level on 4-hour chart, key support is located at 0.8528, a break below this level will confirm the cycle top, then consolidation in a range between 0.8450 and 0.8667 could be seen to follow. However, a break above 0.8667 will indicate that the uptrend from 0.0.8239 has resumed and the next target would be at 0.8750-0.8800 area.
EURUSD Analysis.
EURUSD stays above 1.4467 key support and remains in uptrend from 1.4177. Further rise to 1.4700 zone is still possible in a couple of days. Near term support is at 1.4500, as long as this level holds, we’d expect uptrend to continue. However, below 1.4467 key support will suggesting that a short term cycle top has been formed on 4-hour chart, then pullback to 1.4400 could be seen to follow.
GBPUSD Analysis.
GBPUSD broke above 1.6623 resistance, suggesting that the downtrend from 1.7042 has completed at 1.6113 level already. Further rise is still possible to 1.6800 zone in a couple of days. Near term support is at the lower border of the rising price channel on 4-hour chart and key support is at 1.6454 level, only break below this level will indicate that the uptrend from 1.6113 has terminated.
USDCAD Analysis.
USDCAD has formed a short term cycle bottom at 1.0673 level on 4-hour chart. Range trading between 1.0673 and 1.0900 is expected in a couple of days. Key support is now located at 1.0673, a break below this level will signal deeper decline towards 1.0500 zone.
USDCHF Analysis.
USDCHF remains in short term downtrend from 1.0698. Bearish movement is expected to continue in a couple of days, and next target would be at 1.0200-1.0250 area. Key resistance is located at 1.0488, only rise above this level will indicate that the downtrend from 1.0698 has completed.
USDJPY Analysis.
No changed in our view, USDJPY stays in a falling price channel on 4-hour chart and remains in downtrend from 97.78. Further decline is expected to 91.00 zone later today. Near term resistance is at the upper border of the price channel, as long as the channel resistance holds, we’d expect downtrend to continue.
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Thursday, September 10, 2009
ForexFinland Industrial Output Drops Further In July
(RTTNews) - Thursday, a report by Statistics Finland said the working day adjusted industrial output dropped 24% year-on-year in July, faster than a 19.9% drop in the preceding month.
The electrical and electronics industry showed the largest drop in output of 36.1%, followed by a 32.8% fall in the forest industry and a 32.4% decline in the metal industry.
Month-on-month, the seasonally adjusted industrial output fell 3.1%, after a 1.3% growth in the preceding month.
In the January to July period, output fell 23% from the same period last year.
The electrical and electronics industry showed the largest drop in output of 36.1%, followed by a 32.8% fall in the forest industry and a 32.4% decline in the metal industry.
Month-on-month, the seasonally adjusted industrial output fell 3.1%, after a 1.3% growth in the preceding month.
In the January to July period, output fell 23% from the same period last year.
ForexPhilippine Exports Fall In July
(RTTNews) - Thursday, the National Statistics Office of the Philippines announced that merchandise exports declined at a faster annual rate in July compared to the previous month, as exports of electronic goods plummeted. July marked the tenth successive month of falling exports in the country.
Exports dropped 25.4% year-on-year in July compared to the 24.8% fall in June. Economists had expected exports to fall 20.8%. Total export revenue amounted to $3.31 billion in July, down from the $4.44 billion a year ago.
The decrease in revenue was mainly due to falling exports of electronic goods, which decreased 25.2% year-on-year, and was worth $1.92 billion, or 57.8% of the total revenue. Of this, exports of components/devices (semiconductors), which comprised 42.8% of total exports, declined 24.8% in July.
Exports of cathodes & sections of cathodes, of refined copper witnessed the biggest annual decrease, down 65.5% in July. Articles of apparel & clothing accessories exports slipped 26.4% on year in July, and exports of coconut oil was down 22.6%. Woodcrafts & furniture exports and exports of ignition wiring set & other wiring sets used in vehicles, aircrafts & ships was down 29.9% and 14.3%, respectively.
Analyzing by types of goods, revenue from exports of manufactured goods amounted to $2.82 billion in July, down 22.3% from the $3.63 billion a year ago. Revenue from total agro-based products declined 11% from the year-ago period in July. Revenue from special transactions and mineral products revenue declined 4.1% and 54.4%, respectively. Also, exports of petroleum products fell 86.6% in July, while revenue from forest products was up 47.3% on year.
Shipments to most major markets fell sharply in July. The U.S. was the biggest destination for Philippine exports, with 17.6% of total exports destined for the American market. Japan was the second largest, with a 16.6% share of total exports. The Netherlands, Hong Kong and China comprised the other major destination markets.
On a monthly basis, exports slid 2.8% in July compared to the 10.3% growth in the previous month.
Last week, the Statistics Office announced that consumer prices rose 0.1% year-on-year in August compared to 0.2% in the previous month. Consumer prices excluding volatile goods were up 2.9% in August.
The Philippine peso gained against the major currencies, following the release of the export data.
