TOP XMTHAI

US DollarThe US dollar declined today, along with other safe currencies, as manufacturing growth in Europe and China was somewhat higher than was predicted by forecasters, reducing demand for the currency as a safe haven.

HSBC Flash China Manufacturing PMI was at 49.8 in August, somewhat higher than the median forecast of 49.7 and the highest level in two months. Flash Eurozone Manufacturing PMI was at 49.7 this month, a little higher than expected (49.6), but lower than July figure — 50.4. The Standard & Poor’s 500 Index rose 1.5 percent, while the Stoxx Europe 600 Index went up 1.6 percent.

EUR/USD rose from 1.4357 to 1.4483 today as of 10:33 GMT and posted the high of 1.4499 during the day. GBP/USD climbed from 1.6450 to 1.6544, while reached the intraday high of 1.6572 earlier.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Earlier News About the US Dollar:

    * Dollar Rises While Traders Afraid of Recession (2011-08-18)
    * Good Week for Dollar Even After FOMC Statement (2011-08-13)
    * Week Begins with Fall of EUR/USD & USD/JPY (2011-08-08)
    * Future of the US Dollar with AA+ Rating (2011-08-07)
    * Dollar Declines as Stock Markets Continue Their Fall (2011-08-05)

Great Britain poundThe Great Britain pound tumbled today as the Services Purchasing Managers’ Index slumped in August, confirming a bad state of Britain’s economy and reducing attractiveness of the UK currency as a haven from problems in continental Europe.

The Services PMI dropped from 55.4 in July to 51.1 in August, only a little above the level of 50.0 that indicates no change. The report said:

    Respondents primarily blaming a weaker underlying trend in new business and general economic uncertainty. There were a few reports that the rioting and public disorder seen in some areas of the country in early August had adversely affected activity.

GBP/USD slumped from 1.6150 to 1.6076, following the jump to 1.6185, and GBP/JPY tumbled from 124.20 to 123.64 today as of 14:01 GMT.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

Earlier News About the Great Britain Pound:

    * Pound Profits from Terrible US Payrolls (2011-09-02)
    * Forecast: Fundamentals Aren't Favorable for Pound (2011-08-30)
    * Pound Goes Down as UK Economy Slows (2011-08-26)
    * GBP Falls vs. EUR with Consumer Confidence & Retail Sales (2011-08-25)
    * Pound Rises as Inflation Accelerates (2011-08-16)

EuroThe euro plunged today, falling for the fifth consecutive session against the US dollar and the Japanese yen, after Germany’s ruling party lost election.

German Chancellor Angela Merkel’s Christian Democratic Union lost election in all six German states. The results of the elections ignited worries that now Germany will be even more opposed to paying bailouts with money of its taxpayers. The Stoxx Europe 600 Index of shares lost 2.8 percent, falling for the second day.

EUR/USD slipped from 1.4161 to 1.4121 and EUR/JPY fell from 108.92 to 108.56 as of 12:50 GMT today.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

Earlier News About the Euro:

    * Euro Ends Rally as ECB Expected to End Interest Rates Hikes (2011-08-30)
    * Euro Falls for Second Day vs. Dollar (2011-08-25)
    * Euro Drops as Europe's Economic Growth Slows (2011-08-16)
    * Euro Weakens as Investors Shun European Bonds (2011-08-02)
    * Euro Slids for Second Day on Debt Crisis Concern (2011-07-28)

Australian dollarThe Australian dollar rallied for almost the whole week, posting the third week of gains against the US dollar in the longest run of weekly gains since April, but by the end of the week fundamentals became unfavorable for the currency.

The Australian dollar was rising on the speculation the Reserve Bank of Australia won’t cut the interest rates. Futures on interest rates indicate only 20 percent probability that RBA Governor Glenn Stevens will cut the bank’s main rate on September 6. Most traders believe that there is 80 percent chance the central bank will maintain the key rate unchanged this month. Australia’s Cash Rate is considered the biggest target lending rate among developed nations.

