US Dollar hits nine month low against Euro

LONDON (UK): The dollar fell to the lowest levels for months against the euro and the yen on Friday as upbeat economic data reduced demand for the safe-haven greenback, dealers said.

The euro rose to a near nine-month high of 1.4627 dollars in early London trading. The dollar dropped to 90.98 yen - the lowest level since mid-February.

In later London trade, the European single currency stood at 1.4591 dollars compared with 1.4583 dollars in New York late on Thursday.
Against the Japanese currency, the dollar fell to 91.04 yen from 91.74 yen on Thursday.

Gold headed back towards 1,000 dollars an ounce as the weak US unit made the metal cheaper for buyers holding rival currencies, pushing up demand, dealers said.

"The dollar continues to move lower setting a new low for the year against the euro... while the dollar has fallen more sharply against the yen," said Derek Halpenny, European head of global currency research at The Bank of Tokyo-Mitsubishi UFJ in London.

"Risk appetite has been supported by mostly positive economic data from China," he added.

Chinese economic numbers fuelled dollar weakness on Friday and investor risk appetite, underlining hopes of a global economic recovery, said Rabobank International economist Jeremy Stretch.

China said industrial activity expanded by 12.3 percent last month and retail sales jumped 15.4 percent, while urban fixed asset investment rose 33 percent in January-August due to massive government spending on construction.

Traders snapped up the currencies of countries exporting commodities to the Asian powerhouse, notably the Australian dollar.

In contrast to the upbeat Chinese data, Japan revised down its estimate of second-quarter growth to 0.6 percent, from an initial estimate of 0.9 percent.

Most analysts meanwhile expect the dollar to weaken further amid a growing sense that recovery from the worst global economic crisis in decades is taking root. With the economic outlook brightening, traders tend to shun the dollar in favor of riskier currencies that appeared more profitable, like the euro.

Elsewhere, the British pound strengthened after the Bank of England on Thursday left its monetary policy unchanged, holding its key lending rate at a record low 0.5 percent and maintaining emergency stimulus measures to prevent the economy from sliding deeper into recession.

In London on Friday, the euro was changing hands at 1.4591 dollars against 1.4583 dollars late on Thursday, at 132.89 yen (133.81), 0.8747 pounds (0.8756) and 1.5148 Swiss francs (1.5141).

The dollar stood at 91.04 yen (91.74) and 1.0380 Swiss francs (1.0381).
The pound was at 1.6687 dollars (1.6651).

On the London Bullion Market, the price of gold jumped to 998.88 dollars an ounce from 990.75 dollars an ounce late on Thursday.

WHY FOREX TRADING ?

There are some huge advantages in trading the forex markets vs. futures or stock markets. First, with the forex you get 24 hour liquidity, and as noted above, these are the most liquid markets available anywhere.

Second, with most trading platforms you get free real time quotes and charts. Also, because there is no centralized market location or exchange such as with stocks or futures, there are no exchange fees to pay.

Another very comforting advantage that forex trading has over futures and stocks is that there is no debit risk. That's because if a client were to be in an open loss position that exceeded his margin requirement, the trading platform will automatically liquidate the position.

If there was a catastrophic event, you can never lose more money that what you have in your account.

And how about this - if you choose to trade the forex markets on your own, there are no commission charges! There is just the bid and ask spread (as in any market) for the market makers, with the difference being that in the forex markets these bid/ask spreads are very small.

Something to also consider is that in trading with most broker dealers, you get more consistent pricing options. Not so in either the stock or futures markets, where the slippage can be substantial. Furthermore, please note that in the forex markets, we can sell short the market just as easily as buying. It makes absolutely no difference - they're both executed at just the click of a button. Because the margin requirements are extremely small, tremendous leverage is available. These 2 factors of leverage and easy risk control are what make the forex markets such a great opportunity. Please remember that without proper risk management, this high degree of leverage can lead to large losses as well as gains.

If you've every had any experience trading stocks or commodities, you know that these above-noted differences are very, very significant.

The above information should give you a good idea as to what the forex markets are. However to trade profitably, you need to learn how to properly analyze the markets so that you can achieve consistent success. In my opinion, the Peter Bain ForexMentor course is second to none and is definitely worth the time to explore further.

USD Drifts Lower on Mixed Data

The major currencies were mixed in the Thursday session as US equities edged up marginally into positive territory, following a sharp rebound in the Shanghai Composite – which rallied by 4.52% overnight. The dollar eased lower against the euro and pound but largely remained confined within its recent range while the yen also relinquished some of its recent strength.

The Philadelphia Fed manufacturing index improved by more than forecast in August, expanding to a reading of 4.2 and beating estimates for an improvement to -2.0 from -7.0 in July. Meanwhile, the leading economic indicators index fell short of consensus forecasts for an unchanged monthly reading at 0.7%, instead slipping to 0.6%. Weekly jobless claims were also slightly higher than the prior week, edging up to 576k from 558k previously.

The economic calendar for Friday is light, with just the release of existing home sales due out at 8:30 AM. Existing home sales are seen increasing by 2.3% to 4.99 million units in July, versus 4.89 million units a month earlier.

FOREX History

On FOREX markets buying and selling currency is made on a speculative basis by most traders. It is the same like stock market, when traders buy (stocks) currencies holding to get stronger and sell when will get weaker. Most of this trading is doing by investment companies, hedge fund, banks and brokerages. In last couple years the currency trading became open for individual investor with small financial steak. Companies use the currency market for purchasing some amount of foreign currency for there obligations and commitments with other international companies.