Exports dropped 25.4% year-on-year in July compared to the 24.8% fall in June. Economists had expected exports to fall 20.8%. Total export revenue amounted to $3.31 billion in July, down from the $4.44 billion a year ago.
The decrease in revenue was mainly due to falling exports of electronic goods, which decreased 25.2% year-on-year, and was worth $1.92 billion, or 57.8% of the total revenue. Of this, exports of components/devices (semiconductors), which comprised 42.8% of total exports, declined 24.8% in July.
Exports of cathodes & sections of cathodes, of refined copper witnessed the biggest annual decrease, down 65.5% in July. Articles of apparel & clothing accessories exports slipped 26.4% on year in July, and exports of coconut oil was down 22.6%. Woodcrafts & furniture exports and exports of ignition wiring set & other wiring sets used in vehicles, aircrafts & ships was down 29.9% and 14.3%, respectively.
Analyzing by types of goods, revenue from exports of manufactured goods amounted to $2.82 billion in July, down 22.3% from the $3.63 billion a year ago. Revenue from total agro-based products declined 11% from the year-ago period in July. Revenue from special transactions and mineral products revenue declined 4.1% and 54.4%, respectively. Also, exports of petroleum products fell 86.6% in July, while revenue from forest products was up 47.3% on year.
Shipments to most major markets fell sharply in July. The U.S. was the biggest destination for Philippine exports, with 17.6% of total exports destined for the American market. Japan was the second largest, with a 16.6% share of total exports. The Netherlands, Hong Kong and China comprised the other major destination markets.
On a monthly basis, exports slid 2.8% in July compared to the 10.3% growth in the previous month.
Last week, the Statistics Office announced that consumer prices rose 0.1% year-on-year in August compared to 0.2% in the previous month. Consumer prices excluding volatile goods were up 2.9% in August.
The Philippine peso gained against the major currencies, following the release of the export data.
Wednesday, September 9, 2009
ForexSweden Economic Activity Index Drops Further
(RTTNews) - Wednesday, the Statistics Sweden said in a report that the activity index, which measures the activity in the Swedish economy, decreased a seasonally adjusted 0.39% month-on-month in July, compared to a revised 0.41% fall in the previous month.
On an annual basis, activity index fell 4.63% in July, after falling 4.76% in June. The decrease in activity index was mainly due to fall in exports of goods and industrial production, the statistical office said.
On an annual basis, activity index fell 4.63% in July, after falling 4.76% in June. The decrease in activity index was mainly due to fall in exports of goods and industrial production, the statistical office said.
Monday, September 7, 2009
Daily Forex Outlook - US Unemployment rises to 9.7%
CURRENCY TRADING SUMMARY - 7th September (00:30GMT)
U.S. Dollar Trading (USD) was volatile as usual for a non farm payroll event but immediate strength after the release of the Unemployment data was reversed as US stocks turned higher from the open. Risk was put back on and the USD/JPY managed to hold above 93 Yen. August Non Farm Payrolls at -216k vs. -225k forecast with an Unemployment Rate at 9.7% vs. 9.5% forecast. Crude Oil was up $0.06 to close at $68.07. In US share markets, S&P ended +13 points (1.31%) at 1016, NASDAQ ended +35 points (1.79%) at 2018 and DOW JONES ended +96 points (1.03%) at 9441. Looking ahead, Holiday in the US today.
The Euro (EUR) tested 1.4200 before bouncing above 1.4300 in a bullish reversal as EUR/JPY buying led the Euro higher. The market is still contained within the recent ranges but the market has been selling rallies which give the preference of buying dips for an eventual breakout on the topside. Overall the EUR/USD traded with a low of 1.4190 and a high of 1.4327 before closing at 1.4311. Looking ahead, July German industrial Orders forecast at 2% vs. 4.5% previously.
The Japanese Yen (JPY) was sold in the US session as the market found itself quite long the Yen after days of buying. USD/JPY led the charge higher but AUD/JPY provided strong support. The markets preference to sell USD/JPY on rallies along with the crosses will be tested this week. Helping the mood was news from China that bank controls will not be implemented this year. Overall the USDJPY traded with a low of 92.30 and a high of 93.26 before closing the day around 92.99 in the New York session.
The Sterling (GBP) followed the Euro gyrations lower than higher but enjoyed support from improved risk appetite. 1.6400 proved solid resistance but the pullback into the weekend was very shallow. GBP/JPY traded above 152 Yen as the recovery extended from the key 150 earlier in the week. Overall the GBP/USD traded with a low of 1.6288 and a high of 1.6410 before closing the day at 1.6395 in the New York session.
The Australian Dollar (AUD) broke out of a 3 month range between 0.8480 and 0.8180 on the topside as the Aussie surged back into favor. AUD/JPY continued to recover and could test the critical 80 Yen level. Positive China news and strong Gold prices led to a strong undercurrent of support on dips. Overall the AUD/USD traded with a low of 0.8380 and a high of 0.8535 before closing the US session at 0.8306. Looking ahead, NAB Business Confidence previously at 10.
