FOREX-Dollar inches lower vs high-yielders after Fed

TOKYO, Aug 13 (Reuters) - The dollar slipped on Thursday after the Federal Reserve painted a less gloomy outlook for the U.S. economy but also said rates would remain low for a while, an assessment that led investors to return to commodity-linked currencies.
The Fed said it would slow the pace at which it buys Treasuries by extending the duration, but not the size, of its $300 billion programme to buy long-term government securities. [ID:nN1272730]
The U.S. central bank kept interest rates near zero and said they would likely stay there for an extended period, which dealers said scaled back market speculation that the Fed might raise rates soon.
"The Fed move basically did not have enough impact to alter the market trend of funds flowing into riskier assets," said Kazuyuki Kato, treasury department manager at Mizuho Trust & Banking.
"The prospect that the Fed will keep rates low will likely be one factor causing dollar weakness in the long term," he said.
Primary dealers polled by Reuters do not expect the Fed to raise rates until 2010 at the earliest, with four banks seeing a hike in the first half and seven in the second half. [FED/R]
The euro rose 0.3 percent from late U.S. trade on Wednesday to $1.4227 EUR=.
Higher yielding currencies such as the Australian and New Zealand dollars also rose, extending gains made the previous day after rebounding from steep losses.
The Aussie was up 0.3 percent at $0.8364 AUD=D4, having fallen as low as $0.8180 on Wednesday, while the kiwi advanced 0.3 percent to $0.6736 NZD=D4.
A trader at a European bank said the market had generally taken the Fed's statement as dovish, which was broadly positive for risk and negative for dollar.
"But equity markets still don't look like they have that much steam behind them so people are cautious about piling into risk trades at the moment," he said.
Asian share markets gained on Thursday but many are still largely unchanged so far in August and remain below recent 2009 peaks. The Aussie and kiwi are also sitting just below their highs for the year scored earlier in the month.
DOLLAR/YEN RANGE
The dollar was steady at 96.08 yen JPY= but below last week's eight-week high of 97.79 yen.
Traders said the U.S. currency's upside against the yen seemed to be capped due to talk of Japanese investors repatriating funds related to $27 billion in coupon payments on U.S. Treasuries due on Aug.15. In addition, $61 billion in coupon securities mature on the same day.
Analysts said that while sentiment towards riskier assets had improved there was a general degree of caution on the Fed's move to extend the time frame of asset purchases as it indicated the economy was still vulnerable.
"I guess that leaves its options open just in case the improved economic outlook turns out not be blemish free," said David Watt, a senior currency strategist at RBC Capital. "The Fed is strategically taking a middle road with the BoE on one wing and Norges Bank on the other."
The Bank of England struck a dovish note on Wednesday, saying it might consider cutting the rate it pays on bank reserves in a bid to encourage them to lend more funds. Last week it said it was pumping in an additional 50 billion pounds by buying assets with newly created money.
In contrast, Norway's central bank held rates at a record low but opened the door for increased borrowing costs sooner than expected as the economy continued to recover.
Now the Fed meeting is past, investors are looking to data for trading incentives.
U.S. retail sales for July are due at 1230 GMT and economists in a Reuters survey expect a 0.7 percent rise, a shade stronger than a 0.6 percent rise in June. Excluding automobiles, sales are seen up 0.1 percent compared with a 0.3 percent decline in the prior month. [USRSL=ECI]
Weekly U.S. jobless claims for the week ended Aug. 8 also due at 1230 GMT and are forecast to show 545,000 new filings for jobless benefits compared with 550,000 in the previous week. [USJOB=ECI] (Additional reporting by Anirban Nag in Sydney and Charlotte Cooper in Tokyo; Editing by Michael Watson)

LatitudeFX Limited and GAIN Capital Launch Award-Winning Forex Trading Platform

NEW YORK, AUCKLAND, New Zealand and SYDNEY PRNewswire via COMTEX/ ----Local foreign exchange (forex) trading services provider, LatitudeFX Limited, has partnered with global forex giant GAIN Capital to launch GAIN's award-winning forex trading platform in New Zealand and Australia.