The rally of the Aussie looked unstoppable until the US non-farm payrolls came out, sending markets in disarray and destroying risk appetite as they came out even worse than most pessimistic forecasts. The Australian currency managed to stay above this week’s opening, but erased three days of gains against the dollar and the yen. What’s worse, it looks like the growth-linked currency may continue to fall next week as risk-aversion style of thinking is returning to markets.

AUD/USD opened at 1.0583, jumped to 1.0764 and closed at 1.0641 this week. EUR/AUD slid from 1.3692 to 1.3346. AUD/JPY jumped from 81.23 to 82.81 during this week before closing at 81.71.

If you have any questions, comments or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

Earlier News About the Australian Dollar:

    * Australian Retails Sales Go Up, Aussie Follows (2011-09-01)
    * Building Permits in Australia & New Zealand Rise, Aussie & Kiwi Gain (2011-08-30)
    * Aussie Recovers on Stevens' Speech (2011-08-26)
    * Australia's Dollar Weakens on Germany's Consumer Confidence (2011-08-25)
    * Australia Dollar Receives Help from Commodities (2011-08-17)

South African randThe South African rand rallied today, rising to the highest level in more than a week against the US dollar, as stocks and metals advanced after the speech of Federal Reserve Chairman Ben S. Bernanke last week.

Bernanke said last Friday that the Fed has means to support growth of the US economy, improving market sentiment. The main South African stock index jumped 1.7 percent as prices on the London Metal Exchange increased for a fourth day. South Africa’s economy itself performs not that good, though, and many investors still convinced that the nation’s central bank will cut interest rates.

USD/ZAR fell from 7.1300 to 7.0810 today as of 9:56 GMT and touched 7.0680 — the lowest level since August 17.

If you have any questions, comments or opinions regarding the South African Rand, feel free to post them using the commentary form below.

Earlier News About the South African Rand:

    * Rand Weakens on Prospect of Interest Rates Cut (2011-08-22)
    * Rand Near Monthly High vs. USD on Rate Difference, US Uncertainty (2011-07-26)
    * Rand Weakened by Credit Rating Outlook for Greece (2011-07-05)
    * Rand Weakens with Commodities on US Growth Forecast (2011-06-23)
    * South African Rand Falls on Greek Crisis, Trims Losses (2011-06-20)

US DollarThe fundamentals this week were negative for the US dollar, weakening the currency against some major counterparts, but performance of the greenback wasn’t that bad, considering all the pressure to the downside.

There were plenty of bad new for the dollar this week. Bad housing data, rising unemployment claims and slower that expected growth of the US economy. The week ended with the speech of Ben Bernanke, who hinted at possibility of additional stimulus without detailing an actual plan.

The dollar was dragged down by the unfavorable fundamentals and fell against the euro and commodity currencies (including the currencies of Canada, Australia and New Zealand). On the other hand, the dollar gained against the franc and rallied versus the yen before losing its gains by the end of the week as there aren’t many choices for investors who need a safe currency, but afraid of interventions of Japan and Switzerland. The pound also fell against the greenback as Britain has its own problems that erase attractiveness of the nation’s currency.

Next week may also be hard for the dollar. Analysts predict another unfavorable report about hosing and are pessimistic about employment data.

EUR/USD climbed from 1.4376 to 1.4498, while during the week it dropped to 1.4327. USD/CHF climbed from 0.7904 to 0.8058 and reached the daily high of 0.8157. AUD/USD surged from 1.0380 to 1.0569.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Earlier News About the US Dollar:

    * Dollar Drops After Bernanke Speech & GDP Report (2011-08-26)
    * Will Bernanke Announce QE3? Will Dollar Decline? (2011-08-25)
    * Dollar Gains Before Bernanke Speech (2011-08-24)
    * Dollar Falls on China's & Europe's Manufacturing (2011-08-23)
    * Dollar Rises While Traders Afraid of Recession (2011-08-18)

Japanese yenThe Japanese yen advanced today, heading to the highs against the dollar last seen during the post-World War II period, and made the Japanese government even more nervous about the currency’s strength.

Investors seek safer assets after North American and European stocks fell. The Standard & Poor’s 500 Index slid 2.6 percent today and the Stoxx Europe 600 dropped 0.9 percent.