Gold (XAU) pulled back from the high $990's and did not challenge the $1000 level. Overall trading with a low of USD$985 and high of USD$997 before ending the New York session at USD$992 an ounce.
TECHNICAL COMMENTARY
Euro - 1.4325
Initial support at 1.4178 (Sept 1 low) followed by 1.4046 (AUG 17 low). Initial resistance is now located at 1.4407 (Aug 27 high) followed by 1.4447 (Aug 5 high)
Yen - 93.15
Initial support is located at 91.74 (July 13 low) followed by 90.54 (February 13 low). Initial resistance is now at 94.07 (August 28 high) followed by 95.06 (Aug 14 high).
Pound - 1.6405
Initial support at 1.6114 (Sept 1 low) followed by 1.6034 (Jul 13 low). Initial resistance is now at 1.6381 (Aug 28 high) followed by 1.6546 (Aug 24 high).
Australian Dollar - 0.8530
Initial support at 0.8239 (AUG 27 low) followed by the 0.8156 (AUG 17 low). Initial resistance is now at 0.8694 (Aug 28 2008 high) followed by 0.8813 (AUG 22 2008 high).
Gold - 992
Initial support at 944 (Aug 31 low) followed by 939 (Aug 24 low). Initial resistance is now at 997 (Sept 3 high) followed by 1000 (Psychological Round Number).
U.S. Dollar Trading (USD) was volatile as usual for a non farm payroll event but immediate strength after the release of the Unemployment data was reversed as US stocks turned higher from the open. Risk was put back on and the USD/JPY managed to hold above 93 Yen. August Non Farm Payrolls at -216k vs. -225k forecast with an Unemployment Rate at 9.7% vs. 9.5% forecast. Crude Oil was up $0.06 to close at $68.07. In US share markets, S&P ended +13 points (1.31%) at 1016, NASDAQ ended +35 points (1.79%) at 2018 and DOW JONES ended +96 points (1.03%) at 9441. Looking ahead, Holiday in the US today.
The Euro (EUR) tested 1.4200 before bouncing above 1.4300 in a bullish reversal as EUR/JPY buying led the Euro higher. The market is still contained within the recent ranges but the market has been selling rallies which give the preference of buying dips for an eventual breakout on the topside. Overall the EUR/USD traded with a low of 1.4190 and a high of 1.4327 before closing at 1.4311. Looking ahead, July German industrial Orders forecast at 2% vs. 4.5% previously.
The Japanese Yen (JPY) was sold in the US session as the market found itself quite long the Yen after days of buying. USD/JPY led the charge higher but AUD/JPY provided strong support. The markets preference to sell USD/JPY on rallies along with the crosses will be tested this week. Helping the mood was news from China that bank controls will not be implemented this year. Overall the USDJPY traded with a low of 92.30 and a high of 93.26 before closing the day around 92.99 in the New York session.
The Sterling (GBP) followed the Euro gyrations lower than higher but enjoyed support from improved risk appetite. 1.6400 proved solid resistance but the pullback into the weekend was very shallow. GBP/JPY traded above 152 Yen as the recovery extended from the key 150 earlier in the week. Overall the GBP/USD traded with a low of 1.6288 and a high of 1.6410 before closing the day at 1.6395 in the New York session.
The Australian Dollar (AUD) broke out of a 3 month range between 0.8480 and 0.8180 on the topside as the Aussie surged back into favor. AUD/JPY continued to recover and could test the critical 80 Yen level. Positive China news and strong Gold prices led to a strong undercurrent of support on dips. Overall the AUD/USD traded with a low of 0.8380 and a high of 0.8535 before closing the US session at 0.8306. Looking ahead, NAB Business Confidence previously at 10.
Gold (XAU) pulled back from the high $990's and did not challenge the $1000 level. Overall trading with a low of USD$985 and high of USD$997 before ending the New York session at USD$992 an ounce.
TECHNICAL COMMENTARY
| Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 |
| EUR/USD | 1.4046 | 1.4178 | 1.4325 | 1.4406 | 1.4447 |
| USD/JPY | 90.54 | 91.74 | 93.15 | 94.07 | 95.06 |
| GBP/USD | 1.6034 | 1.6114 | 1.6405 | 1.6413 | 1.6546 |
| AUD/USD | 0.8156 | 0.8239 | 0.8530 | 0.8694 | 0.8813 |
| XAU/USD | 939.00 | 944.00 | 992.00 | 997.00 | 1000.00 |
Euro - 1.4325
Initial support at 1.4178 (Sept 1 low) followed by 1.4046 (AUG 17 low). Initial resistance is now located at 1.4407 (Aug 27 high) followed by 1.4447 (Aug 5 high)
Yen - 93.15
Initial support is located at 91.74 (July 13 low) followed by 90.54 (February 13 low). Initial resistance is now at 94.07 (August 28 high) followed by 95.06 (Aug 14 high).