In announcing the partnership and launch of LFX Trader, GAIN Capital CEO, Glenn Stevens, said he was pleased that LatitudeFX had chosen GAIN Capital as its forex provider and believed the arrangement would be a mutually beneficial one.

"The deal struck between the two firms will leverage LatitudeFX's strong presence in both New Zealand and Australia with GAIN Capital's proven forex trading technology, execution, clearing and custody services," said Mr. Stevens.

Locally grown

LatitudeFX is a provider of online trading services, support features and resources to retail traders on both sides of the Tasman.

LatitudeFX CEO, Mark Olley, said his customers are sophisticated retail traders who demand the best tools available.

"With the launch of LFX Trader, LatitudeFX customers have access to a highly customizable trading environment with a full suite of professional charting and order management tools, all supported by an experienced group of local forex professionals," said Mr. Olley.

Features of the LFX Trader platform include:

   --  Streaming executable quotes in 37 currency pairs, with real-time P&L
   and position tracking;
   --  Eight different order types, including advanced orders such as One
   Cancels Others (OCOs), If/Then OCOs, and Trailing Stops;
   --  The ability to set limits and stop loss levels by rate, pips or dollar
   P&L;
   --  A real-time charting package with over 60 technical studies and
   indicators;
   --  The ability to manage open orders and positions directly from the
   charts; and
   
   --  Embedded news and analysis, including intraday, daily and weekly
   research reports covering both fundamental and technical market trends.
   
   

In addition to LFX Trader, LatitudeFX also offers margin FX trading on its popular MetaTrader 4 platform.

Mr. Olley said the partnership with GAIN comes at a time when LatitudeFX is experiencing strong growth.

"Since we opened our first office in Auckland in 2007, the company has gone from strength-to-strength," said Mr. Olley.

Indirect shareholder Macquarie Bank Limited ("Macquarie Bank") provides operational and technical support to the LatitudeFX team as well as access to Macquarie Bank's global forex trading expertise and pricing.

"Our people are highly skilled and respected in their field and we feel that combining these attributes with the market-leading technology of a global player like GAIN Capital will bring a better FX trading experience to individuals in this highly competitive marketplace," said Mr. Olley.

About LatitudeFX

LatitudeFX is a New Zealand incorporated company, founded in 2007 by a number of experienced financial markets participants, who together bring over 60 years experience to the company.

LatitudeFX supply online trading services, support features and resources designed to provide interbank trading capabilities to retail traders. These services are provided directly by LatitudeFX with the support of our providers - all highly regarded organisations chosen for their specific expertise.

LatitudeFX is an "Authorised Futures Dealer" as notified by the New Zealand Securities Commission and is also regulated by the Australian Securities & Investment Commission and holds an Australian Financial Services Licence (AFSL) No.329813.

About GAIN Capital

GAIN Capital is a market leader in the rapidly growing online foreign exchange (forex or FX) industry. Founded in 1999 by Wall Street veterans, GAIN now services clients from more than 140 countries and supports average trade volume of nearly $200 billion per month with its customers and counterparties.

The company operates FOREX.com (www.forex.com) one of the largest, best-known brands in the retail forex industry. FOREX.com services individual investors of all experience levels with a full-service trading platform, advanced tools and research, and extensive education and training. In addition, GAIN Capital provides execution, clearing, custody, and technology products and services, supporting over 50 correspondent and white label arrangements with broker/dealers, Futures Commission Merchants (FCMs) and other financial services firms around the globe.

With offices in New York City, Bedminster, New Jersey, London and Tokyo, GAIN Capital Holdings and its affiliates are regulated by the Commodity Futures Trading Commission (CFTC) in the US, the Financial Services Authority (FSA) in the United Kingdom, and the Financial Services Authority (FSA) in Japan. For more company information, visit www.gaincapital.com or www.forex.com.