The Swiss franc could be the place for investors to put their money in, but the move by Switzerland’s central bank to weaken the nation’s currency made the yen more attractive than the franc as a safe haven. Traders should be cautious, though, as Japan may also intervene to curb appreciation of its currency. Japan’s Finance Minister Yoshihiko Noda spoke today in parliament about danger of a strong currency to the nation’s economic growth.

USD/JPY dropped from 76.95 to 76.46 as of 15:10 GMT today after falling to the record low of 76.34. EUR/JPY sank from 110.63 to 108.37, while earlier it reached 108.31 — the lowest level since March 17.

If you have any questions, comments or opinions regarding the Japanese Yen, feel free to post them using the commentary form below.

Earlier News About the Japanese Yen:

* Impact of BoJ Intervention on Yen Wanes (2011-08-09)
* Yen Slumps on BoJ Intervention (2011-08-04)
* Yen Gains on Greece & US Debt Problems (2011-07-28)
* EU Summit Eases Need for Safety, Yen Drops (2011-07-22)
* Second Week of Gains for Yen, Will BOJ Intervene? (2011-07-16)


This entry was posted on TopForexNews on Wednesday, August 10th, 2011 at 3:10 pm and is filed under Japanese Yen. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

New Zealand dollarThe US dollar fell today, heading for a second weekly decline, as the problems of the US and Europe makes traders less willing to invest in currencies perceived to be riskier.

The currency of the South Pacific nations is linked to economic growth and thus reacts negatively to the prevalent pessimistic mood on markets. Such mood intensifies as the threat of the debt crisis spreading to Italy and Spain increases. The economic situation in the US isn’t much better and the report about consumer sentiment later this day is expected to show the confidence of the US citizens declined. The kiwi (the nickname of the New Zealand currency) erased most of its losses since the initial decline and now continues to go higher.


NZD/USD was down from 0.8316 to 0.8279 today as of 10:03 GMT, while reaching 0.8180 intraday. NZD/JPY dropped from 63.88 to 63.49 and the daily low today was 62.71.

If you have any questions, comments or opinions regarding the New Zealand Dollar, feel free to post them using the commentary form below.

Earlier News About the New Zealand Dollar:

    Risk Rally Pushes NZD to Records vs. Dollar (2011-08-01)
    New Zealand Economy Expands, NZD/USD Jumps to Record (2011-07-14)
    China's Economy Makes Kiwi More Appealing, NZD/USD at Record (2011-07-13)
    Search for Higher Yield Draw Investors to Kiwi (2011-07-06)
    NZ Dollar Reaches Record vs. US Dollar on Business Confidence (2011-06-30)


This entry was posted on TopForexNews on Friday, August 12th, 2011 at 10:03 am and is filed under New Zealand Dollar. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Great Britain poundUK Chancellor of the Exchequer George Osborne rejected demands of the opposition to reconsider the spending cuts that are biggest since World War II. The Great Britain pound reacted positively to the news.

Opposition to the spending cuts is strengthening as riots and looting in London intensifies and spreads to other cities. Yet Britain’s government remains firm in their intention to maintain the record cuts. Osborne explained that the credibility of the UK austerity measures helped in attracting investors to government bonds, aiding the nation’s economy. Prime Minister David Cameron claimed that the planned decrease of expenditure on the police can be performed “without any reductions in visible policing”.

The sterling gained against the euro, the dollar and the yen on yesterday’s trading session. The UK currency slid against the greenback as today’s trading session has started. The pound attempts to hold against the yen, but slowly gives up gains. Against the euro Britain’s currency rallied for three sessions and still hasn’t showed signs of weakening.