Pound - 1.6405
Initial support at 1.6114 (Sept 1 low) followed by 1.6034 (Jul 13 low). Initial resistance is now at 1.6381 (Aug 28 high) followed by 1.6546 (Aug 24 high).
Australian Dollar - 0.8530
Initial support at 0.8239 (AUG 27 low) followed by the 0.8156 (AUG 17 low). Initial resistance is now at 0.8694 (Aug 28 2008 high) followed by 0.8813 (AUG 22 2008 high).
Gold - 992
Initial support at 944 (Aug 31 low) followed by 939 (Aug 24 low). Initial resistance is now at 997 (Sept 3 high) followed by 1000 (Psychological Round Number).
FOREX: Ringgit Stronger Against US Dollar
KUALA LUMPUR, Sept 7 -- The ringgit was stronger against the U.S. dollar in early trading on Monday on commercial buying interest amid steady share prices on Bursa Malaysia, dealers said.
At 9.15am, the ringgit was at 3.5170/5200 compared to Friday's closing of 3.5230/5280.
The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) rose 3.22 points to 1,181.96 at 9.20am, after opened unchanged at 1,178.74.
A dealer said most major currencies gained on better-than expected U.S jobs data released at the end of last week, boosting optimism that the economy was recovering from the global.
The ringgit was likely to move between 3.5100 and 3.5410 today but gains would be limited as investors still consider the greenback as a safe-haven currency, he said.
Against other major currencies, the ringgit opened mostly lower.
It dipped against the Singapore dollar at 2.4490/2528 from 2.2447/4499 at Friday's closing but rose to 2.7809/7862 against the Japanese yen from 2.7959/7017 previously.
Against the pound sterling, the ringgit depreciated at 5.7658/7721 from 5.7608/7707 Friday and weakened against the euro at 5.0370/0424 from 5.0308/0383 previously.
At 9.15am, the ringgit was at 3.5170/5200 compared to Friday's closing of 3.5230/5280.
The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) rose 3.22 points to 1,181.96 at 9.20am, after opened unchanged at 1,178.74.
A dealer said most major currencies gained on better-than expected U.S jobs data released at the end of last week, boosting optimism that the economy was recovering from the global.
The ringgit was likely to move between 3.5100 and 3.5410 today but gains would be limited as investors still consider the greenback as a safe-haven currency, he said.
Against other major currencies, the ringgit opened mostly lower.
It dipped against the Singapore dollar at 2.4490/2528 from 2.2447/4499 at Friday's closing but rose to 2.7809/7862 against the Japanese yen from 2.7959/7017 previously.
Against the pound sterling, the ringgit depreciated at 5.7658/7721 from 5.7608/7707 Friday and weakened against the euro at 5.0370/0424 from 5.0308/0383 previously.
WORLD FOREX: Euro Rises Vs Yen, Dlr On Share Market Strength
TOKYO (Dow Jones)--The euro rose modestly against the yen and dollar in Asia Monday, as stronger regional share markets encouraged short-term players to buy the risk-sensitive common currency.
If global share markets remain firm this week, the euro could continue edging up, traders said.
In Asia Monday, regional bourses strengthened, with China's benchmark Shanghai Composite Index up 1.60% midday and Japan's Nikkei 225 Stock Average up 1.0%. That came after the Dow Jones Industrial Average's closed up 1.0% Friday, which boosted the euro against its rivals.
"The market today inherited some euro bullishness from Friday, and with share markets in positive territory, it's more of a 'risk-on' than a 'risk-off' market," said Satoshi Tate, senior vice president of the forex division at Mizuho Corporate Bank. "So it's not at all strange to see the euro extending gains."
At 0450 GMT, the euro traded hands at Y133.51 compared to Y133.06 late Friday in New York. Against the dollar, the common currency stood at $1.4334 compared to $1.4301. The euro could rise to Y135 and $1.4400 later in the week if share markets gained further, Tate said.
Dealers and analysts said the euro was also helped at the expense of the dollar by fears that the U.S. could be slower than Euro-zone countries to scale back massive economic stimulus measures and raise interest rates. The lack of any mention of coordination on such "exit strategies" from the Group of 20 nations' financial heads in the weekend London meeting reinforced that view.
"The absence of talk about a coordinated withdrawal of policy stimulus leaves the market with the expectation that the US will lag other countries in its withdrawal of stimulus (both fiscal and monetary policy)," signaling that the dollar remains prone to falling when global share markets rise, wrote Barclays Capital Research in a report.
Indeed the Dollar Index, which measures the currency's value against six major units including the euro, edged down to 78.06 from 78.16 late Friday in New York.
Further increasing expectations that Washington may be slow to unwind its massive stimulus is the worsening unemployment rate, which payrolls data Friday showed up to 9.7% in August.
But while the dollar fell against other rivals Monday, it gained slightly against the yen, trading hands at Y93.15 at 0450 GMT compared to Y93.03 late Friday in New York. Short-term players were buying the currency, prompted by the stronger regional equities and a rise in U.S. long-term interest rates, with the benchmark 10-year Treasury yield up to 3.43% Friday.