SOURCE GAIN Capital

FOREX-Dollar hits 7-week low as safe-haven demand wanes`

MARKETS-FOREX (UPDATE 8):FOREX-Dollar hits 7-week low as safe-haven demand wanes.

* U.S. new-home sales rise sharply in June

* Euro at 7-week high against dollar

* Canadian dollar at 10-month high vs USD (Adds quotes, updates prices, adds detail)

By Wanfeng Zhou

NEW YORK (Reuters) - The dollar fell to its lowest level in more than seven weeks against a basket of currencies Monday as optimism about the global economy dulled the greenback's safe-haven appeal.

A government report showing a jump in U.S. new-home sales last month encouraged investors to take on risk and pushed the yen to multi-week lows versus the dollar and euro. Both the U.S. and Japanese currencies tend to fall when risk appetite improves.

The dollar has come under pressure in recent sessions as upbeat economic data and largely positive results on the U.S. corporate earnings front fueled expectations that the global economy was on the mend.

"Though the housing market remains weak compared to the peaks, the improved data will continue to feed into market optimism on green shoots," said Win Thin, senior currency strategist at Brown Brothers Harriman in New York.

"We had very strong gains last week in equity markets on general optimism," he added. "At this stage, the dollar remains vulnerable to good economic news and so the soft dollar tone is likely to continue."

The ICE Futures U.S. dollar index, a measure of the dollar's performance against six major currencies, fell to its lowest level since early June, at 78.396.

The euro was also buoyed by data showing German consumer sentiment at its highest level in over a year . The single currency last traded up 0.1 percent at $1.4217, after hitting $1.4299, a more than seven-week high and not far off its 2009 peak of $1.4337 hit in early June, according to Reuters data.

Against the yen, the euro also hit its highest level in more than three weeks at 136.09 yen, and last traded up 0.7 percent at 135.49 yen.

The dollar was up 0.5 percent at 95.28 yen , after hitting a session peak of 95.38 yen, the highest level in almost three weeks.

INVESTOR WARY REMAINS

Sales of new single-family homes in the United States rose 11 percent in June from the prior month, while the number of new homes for sale fell to the lowest level since February 1998. Analysts said the data is further evidence that the housing sector, which led the economy into the current recession, is starting to rebound.

"It's more good news," said Jacob Oubina, currency strategist at Forex.com in Bedminster, New Jersey. "So while the data continues to come in better than expected, you're going to see this risk rally continue."

Analysts, however, said the recent surge of optimism may begin to fizzle out as caution sets in ahead of U.S. gross domestic product data on Friday.

"The rally has become a little bit overstretched, not just in equities, but in risk assets in general," said Omer Esiner, senior market analyst at Travelex Global Business Payments in Washington.

The heavy short dollar positions in the market also suggested that "we could be due for a little bit of a correction given the fact the market is very heavily skewed against the dollar," he said.

Data from the Commodity Futures Trading Commission on Friday showed currency speculators nearly doubled their bets against the dollar in the week ended July 21, with the value of dollar net short positions the highest in a year.

The market was also keeping an eye on talks between top U.S. and Chinese officials in Washington on Monday and Tuesday for any comments regarding the dollar.

Meanwhile, the U.S. Treasury will sell a record $115 billion this week and the bond and currency markets are keen to see how demand holds up given rising stock markets and a potentially improving economic backdrop.

In other trading, the Canadian dollar jumped as high as C$1.0779 per U.S. dollar, its strongest since October 2008, while the Australian dollar climbed around 1 percent to a high of $0.8259, the highest level since early June. (Additional reporting by Steven C. Johnson; Editing by Leslie Adler)

Key Concepts in Forex

How many units can I trade with $5000 in my forex trading account? The topics below are especially important to understand margin trading in order to answer this question. 

TOPICS

1. Margin
2. Spread
3. Pip Value
4. Usable Margin
5. Possible Scenarios

1. Margin

Margin is the deposited funds held as collateral to cover any potential losses from adverse movements in prices. Margin requirement is set for each account and affects the number of units you can open and sustain. 