GBP/USD advanced from 1.6132 to 1.6237 and retreated to 1.6212 as of 1:34 GMT today. GBP/JPY rallied from 123.95 to 124.72 on the previous trading session and attempts to hold at this today. Meanwhile, EUR/GBP fell from 0.8770 to 0.8750 today in the third straight session of declines.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

Earlier News About the Great Britain Pound:

    Pound Drops with Higher Trade Deficit (2011-08-09)
    Pound Weakens on Worsening Consumer Sentiment (2011-07-21)
    GBP/USD Erases Losses After BOE Minutes (2011-07-20)
    UK House Prices Fall for First Time in 2011, Sterling Weaker (2011-07-18)
    Pound Falls vs. Euro on Jobless Claims (2011-07-13)


This entry was posted on TopForexNews on Friday, August 12th, 2011 at 1:34 am and is filed under Great Britain Pound. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Swiss francThe Swiss franc slumped today against all major currencies as Swiss National Bank Vice President Thomas Jordan suggested that a short-term peg of the nation’s currency to the euro could be legal.

The SNB was attempting to weaken the Swiss currency for several years. So far such attempts were futile. There is a difference this time, though, as a peg wouldn’t have just one-time effect as the previous interventions, but would put a continuous pressure on the franc. It looks like Switzerland’s central bank is ready for unconventional measures and such measures can help the bank to achieve its goals for making the franc’s strength less threatening to the country’s economy.

The potential weakening of the Swiss franc can pose an interesting question (in case the SNB would be able to achieve such weakening, of course): what currency can be considered a safe haven? The yen is also under pressure of interventions, while the dollar doesn’t look that safe. Perhaps investors, interested in safety, would shun the Forex market altogether.

USD/CHF surged from 0.7263 to the daily high of 0.7687 today before trading near 0.7617 as of 21:01 GMT. EUR/CHF climbed from 1.0296 to 1.0843. CHF/JPY slumped from 105.72 to 100.88.

If you have any questions, comments or opinions regarding the Swiss Franc, feel free to post them using the commentary form below.

Earlier News About the Swiss Franc:

    SNB Moves In, Franc Moves Back (2011-08-10)
    Fed Plans Keep Zero Rates till 2013, Dollar Hurt (2011-08-09)
    CHF at New Record vs. USD, Gains vs. Other Currencies (2011-08-08)
    Intervention: Way to Weaker Franc or Bluff of SNB? (2011-08-08)
    Swiss Franc Prevails Despite Intervention (2011-08-04)


This entry was posted on TopForexNews on Thursday, August 11th, 2011 at 9:01 pm and is filed under Swiss Franc. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Currency is the basic unit used mainly for the exchange of goods and services. There are several different currencies used all around the world. All the countries in the world have their own currencies. There are currencies as strong as US dollar and as weak as Zimbabwean dollar. The value of a currency is necessary for forex trading.
Change in World Economy
Balancing Money and the Earth



Previously the currencies of the world were valued on the basis of their comparison to the price of gold. The price of gold in the international market was a determinant factor in deciding the price of the currency. To maintain the price of their currency states were bound to keep reserves in the form of gold. To make it simple we can say that in the past the more gold reserves a state had the higher the price of its currency would gain.
What Laid the Foundations of Forex

With the passage of time world economy has witnessed many changes. The end of Barton Wood system changed world’s reserve system. The growth of economy required the change in world’s reserve system.

The reserved system which lied previously on gold was replaced with US dollar. Some countries are using Euro as their reserves. However most of the states have a dollar based reserve system.
The Currency Prices

The prices of foreign currencies are referred to as forex or FX in international market. The currency exchange is also known as foreign exchange. These currencies are compared mainly in pairs. The aim is to determine which currency has more value as compare to the other currency. The major pairs are US dollar against the Japanese yen, and/or the British pound against the European euro. US, Britain, Japan, Europe and some other states fall into the category of great economic zones. The currencies of great economic zones are needed worldwide for trade. The Australian dollar, Swiss franc, and Canadian dollar also fall in the category currencies of great economic zones. Hence, the forex currencies of these states are traded in the international banks.
Why Forex is Necessary

What are Forex Currency Prices

The forex is vital for many reasons. The forex currencies are necessary for international trade and commerce. Several banks and other financial institutions trade these currencies for their own benefits.