"This week, the dollar/yen seems set to try the upside, looking stronger after it retook the Y93 mark Friday," said Mizuho Corporate Bank's Tate. The currency could rise as high as Y94.50 this week, he said, echoing other dealers in noting substantial selling orders at that level that would likely cap further rises.
Players will be watching U.S. Treasury auctions totaling $70 billion this week for cues on interest rate moves, dealers said.
If global share markets remain firm this week, the euro could continue edging up, traders said.
In Asia Monday, regional bourses strengthened, with China's benchmark Shanghai Composite Index up 1.60% midday and Japan's Nikkei 225 Stock Average up 1.0%. That came after the Dow Jones Industrial Average's closed up 1.0% Friday, which boosted the euro against its rivals.
"The market today inherited some euro bullishness from Friday, and with share markets in positive territory, it's more of a 'risk-on' than a 'risk-off' market," said Satoshi Tate, senior vice president of the forex division at Mizuho Corporate Bank. "So it's not at all strange to see the euro extending gains."
At 0450 GMT, the euro traded hands at Y133.51 compared to Y133.06 late Friday in New York. Against the dollar, the common currency stood at $1.4334 compared to $1.4301. The euro could rise to Y135 and $1.4400 later in the week if share markets gained further, Tate said.
Dealers and analysts said the euro was also helped at the expense of the dollar by fears that the U.S. could be slower than Euro-zone countries to scale back massive economic stimulus measures and raise interest rates. The lack of any mention of coordination on such "exit strategies" from the Group of 20 nations' financial heads in the weekend London meeting reinforced that view.
"The absence of talk about a coordinated withdrawal of policy stimulus leaves the market with the expectation that the US will lag other countries in its withdrawal of stimulus (both fiscal and monetary policy)," signaling that the dollar remains prone to falling when global share markets rise, wrote Barclays Capital Research in a report.
Indeed the Dollar Index, which measures the currency's value against six major units including the euro, edged down to 78.06 from 78.16 late Friday in New York.
Further increasing expectations that Washington may be slow to unwind its massive stimulus is the worsening unemployment rate, which payrolls data Friday showed up to 9.7% in August.
But while the dollar fell against other rivals Monday, it gained slightly against the yen, trading hands at Y93.15 at 0450 GMT compared to Y93.03 late Friday in New York. Short-term players were buying the currency, prompted by the stronger regional equities and a rise in U.S. long-term interest rates, with the benchmark 10-year Treasury yield up to 3.43% Friday.
"This week, the dollar/yen seems set to try the upside, looking stronger after it retook the Y93 mark Friday," said Mizuho Corporate Bank's Tate. The currency could rise as high as Y94.50 this week, he said, echoing other dealers in noting substantial selling orders at that level that would likely cap further rises.
Players will be watching U.S. Treasury auctions totaling $70 billion this week for cues on interest rate moves, dealers said.
Sunday, September 6, 2009
Foreign currency reserves soar to new record
The Bank of Israel doubled its level of foreign currency purchases last month.
The Bank of Israel today reported that foreign exchange reserves at the end of August 2009 stood at $56.4 billion, an increase of $4.3 billion from their level at the end of July, and an all time record.
The Bank of Israel today reported that foreign exchange reserves at the end of August 2009 stood at $56.4 billion, an increase of $4.3 billion from their level at the end of July, and an all time record.
The central bank, led by Governor of the Bank of Israel Prof. Stanley Fischer, reported that it purchased $4.07 billion on the market in August, while a revaluation of the reserves and income totaled $241 million. The total was reduced slightly by $6 million in private sector transactions and government transfers abroad of $1 million.
August was a watershed month for the Bank of Israel, which on August 11 discontinued its policy begun in March 2008, of intervening consistently on the market and buying $100 million in foreign currency per day. The central bank switched to a policy of random purchases after announcing, "The Bank of Israel will act in the foreign exchange market in the event of unusual movements in the exchange rate which are inconsistent with underlying economic conditions, or when conditions in the foreign exchange market are disorderly."
As a result of the new policy, the Bank of Israel's purchases of $4.07 billion in foreign currency in August were nearly double the $2.1 billion purchased in July. Israel's foreign currency reserves have now risen from $28.46 billion at the end of 2007 to $42.34 billion at the end of 2008 to a record $56.4 billion at the end of last month.
Overlay launches volatility forex fund
Overlay Asset Management, the currency management arm of BNP Paribas, will today launch an innovative fund focusing on volatility in the $3,200bn (£1,958bn, €2,249bn) a day foreign exchange markets.
The fund provides an alternative to traditional directional currency trading at a time when the most common strategy, the carry trade, has suffered from strong correlation with equities and other mainstream asset classes.
The launch of the SingleHedge Currency Option Fund forms part of Overlay’s expansion strategy. The Paris-based company, which has £11.3bn under management, will shortly open a London office.