Minimum margin requirement offered by MG Financial is 1%. Under the percentage based margin, the required margin for all accounts is a percentage of the numerical value of the Base Currency or the first currency in the pair. For example, 1% of 1 unit USD/JPY is $1,000 (1% x 100,000USD=1,000USD); 1% of 1 unit EUR/USD is $1,439(1% x 100,000EUR x1.4390 = $1,439).* 

For details on margin calculation, please click here. 

In theory, with $5000 account equity in your account to trade EUR/USD, you can trade a maximum of 3.4 units ($5000 / $1439 per unit = 3.4 units).* 

* Calculated at the market rate of 1.4390 at the time of conversion 

In reality, you are not able to trade 3.4 units. There are a few more factors you need to consider... 

2. Spread

The spread of any currency pair is the difference between the Bid and Ask rate of the two currencies in the pair. For example, spread for EUR/USD with current Bid rate of 1.4387 and Ask rate of 1.4390 is 3. When a position enters the market, your position immediately reflects the revaluation of market value. Under flat market conditions, when entering the market your position may see a negative P/L equivalent to the spread of the currency pair you are trading. 

3. Pip Value

The pip value of 1 standard unit (100,000) for either of the currency pairs of EUR/USD, GBP/USD, and AUD/USD is $10. 

Calculation of Pip value of pairs with USD based currency or Crosses, such as USD/JPY, USD/CAD, or GBP/JPY is a bit more complicated. The Profit Loss Calculator is a useful tool to calculate profit or loss of a potential trade. 

Pip value can be used to calculate how many pips of movement your usable margin can sustain. For example, if your usable margin is $200 and you have 1 unit EUR/USD, the account can sustain 20 pips of market movement against you. 

4. Usable Margin

The usable margin is the amount remaining to place additional trades or amount to sustain market movement against your position. This value is calculated by taking your Account Equity less the Used Margin. Usable margin in simpler terms is the balance of your account less used margin and +/- Profit/Loss. Please remember that because Usable Margin takes into consideration Profit/Loss, this amount changes with market movement. 

5. Possible Scenarios

Now let's try to answer the question...
Beginning Account Equity of $5000 and 1% Margin requirement** 

** Calculated at the market rate of 1.4390 at the time of conversion 

Scenario 1- Trade 1 unit EUR/USD
Usable Margin= $5000 (Beginning Account Equity) - $30 (3 pip spread x $10 per pip) - $1439 (Required margin for 1 unit) = $3531
$3531 (Usable Margin) / $10 (pip value for 1 unit EURUSD) = 353 pips
Your account can therefore sustain 353 pips of movement against you for 1 unit position. 

Scenario 2- Trade 1.5 units EUR/USD 
Usable Margin= $5000 (Beginning Account Equity) - $45 (3 pip spread x $10 per pip x 1.5 units) - $2158.5 ($1439 margin per unit x 1.5 units) = $2796.5 
$2796.5 (Usable Margin) / $15 ($10 per pip x 1.5 units) = 186 pips movement 
Your account can therefore sustain 186 pips of movement against you for a 1.5 unit position. 

Scenario 3- Trade 0.1 unit EUR/USD
Usable Margin= $5000 (Beginning Account Equity) - $3 (3 pip spread x $10 per pip x 0.1 unit) - $143.9 ($1439 margin per unit x 0.1 units)= $4853.1
$4853.1 (Usable Margin) / $1 ($10 per pip x 0.1 unit) = $4853 pips 
Your account can therefore sustain 4853 pips of movement against you for a 0.1 unit position. 

Scenario 4- Trade 3 units EUR/USD
Usable Margin= $5000 (Beginning Account Equity) - $90 (3 pip spread x $10 per pip x 3 units) - $4317 ($1439 margin per unit x 3 units)= $593
$593 (Usable Margin) / $30 ($10 per pip x 3 units) = 19 pips 
Your account can therefore sustain 19 pips of movement against you for a 3 unit position. 