Not all the currency pairs are as strong as the pair of US dollar and Japanese yen. There weak currency pairs also exist. The pairs of US dollar and Polish zloty and Japanese yen and Thai baht are examples of weak pairs.
Currency Pairs

There is another category of currency pair, which is not used in forex as much as the strong pairs or to some extant the weak pairs. These currency pairs are known as exotic pairs. The currency pairs discussed so far are traded widely. The currencies of rest of the countries are traded for some specific purpose.

Tourists or businessmen, who need these currencies, either get them in exchange of their own currencies or trade them vis-à-vis dollar. In this method of exchange a currency is valued in dollar, and the buyer gets the currency of his need according to its value in dollar.

If you are looking for an online job on internet then you should consider online trading. You can earn a remarkable amount of money by forex trading. When it comes to the fastest, efficient and the most workable online trading then forex trading is the answer. Forex trading offers many benefits for traders if they get enough learning of forex trading before officially starting it. A number of features of forex trading make it is the most suitable tool to generate online money.
Useful Information about Forex Trading Market

When you consider working as a forex trader, you should gather some authentic information about forex trading market to work as an effective forex trader. Following is the useful information for you to get a quick start as a forex trader with full confidence.
Timings of Forex Market

Timings of Forex Market

Forex market remains open 24 hours a day around the world and it starts working from Sunday (afternoon/evening) till the following Friday (afternoon/evening). You can work online from anywhere in the world and become a day trader.
Risk Probability

Forex market is risky for amateur traders, but still if you learn before start working as a forex trader then you can trade effectively with low risk.
Amount of Investment

You can start your forex trading account will a very little amount of investment. This is because the technological advancements that have made it is easier for home based small investors to start online trading with only few hundred dollars.
Forex Pips

Forex market allows you to take a start with little investment and you can easily find brokers regardless of the amount you can invest. A number of brokers are always available to offer you their services.
Price Actions

You should be aware of the changes occur in price. It is obvious that you cannot know about the exact change in price but you can predict these price actions by using any analysis method.

Price actions are the reasons for the continuous working of forex market and without price fluctuations there will be no forex trading.
Currency Market

Currency Market

If you decide to trade in currency market then you can generate profit by the fluctuations occur in price. On the other hand, if you decide to trade in shares and stocks, then you have to rely only on the rising of market.
Dummy Trading Accounts

You can take a start with a dummy forex account. These accounts are being offered by the online forex brokers. You don’t have to invest real money unless you feel sure about your success in forex trading.

It is recommended to you to learn forex trading or take a course of forex trading before starting it officially. After that you should choose a system and try to stick with that system. Be persistent and train yourself to bear the ups and down of forex trading. You also have to learn from your mistake if you want generate real profits. For online trading, it is highly important for you to find an authentic website. Search a reliable forex trading system that you feel is suitable for your personality type and for your lifestyle.

The introduction of Forex trading tools have made this business more simple and easy to understand for newbie’s. Actually, none of the device can be considered as ideal for the sake of currency trading. Nonetheless, the professional in this field have developed couple of practical instruments that offer a comprehensive idea about the currency market.
Tools Helps to Make Good Profit



The more skilled traders in this professional have accepted the fact that right t use of Forex trading tools will bring substantial earnings.
Forex Trading Tools Update the Knowledge of Traders

Forex Trading Tools

The Forex trading entails the swapping of international currencies and also earning money through this practice. The market of Forex trading has been scattered on geographical basis and is illustrated by large investments. The Forex trading tools facilitate the trader in getting the latest information about the market trends; hence he/she can earn more profits.
Tools Provide Daily Summaries of Important Currencies

The most vital characteristics of Forex trading tools are to supply the reviews of main currencies on daily basis. These also provide weekly reviews of the currencies besides the other main updated information about the market. This aids the traders in understanding the most recent situation of the currency market through which they evaluate the market stipulation. By having a thorough knowledge about the currency market, the traders can forecast the potential tendencies and invest accordingly.