While volatility trading is relatively commonplace in equity markets it is much less advanced in other asset classes, although Bank of New York Mellon does offer a fund designed to exploit “extreme” market conditions in forex markets.
“While we are not necessarily going to preclude the fund taking directional positions on spot rates, our idea is really to trade currency volatility,” said Elizabeth Para, currency investment strategist. “We expect the fund to display quite low correlation with the market.”
The “highly leveraged” Dublin-domiciled Qualifying Investor Fund, primarily aimed at fund of fund managers who may already have currency exposure, is targeting returns of 20 per cent a year.
WORLD FOREX: Euro Rebounds In Choppy Trading On Risk Appetite
NEW YORK (Dow Jones)--The euro rebounded against the dollar Friday after a U.S. stock rally increased risk appetite, something earlier U.S. jobs data failed to do.
Currencies gyrated after the morning release of the U.S. non-farm payrolls report for August, but stayed within their well-worn ranges in light summer trading before the U.S. Labor Day holiday.
Investors had hoped the August payroll numbers would provide greater clarity on the pace of an economic recovery, but the data were mixed. The headline payroll number came in better than expected, but the unemployment rate increased to 9.7%, the highest since 1983.
Bangladesh's Forex Reserve Falls To $8.64 Billion After ACU Payment
Dhaka, Bangladesh - Bangladesh has made a routine payment of US$522 million to the Asian Clearing Union (ACU) against imports between July and August of this year, officials said on Sunday.
The payment pushed the foreign exchange reserve down to $8.643 billion Sunday from $9.149 billion the previous day, according to officials at the central bank.
"The central bank has already remitted the fund to the ACU headquarters in Tehran in line with the existing provision of the eight-member union,' a senior official of the Bangladesh Bank (BB), the country's central bank, told AHN Media in Dhaka, preferring anonymity.
Under the existing provisions, outstanding import bills and interest accruing against thereof are settled at the end of every two months among the member countries.
"Our imports from the ACU member countries increased a little bit during the period under review due mainly to the holy month of Ramadan," the BB official said, adding that India is the main trading partner under the ACU arrangement.
A total of $468 million was paid for the May-June period of this year, he added.
Bangladesh's foreign exchange reserve would reach close to $9 billion shortly after receiving $106 million more from the International Monetary Fund (IMF).
The Washington-based multilateral donor agency will provide the additional $105 million shortly to bolster the country's foreign exchange reserve in the wake of the global economic recession, the BB officials added.
The IMF has released the first batch of funds worth $630 million recently as part of the special drawing rights (SDR) allocation, which has been made to all 186 IMF members.
"We expect that the foreign exchange reserve would stay at around $9.0 billion even after making payment to the ACU," Deputy Governor of the central bank Ziaul Hassan Siddiqui told AHN in Dhaka on September 1, 2009.
The ACU is an arrangement among the central banks of Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan and Sri Lanka to settle trade related payments on a multilateral basis.
The payment pushed the foreign exchange reserve down to $8.643 billion Sunday from $9.149 billion the previous day, according to officials at the central bank.
"The central bank has already remitted the fund to the ACU headquarters in Tehran in line with the existing provision of the eight-member union,' a senior official of the Bangladesh Bank (BB), the country's central bank, told AHN Media in Dhaka, preferring anonymity.
Under the existing provisions, outstanding import bills and interest accruing against thereof are settled at the end of every two months among the member countries.
"Our imports from the ACU member countries increased a little bit during the period under review due mainly to the holy month of Ramadan," the BB official said, adding that India is the main trading partner under the ACU arrangement.
A total of $468 million was paid for the May-June period of this year, he added.
Bangladesh's foreign exchange reserve would reach close to $9 billion shortly after receiving $106 million more from the International Monetary Fund (IMF).
The Washington-based multilateral donor agency will provide the additional $105 million shortly to bolster the country's foreign exchange reserve in the wake of the global economic recession, the BB officials added.
The IMF has released the first batch of funds worth $630 million recently as part of the special drawing rights (SDR) allocation, which has been made to all 186 IMF members.
"We expect that the foreign exchange reserve would stay at around $9.0 billion even after making payment to the ACU," Deputy Governor of the central bank Ziaul Hassan Siddiqui told AHN in Dhaka on September 1, 2009.
The ACU is an arrangement among the central banks of Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan and Sri Lanka to settle trade related payments on a multilateral basis.
Saturday, September 5, 2009
How to Skip the Risks When You’re FX Trading
If there’s one thing I’ve learned over the years, it’s that Forex trading is only as risky as you want it to be.
After all you have complete control. You’re in control of what size lots you trade (including the micro-lots I mentioned yesterday)….what account balance you decide to start with…and how many lots you trade in that account.
ALL of these are factors determine how much risk you use when you’re trading in the Forex market.