Scenario 5- Trade 0.5 units EUR/USD
Usable Margin= $5000 (Beginning Account Equity) - $15 (3 pip spread x $10 per pip x 0.5 units) - $719.5 ($1439 margin per unit x 0.5 units)= $4265.5
$4265.5 (Usable Margin) / $5 ($10 per pip x 0.5 units) = 853 pips 
Your account can therefore sustain 853 pips of movement against you for a 0.5 unit position. 

Client can also require margin greater than 1%, e.g. 2% or 3 %, and here is an example of trading 1 unit of EUR/USD at the market rate of 1.4390, with 2% margin requirement. 

Scenario 6- Trade 1 unit EUR/USD with 2% margin requirement 
Usable Margin= $5000 (Beginning Account Equity) - $30 (3 pip spread x $10 per pip) - $2878(2% x 100,000EUR x1.4390) = $2092
$2092 (Usable Margin) / $10 (pip value for 1 unit EURUSD) = 209 pips
Your account can therefore sustain 209 pips of movement against you for 1 unit position with 2% margin requirement. 


From the various scenarios depicted above, you can see there is no definite answer to this question. This is highly dependent on the investor's appetite for risk. The investor must also take into consideration all relevant factors and make sure to keep enough usable margin in his/her account to sustain market movement. 

How to Get Started

People are introduced to the exciting world of foreign exchange in many ways: friends, current events, newspapers, television, and many others. For those of you who are new to forex, the following guidelines cover the basics of currency trading. 

Step 1: "Practice makes perfect"

The demo account was designed to help traders gain familiarity with the speed and movements of the market. When you are demo trading, you should learn how to: 1) place market orders to enter a trade, 2) place stop-loss orders to protect your positions, and limit orders to take profits, 3) place OCO orders and If Done Orders to execute more advanced strategies. 

Step 2: "Study, Study, Study".

Forex traders use fundamental analysis, technical analysis, quantitative analysis and sometimes a combination of all three to make their trading decisions.Fundamental analysis involves the use of economic, financial and political news to determine trading decisions. Technical analysis involves the study of Charts to predict future price movements based on past price patterns and trends. Quantitative analysis consists of the use of preset statistical models and properties in quantifying price formations such as averages, retracements as well as identifying oversold and undersold situations. 

In order to help novice and experienced traders alike, MG has developed www.forexnews.com, a leading site on foreign exchange analysis, news and education. Comprehensive previews and summaries updated 4 times per day, insightful editorials covering the latest market developments and an open forum for discussing trading tips and ideas, are just some of the many features of Forexnews.com and MG's commitment to educating and informing Forex participants. 

Step 3: Manage your money wisely.

You should always be aware of the amount of money in your account before placing a trade. If you think a long-term trend is developing, then you should consider whether you have enough funds to maintain your margin and withstand any movements against your position(s) that may occur. We encourage everyone who opens an account with us to ask themselves the following questions prior to entering each trade: 

1) How much am I willing to risk?
2) What is my upside and downside potential?
3) What are the market conditions? (Is the market volatile or calm?)
4) What is the logic behind entering this trade?
5) When can I conclude if the assumptions/logic behind the trade are/is correct or wrong? 

Before entering an order, you should consider both your entry and exit points. One of the mistakes most commonly made by traders, especially new traders, is letting emotions get in the way of their strategy. 

Step 4: Stay Connected:

It is impossible to follow the forex market 24 hours day, 7 days a week. For better management of your account, we encourage you to use our Wireless Service and alert!FX™. 

Step 5: Open a Live Account.

If you feel ready to trade this market, fill out our application forms and submit them today. Since the emotional factor may be higher than it was when you were demo-trading (as you are now committing real money), it is essential that you develop an effective strategy while demo-trading and plan to abide by it when trading your live account. 

We hope you enjoy trading with us and wish you the best of luck!