In this regard couple of mechanical softwares has been launched as Forex trading tools. The development in technology has invented certain softwares that gather all the essential details robotically and save this information for the trader.
Easy to Analyze Currency

Currently the task of evaluating the currency has become very simple. In this regard, the novice traders particularly use these gears in practical and useful manner. These software tools can be downloaded from internet for an insignificant cost. Now you can access the latest market situation just with few mouse clicks.
Forex is One of the Biggest Trading Markets

Numerous currencies are traded on daily basis in Forex trading market. It is therefore, not an easy job to maintain the record of whole trade with the alteration in rates of different currencies.

As a vigilant trader, one must be aware of the most recent happening in the currency market. This purpose can solely be achieved with the help of Forex trading tools. It provides an immediate access to the trading reviews; else it would not be easy to acquire these reviews.
The Updated Information Makes the Decision Easier

If the trader has information about the prevailing rates as well as the daily and weekly reviews, he/she can take more appropriate decision. There are couple of more tools that assist trader to keep an eye on rates of interest.

These tools also provide them complete accessibility to the dictionary as well as the monetary almanac. All these gadgets are mandatory for Forex trading.
The Forex Trading Tools are Available at Your Home

Forex trading tools are within the reach of traders

Now these Forex trading tools are within the reach of traders in their own homes. The biggest benefit of Forex trading is flexibility of time, because the currency market is open 24 hours a day. The trading activities can be performed with the help of internet and the cash can also be relocated automatically with the help of electronic machines

If you have PC as well as the internet at your place, you will have an easy access to the Forex tools and the foreign currencies for trading. There are plentiful companies on internet that offer the functional gadgets, such as comprehensive market study for easy trading.
Online Tools Help in Saving Money

These online tools can be downloaded from internet free of cost. If a trader would like to save cash, he/she can utilize these online tools. These online companies issue financial reports and also have various discussion forums

The existing Forex graphs as well as the other covert trading information unearthed by the internet companies are also very helpful for the investors. The combinations of one’s skills with the Forex trading tools will surely make him/her triumphant.

Last month, the G20 finally agreed on the specific factors that would be used to determine whether a country was manipulating its currency. Despite being watered-down (by the usual suspects), the so-called “scorecard” is nonetheless extremely substantive. Unfortunately, the resolution will be backed only by “peer pressure,” rather than any kind of real enforcement mechanism, which means that in practice it is basically worthless.


While the proximate goal of the resolution is to eliminate exchange rate manipulation, it’s ultimate goal is to minimize the risk of another economic/financial crisis. Towards that end, a country’s “budget deficit levels, the external imbalance and private savings rates” will be closely scrutinized, and will be warned if any of these factors reach levels that are deemed to be unsustainable. The idea is that an early warning system will prevent the global economy from reaching a point of disequilibrium that is so severe that crisis would be impossible to avert.

Of course, the problems with this program are manifold. First of all, there are no concrete numbers. For example, it’s not clear how large a country’s national debt or trade deficit has to reach before it receives a phone call and slap on the wrist from the G20. In fact, you could argue that the same imbalances that precipitated the crisis are largely still in place, which means that some countries should have been warned yesterday.

Second, there is no meaningful enforcement mechanism. That means that countries that disregard the resolution don’t really have anything to fear, other than the wrath of investors. In other words, if governments and Central Banks know that they can manipulate their exchange rates with impunity, what’s to stop them? Look at Japan: its public debt is the highest in the world. It runs a perennial trade surplus. Its citizens are notorious savers. And yet, when the Yen rose to a record high, which you might expect from such an imbalanced economy, the G7 (in this case) took the unusual step of pushing the Yen down. I’m not saying this wasn’t the right thing to do, but what kind of signal does this send to other rule breakers.

While all emerging market countries took an active interest in exchange rates (and seek to exert some control over their currencies), China is certainly Public Enemy #1, and is the clear target of the “currency manipulation” talk. To its credit, the People’s Bank of China (PBOC) has permitted the Chinese Yuan to appreciate 20% against the Dollar (probably 30% when inflation is taken into account) over the last few years. Meanwhile, both internal government statisticians and the IMF expect its current account surplus to narrow to a mere 5% in 2011, as its economy slowly rebalances.