Don’t Bother Using “Corvette Type” Leverage If You’re Driving a Neon
I often liken risk in the currency market to cars.You see, I could drive a Corvette that can speed up to 200 mph or I could drive a Dodge Neon that taps out at 100 mph. But just because the Corvette can drive twice as fast doesn’t mean that I HAVE to drive at 200 mph every time I get behind the wheel of my Corvette.
In fact, I’ll probably get pulled over and get a speeding ticket eventually if I try it.Well, it’s the very same way with your trading account. Just because you have the ability to trade standard lots that trade 100,000 units of currency at a time (and use 100 times leverage), doesn’t mean you should…especially if you’re trading with a smaller account.
The trick is to match the level of risk to your account size. For example, if you’re trading a $50,000 account, you’re officially driving a corvette-type account. This means you can handle the advanced leverage if you’re up for it. Of course, you can also trade mini-lots and minimize your risk if that’s your ultimate goal.
On the other hand, if you have a smaller account (say $1,000 to $10,000), I recommend using micro or mini-lots to cut down on your risk.
Learn from Their Mistakes!
Of course, not everyone understands this concept.I’ve seen traders who only trade 1 or 2 mini lots in a $100,000 account. I’ve seen others who for some dumb reason wanted to trade the same amount of lots in a $300 account.
Even though these two accounts are trading the same amount, the trader with the $300 account is likely to be out of money in a trade or two. That means they’re trading WAY too much risk in relation to their account size.
Meanwhile, the trader with the $100,000 account has nothing to worry about really. They’re using a very low level of risk in relation to their account size.
This is exactly why some people say currencies are “too risky.” It’s because they do NOT understand how to minimize the risks. It’s not true…it’s actually fairly simple. Just use some common sense. If you have a larger account you can afford to trade more lots, and use higher leverage. If you have a smaller account, trade smaller lots and use smaller lot sizes to cut down your risk.
So don’t believe this huge MYTH that Forex is “too risky.” In fact, it’s the Forex traders who determines MOST of the risk themselves.
Forex Wrap: 30 Pips-A-Piece In August
In the month of August the six (6) major pairs moved a total of one hundred and eighty (180) pips against the Usd, net. That equates to 30 (thirty) pips of movement, on average, each. In review, those thirty (30) pips have come in explosive 30 minute periods of trade that not only do not hold, they tend to reverse with as much velocity in the next session.
The real shame for currency traders has been that if that momentum hit at a major price point, rather than in the middle of nowhere ranges, they dead-lock on fair value would easily be broken. This is a reflection of the new post-credit crisis rule book that has on page one; "There should be no excessive risk taken, and margin requirements will be increased so that liquidity is thin, and things cannot move too far at any one go"...
Global markets and forex pairs have completely mixed trends, order flows, and sentiment reads after the final session of the week came with a 30 minute explosion of trade. The 24 hour session would not be the same without a 30 minute dash that takes an elevator ride, after stair-stepping around for the last twenty hours.
Friday, September 4, 2009
Forex settlement volumes rise in August - CLS
LONDON, Sept 4 (Reuters) - The average number of daily foreign exchange payment instructions rose in August from the previous month, data from FX settlement system CLS Bank showed on Friday.
The average volume of payment instructions was 589,446, with an average value of $3.33 trillion in August. Volumes were up 3 percent from 572,214 in July, although the average value was down 0.3 percent from $3.34 trillion the previous month, it said.
Average foreign exchange volumes peaked at a record 727,934 last October, but hedge funds and some other liquidity providers in the market had reined in activity due to ongoing financial turmoil.
In the second quarter, the average daily volume during the three months to June was 580,585 and an average daily value of $3.29 trillion.
More than 6,000 brokers, funds and corporates use the CLS Bank service.
(Edting by Andy Bruce)
GAIN Capital's FOREX.com Adds Spot Gold and Silver Contracts to MetaTrader 4 Platform...
NEW YORK and LONDON, Sept. 4 /PRNewswire/ -- GAIN Capital Holdings, Inc., a
global provider of online trading services, today announced that its FOREX.com
UK subsidiary had added spot metals to its MetaTrader 4 platform. Clients are
able to trade gold (XAU/USD) and silver (XAG/USD) on a margined basis, with
spreads currently as low as four cents. The two metals products are in
addition to the currency pairs currently available on FOREX.com's MetaTrader
platform.
FOREX.com added metals to FOREXTrader, its own proprietary platform, earlier
this year.
"For many of our clients, the trading of spot gold and silver will be a
natural extension to their foreign exchange trading, as the precious metals
market is driven by several factors that currency traders typically follow,
including the strength of the U.S. dollar and the price of oil," said Matthew
Wright, regional director EMEA.
FOREX.com has a unique MetaTrader offering that provides:
-- an EA optimized environment, including micro lot trading and hedging
-- free EA hosting services for qualified accounts
-- proprietary daily market commentary and analysis from FOREX.com's
global research team
-- personalized customer service, 24-hours a day during market hours
-- the ability to fund and hold account balances in Sterling, Euro, or
USD
-- the additional benefit of segregated funds protection with a Financial
Services Authority (FSA) regulated firm
Jane Foley, director of research at FOREX.com, added, "Aggressive policy
reactions by central banks around the world to the current global economic
downturn have flavoured the outlook for inflation into the medium-term and
heightened interest in the prospects of gold and silver prices which are
traditional inflation hedges. Consequently, movements in the prices of these
metals are again at the fore of market awareness, making them an interesting
trading prospect at the current time."