The short retrospective for foreign exchange market life will be:

Currency markets were relatively quite until World War 1. Speculation ever made was unknown and was with negative sentiment by institutions. After war ending foreign exchange markets became volatile and shows the first signs of speculative activity, but any further changes and progress was interrupt with great depression. The forex markets were quiet and stable during World War II, when the market started with many important changes and improvements.

Popular pairs in Forex

Without a doubt the EUR/USD and GBP/USD, as currency pairs, receive a great deal of attention by online Forex traders.

Each provides tradable patterns almost every day. Why some traders prefer trading one of these pairs versus the other is almost a matter of personal preference. Both pairs will reflect global sentiment regarding the dollar. As a result, it is usually the case that they will share the same trend patterns.

If world reaction to economic news is positive for the US economy, as a general rule, both the Euro and the GBP will tend to weaken. The chart below, for example, shows how the EUR/USD and the GBP have moved on the 1 hour pattern. Notice how similar the patterns are. The hour charts below show that both pairs provided a similar reaction to the Nov 4th economic release of the non-farm payroll report.

Clearly, it is hard to develop an argument of which pair is better to trade. But there is more that the online Forex trader can do with these pairs. online Forex traders can generate totally new trading opportunities by dropping the US dollar component of the pair and, thereby, creating a Cross-pair known as the EUR/GBP Before we take a look at the EUR/GBP chart, let’s try to understand what makes this pair a good source of trades, particularly, in the coming year.

The best way to understanding this Cross-pair is to realize that it generates a picture of the battle between two different economies- the EU vs. the British economy.
The EU countries experience different levels of economic growth and expectations of growth than that of Great Britain.

As a result, there is a constant flow back and forth of capital between these regions and this flow results in frequent range like behavior and price swings as can be seen in the day chart below.

STARTING FOREX TRADING

The best and most efficient way for the traders to make money is through the internet in the Forex Trading by using the online forex trading system. The forex market is the most liquid trading market and an unpredictable market in the world. But still this forex market is the best for expert traders to amass huge profits. But it doesn’t mean that a trader should be an expert to make profits in the forex markets, it is enough if he knows the basics of forex trading and a little common sense along with the knowledge of the present economy of the countries world wide. Getting started with forex has become easy, due to the advances in technology.
1. The first and foremost aspect is that a person who wants to do forex trading should choose a good Forex Broker, the forex broker should help the forex trader to have a practice account, great customer support, good charting packages and news feeds. To analyze the forex brokers, there is a report called CFD FX REPORT which reviews forex brokers and give its rankings.
2. The second aspect is that, the forex trader must fund and deposit money in his newly acquired account. Due to modernity, these days many Forex Broker Platforms make it very easy for transactions, the trader can deposit via Credit Card, direct debit, check. It is always recommended by most advisors to start with only little amount of money and after a little experiences the forex trader can increase his leverage rates later.
3. The third step is the forex broker should help to move in the right direction that suits the trader’s trading style. There are several quality Free forex charts available to indicate the trend and also there are many sites that update the Fx Rates everyday. It is important to use them regularly.

U.S. DOLLAR: WILL THE G20 MEETING SPARK FIREWORKS?

The better than expected non-farm payrolls report lived up to its reputation of triggering sharp volatility in the foreign exchange market. The U.S. dollar initially sold when traders saw the sharp increase in the unemployment rate but then recovered aggressively when everyone realized that the smaller drop in payrolls made the overall report more positive than negative. When the U.S. equity market opened an hour later, dollar strength began to fade as risk appetite took over. When the dust settled, the improvement in the NFP report proved to be more risk positive than dollar positive and eventually drove the AUD/USD above 85 cents to a new yearly high.

Introduction to Trading Forex

Foreign Exchange

This short introduction explains the basics of trading Forex online, a brief explanation of the markets and the major benefits of trading Forexonline. There are also two scenarios describing the implications of trading in a bear as well as a bull market to better acquaint you with some of the risksand opportunities of the largest and most liquid market in the world.

As an additional aid for those who are new to Forex, there is also a glossary at the bottom of this text which explains some of the terms used in connection with currency trading.

Overview

Foreign exchange, Forex or just FX are all terms used to describe the trading of the world's many currencies. The Forex market is the largest market in the world, with trades amounting to more than USD 3 trillion every day. Most Forex trading is speculative, with only a low percentage of market activity representing governments' and companies' fundamental currency conversion needs.

Unlike trading on the stock market, the Forex market is not conducted by a central exchange, but on the “interbank” market, which is thought of as an OTC (over the counter) market. Trading takes place directly between the two counterparts necessary to make a trade, whether over the telephone or on electronic networks all over the world. The main centres for trading are Sydney, Tokyo, London, Frankfurt and New York. This worldwide distribution of trading centres means that the Forex market is a 24-hour market.

Trading Forex

A currency trade is the simultaneous buying of one currency and selling of another one. The currency combination used in the trade is called a cross (for example, the euro/US dollar, or the GB pound/Japanese yen.). The most commonly traded currencies are the so-called “majors” – EURUSD, USDJPY, USDCHF and GBPUSD.

The most important Forex market is the spot market as it has the largest volume. The market is called the spot market because trades are settled immediately, or “on the spot”. In practice this means two banking days.