In this sense, I think China is a case in point that the best enforcement mechanism is reality. Specifically, China has reached a point where it cannot continue to pursue an economic policy based on exports, without spurring inflation and causing the inefficient allocation of domestic capital (such as in real estate). It must raise interest rates and accept the continued appreciation of the RMB is an unavoidable byproduct.

The same goes for other countries that attempt to hold their currencies down. If they can get away with it, then so be it. If not, I can guarantee that it won’t be the G20 that forces them to change.

While analysts have been busy dissecting the implications of the natural disasters that ravage(d) Japan for forex markets, the focus has naturally been directed towards the Yen. Given all the rumors about the liquidation of foreign (i.e. Dollar-denominated) assets, it’s also worth examining the potential impact on the Dollar. In a nutshell, Japan’s holdings of US Treasury Securities are extensive, and even a partial unloading could have serious
implications for the world’s de facto reserve currency.
As I explained in my previous post, the Yen rose to a record high (against the Dollar) following the earthquake/tsunami/nuclear crisis because of rumors that Japanese insurance companies and other financial institutions would begin repatriating all of their foreign assets in order to pay for rebuilding. (For the record, it’s worth pointing out again that this has yet to take place, and any repatriation is probably related to the approaching fiscal-year end. Thus, the Yen is being propelled by speculation/short squeeze. Period.)
Indeed, Goldman  Sachs has estimated that the rebuilding effort will probably cost around $200 Billion. A significant portion of this will no doubt be covered by the payout of insurance claims. How insurance companies will make their claims is of course, unknown. However, consider that Japanese insurance companies have insisted that they have ample cash reserves. In addition, Japan has what is perhaps the world’s most solid earthquake reinsurance (basically insurance for insurers) program, which means primary insurance companies can basically pass these claims up the chain, perhaps all the way to the government.
As for whether the Bank of Japan will sell some its $900 Billion in Treasury holdings, this, too appears unlikely. First of all, the Bank of Japan is doing everything in its power to soften the upward pressure on the Yen, which would not be consistent with selling any of its Dollar-assets. Second,  the Financial Times has further argued that they will be especially unlikely to sell US Treasury securities, because they would lose money on (US Dollar) currency depreciation. Besides, any assets that are sold now to pay for rebuilding would probably need to be repurchased later in order to restore balance sheet equilibrium.
While I am on the topic, I want to draw attention to a recent Treasury report that documented the overseas holdings of Treasury securities. The major surprise was China, whose holdings were revised upwards to $1.18 Trillion (from $892 Billion), which means it is well-entrenched as the most important creditor to the US. However, this was offset by a 50% drop in the Bank of England’s holdings, caused perhaps by a change from US debt to British debt.
As I have written in the past, it seems unlikely – for political, economic, and financial – reasons that China will move to pare its Treasury holdings in a significant way. Simply, it has no other viable options for investing the foreign exchange reserves that it is forced to accumulate because of the Yuan-Dollar peg. Other doomsdays have speculated that the crisis in the Middle East will end the “petro-Dollar” phenomenon, whereby oil exporters settle their bills almost exclusively in Dollars and use the proceeds to buy Treasuries. While US influence in the Mid East may indeed wane further as a result of the ongoing political turmoil, I don’t think this will force a change to the PetroDollar phenomenon, which is due as much to unavoidable trade surpluses as it is to settling oil transactions in US Dollars.
There is certainly some concern about what will happen when the Fed wraps up QE2 later this year and stops buying Trreasury securities. Two prominent investment companies (PIMCO and Vanguard) have warned that this will cause bond prices to fall and interest rates on debt to rise rapidly. While this is certainly possible, demand for Treasuries will remain strong for as long as the current risk-averse climate remains in place. In addition, given that the US Treasury is not in danger of defaulting anytime soon, yields reflect expectations for inflation and interest rates more than supply/demand for the bonds themselves. Finally, when the Fed stopped buying mortgage backed securities in 2010, mortgage rates fell, contrary to expectations.
In short, the Dollar might continue to fall against the Yen as speculators cover their short positions, but not because of any fundamental reasons. On an aggregate basis, the never-ending string of crises won’t cause the Dollar to collapse. If anything, it might even bring some risk-averse capital back to the US and re-affirm the Dollar’s status as global reserve currency.