For more information and to register for a free practice account, visit
http://www.forex.com/MetaTraderUK.
About GAIN Capital
GAIN Capital Holdings, Inc. is a global provider of online trading services,
specializing in foreign exchange (forex or FX) and contracts for difference
(CFDs). Customers and trading partners in more than 140 countries have
utilized the company's award-winning trading platform which transacts nearly
$200 billion per month.
A pioneer in online forex trading, GAIN Capital operates FOREX.com
(www.forex.com), one of the largest and best-known brands in the retail forex
industry. It also provides execution, clearing, custody and technology
products and services to an institutional client base including asset
managers, broker/dealers and other financial services firms.
With offices in New York City; Bedminster, New Jersey; London; Seoul; and
Tokyo, GAIN Capital and its affiliates are regulated by the Commodity Futures
Trading Commission (CFTC) in the United States, the Financial Services
Authority (FSA) in the United Kingdom and the Financial Services Authority
(FSA) in Japan.
GAIN's investor group includes private equity firms 3i, VantagePoint Venture
Partners, Tudor Ventures, Edison Venture Fund and Cross Atlantic Capital
Partners. For company information, visit www.gaincapital.com or
www.forex.com.
FOREX-Yen dips broadly after U.S. August jobs report
NEW YORK, Sept 4 (Reuters) - The yen fell on Friday after news that U.S. employers cut fewer jobs than expected in August, reinforcing recent data pointing to an economic recovery and dimming safe-haven demand for the Japanese currency.
Major currencies see-sawed earlier as traders said the jobs data was a mixed bag, with light trading ahead of the U.S. Labor Day holiday adding to volatility.
The U.S. economy cut 216,000 jobs in August, while the unemployment rate rose to 9.7 percent, the Labor Department said on Friday. Analysts had expected nonfarm payrolls to drop by 225,000 and the unemployment rate to rise to 9.5 percent. For more see [ID:nL4577554].
"I think it's a little bit mixed in terms of the number and that's fairly evident from the market's reaction afterwards," said Camilla Sutton, senior currency strategist at Scotia Capital in Toronto.
"On the one side is that the unemployment rate climbs significantly higher and that just keeps fears alive that the unemployment rate is still moving higher and will remain high for a longer period of time. However, the payrolls number ... shows that the pace of job losses has declined," she added.
In midafternoon trading in New York, the dollar was up 0.4 percent against the yen at 92.98 yen JPY=, after hitting a session low of 92.26 yen.
The euro rose 0.4 percent to $1.4313 EUR=, near the session high of $1.4327, and against the yen was up 0.8 percent at 133.10 yen EURJPY=R.
"When the dust settles on nonfarm payrolls, it's positive for the high yield currencies by boosting risk appetite," said Kathy Lien, director of currency research at GFT Forex.
The yen also fell against other major rivals, with sterling up 0.8 percent GBPJPY= and the Australian dollar up 1.8 percent AUDJPY=.
The dollar fell 0.3 percent against the yen over the last five trading sessions, its fourth straight weekly decline. It has lost 4.8 percent in the last four weeks. It lost 6.1 percent in the four weeks to July 12.
For the week. the euro was little changed against the dollar.
CANADIAN DOLLAR RALLIES
The August payrolls number followed U.S. data on the manufacturing and sectors earlier this week, supporting the view that the recession is coming to an end, although the outlook for a recovery remained uncertain.
"The economy needs to generate jobs, and until we get near zero or go positive, it's still a tremendous drag on the economy," said Joseph Trevisani, senior market analyst at FX Solutions in Saddle River, New Jersey. "The evidence of what's going on is that we're seeing only a very slow change."
Uncertainty about the global economy may lead to a pullback in risk-seeking, benefiting the dollar and yen in the coming months, said Brian Kim, currency strategist at UBS in Stamford, Connecticut.
Scotia's Sutton said the price of gold is providing interesting indications of risk appetite. "There's been a dramatic move higher in gold," she said. "There're many who think that's really indicating that risk aversion is about to jump higher, which would be bad for equities and good for the U.S. dollar."
The Canadian dollar rallied, with the U.S. currency falling 1.6 percent to C$1.0850 CAD=, according to Reuters data, buoyed by an unexpected rise in employment in Canada in August. [ID:nOTT001697]
Investors also looked ahead to a meeting in London this weekend of finance ministers from the Group of 20 rich and developing nations. G20 policymakers will promise to keep economic support packages in place until recovery is certain. [ID:nLQ516726] (Additional reporting by Steven C. Johnson and Wanfeng Zhou; Editing by James Dalgleish)
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