One of the basic and foremost instincts of a human being is to earn more and more profits. Making a profit greatly depends upon market conditions and general tactics. There are some useful steps which if being followed will help a lot, in understanding  the chemistry of these marketing conditions and to get some consistent profits from forex trading.

Day Traders

Most of us prefer being day traders, and it is the utmost desire and necessity to earn some profit by the end of the day. Being an efficient day trader, for instance, one should have in mind the average daily range for each of major currency pairs. In the last three months, most of the leading pairs have noticed their averages fall quite rapidly as indicated by the Average True Range indicator.
So, if the same trend continues, it leads to smaller and smaller trading range at the end of each day.

Necessary Precautions

As for those who don’t know, by the end of December 2010 the average range of the GBP /USD pair was 135 points at the time of writing. People, who enjoy early morning breakouts, must be cautious about trading early in the morning by taking in consideration of overnight trading points range. Moreover, if the range is between 30 to 60 points and breakout takes place, then there is plenty of room for the price to move strongly in the expected direction. This is the same situation when the trading range was in excess of 200 points, and we were sure about the price heading towards the right destination.

Longer Term Trades

Long term trades are always more reliable than the short term trades. Most of the traders are busy trying to get quick profits. However, it is quite a known fact that trading ranges are quite minor now a day’s for major pairs. Usually most of us are far much better off trading the four hour and daily charts. The overall trend, forex trading system uses the daily chart and the four hour chart for pinpointing entry and exit points.

This has worked marvelously for quite a long time, and there is nothing stopping forex from being more profitable in the upcoming years.

Making Money Is Simple

The major pairs will always confirm very well to technical analysis on these longer time frames. Overall it is a lot easier and quite efficient way to make money. You simply need to come up with a straight-forward trading system that can detect one or two high probability trading opportunities every week.
The crust of the whole scenario is that let the previous and bygones be left aside, there are still plenty of opportunities to make money from forex trading in 2011. This is true if you enjoy the bounty of trading the longer term charts. However, short term trading can also be fruitful despite the narrow trading ranges. We have to look a bit deep and find the right method, which leads to efficient trading.

The market isn’t getting any more efficient is the first warning essential for all future forex traders The fashion among retail investors these days is to trade foreign exchange Before the trend catches on to you as well, note the fact that the FX market is unpredictable now, making it impossible to capitalize the same as an easy money generator.To confirm the same the test of an efficient market, volatility ratios, can be done. Thank you for reading about foreign exchange and foreign exchange.




The process involved is basic. If markets are to be efficient, past price movements shouldn’t predict future movements, but this is just one of the conditions. For this scenario the rise in volatility is proportionate to the square root of time, hence the volatility of fortnightly change is the same as the square root of two multiplied by the weekly volatility.



If we test the volatility of actual to random walk, we can see whether a price follows random walk or not. A higher random walk volatility than actual volatility translates into falls in one period leading to rises in the eventual period.



The ratio of actual to random walk volaitility for three main exchange rates can be seen in my chart. The pound may rise for a few weeks but would fall because of reversion is the suggestion here Further your knowledge on foreign exchange at currency conversion calculator.



Nevertheless, the ratios touch one, as close as 12 percent of it. One could easily lose fortunes bettinf on the inefficiency since it is so little. The diminishing profit making became staple of Forex trading in the 1990s since investors started wising up to the momentum effects.



One can see deviations over a short period of time from the random walk. Anticipating surprises better than the market can lead to a person making money even from a random walk. Our data findings show a roughly random rate move for foreign exchange over a 17 year period. The efficiency of a market would be brought down in extremely short periods.



For traders, knowing news like the US dollar turning absolutlely worthless in an years time would be priceless. It would have been possible to make money by purchasing the dollar at its lower point because it over reacted and then mean reverted.



But this is not an inefficient market. The profits made from purchasing dollar at its low point aren’t risk free ones but instead a reward for taking the crash risk. The predominant character in exchange rates over the years is the variation in crash risk.



It is obvious that the