Forex Trader News

Analysts and the forex experts have been predicting the easing of the dollar against the other major currencies after Bernanke’s testimony and as predicted US Dollar Tumbles after Bernanke Testimony before the lawmakers in Washington, came to an end. Bernanke has admitted that the U.S. Economy is still to pick up momentum and if required, the Federal Reserve might look at option to re start the asset purchasing in order to kick start the consumer sales and growth. Fed supported quite a few entities funds that couldn’t weather the Economic meltdown in 2008, by buying their assets and pumping in funds.

As soon as the news regarding the easing of monetary policy started getting out, the dollar started to weaken against all the other major currencies. Against the British pound and the Euro, US Dollar Tumbles after Bernanke Testimony. As the forex trading opened on Wednesday, U.S Dollar lost 1.15% against the Euro and stood at 1.4137. One more reason for the Euro’s increase against the dollar is the strong GDP figures for the second quarter released by China. There were apprehensions that the Euro crisis will have an impact on the china’s GDP. But as it turned out, it didn’t have an impact and the Euro strengthened its position against the dollar. Also the British Pound strengthened by .81% to 1.6042 during the early hours of the trading

Even against the Japanese Yen and the Swiss Franc, US Dollar Tumbles after Bernanke Testimony. U.S Dollar fell by .1% against the yen, while it fell by .75% against the Swiss Franc. The dollar index, which is a measure of the performance of the dollar against the 6 other major currencies also fell by 1%. Bernanke had cautioned the policy makers against expecting robust U.S. Economic growth in the immediate future. He also added that the Unemployment levels have come done only marginally and still there is a lot of work to be done on that front.

The euro rose against the pound on Wednesday after Greece approved measures needed to avoid a default, but questions, as whether Italy and Spain could contain their sovereign debt, capped the Euro gain. The jump was ignited from a one month low, giving the Euro a little momentum before possibly reaching its resistance. The Euro pushed to a two week high of 0.8844 against the pound on the morning trading platform, gaining .064% by the end of the session. The two currencies could find support at $ 0.8844, from the June 16 low, with resistance at 0.8891, the high from Monday. The Euro could find some support from interest rate differentials, as the European Central Bank is widely expected to raise rates in early July.

Debt ratings in Ireland fell to junk status, after Moody’s downgraded the country’s rating. Ireland followed Portugal and Greece in current bond rating downgrades. The European Union and International Monetary Fund have insisted that Greece pass legislation before disbursement of next of a 12 billion bailout program rescue. European finance ministers will meet on Friday to discuss and approve Greece’s rescue and funding options. Some ministers recognized earlier this week that to construct stronger debt groundwork, some form of Greek default may be required. Policymakers also established that Spain and Italy would need to be closely monitored and emergency measures would be needed to prevent disruptions in financial markets.

Unemployment reports on Wednesday from the UK reported that worker claims jumped higher from last two years. The UK added 24,500 jobless claims, more than what financial analysts across the globe expected. However, the UK’s 7.7% jobless rate expectation remained unmoved. Presently, the pound steeply has risen 0.25% versus the fragile U.S. dollar, hitting 1.5951.U.K. average earnings also increased slightly at 2.3%, rising from second quarter figures, which were slightly higher than 2.1% analysts’ forecasts

USD/CAD hits 3-day low as the Canadian dollar rose sharply against the U.S. Dollar on the back of the news coming from China that their GDF has increased by 9.5% in the last quarter. Most of the Economies were keenly following the earlier reports that the growth in China might slow down. Financial Experts were of the opinion that the slowdown in China might affect the risk appetite of the many economies including Canada. But with this data, Canadian Investors are likely to increase their risk appetite. During the morning U.S.Trade on 07/13/2011, USD/CAD hit .9600 before settling down to .9622. The overall drop in the U.S dollar was around .45%.

Another report shows that the industrial production in China went up by 15.1% in June. This is the best month for China in terms of industrial production since May 2010. One more reason for the Canadian dollar strengthening against the U.S.Dollar is the rise in the crude oil price to $97.96, which is a three day high on the New York Mercantile Exchange. As the USD/CAD hits 3-day low, there was another concern regarding the U.S. dollar that it might still weaken, as Ben Bernanke was supposed to appear before the law makers to provide testimony for the poor performance of the U.S.Economy inspite of the stimulus packages introduced by the Federal Reserve.

As far as Canada is concerned, raw materials and oil are one of their top 2 exports to different countries. With respect to the performance of the Canadian Dollar against the Euro, Euro becomes stronger by another .2%, again because of the news from China. As the USD/CAD hits 3-day low, the Euro hit a high of 1.3539 against the Canadian Dollar. Among all these currency movements, there is also a report that the U.S.Import prices are coming down, at a time when the country gears up to take an Inventory on the existing crude oil and publish the findings.

According to Bureau of Labor Statistics, total payroll jobs added were down at 18,000 with 57,000 in private sector. Moreover, increase in unemployment by 0.1% with total employed remains lowest at around 58%, lowest since beginning of recession along with weekly working hours slid to around 34 hours along with hourly earnings. However, alternate labor under-utilization measurement called U-6, which includes both part-time and marginal workers showed a marginal increase of around 16%, since this year. As per forex summary for week ending July 8th, Europe is still reeling under recession, as debt-ridden countries like Greece, Italy, Portugal etc, raised their government bond yields and more results are on way to see how banks would respond to these.

On other hand, Reis in its second quarter report show decline in apartment occupancy rates, office occupancy rates at horizontal level, and malls with increased occupancy rates. As per forex summary for week ending July 8th, graphs represents about highest percentage of job losses since post World War II recession, show steady decline in job offers since economic recession started in 2007, at maximum level since World War II. First graphical representation regarding employed population ratio, participation and unemployment rate show increased unemployment rate at 9.2%, labor participation at 64.1%, lowest since 1980s’, along with employment population ratio declined to lowest level at 58.2%, since recession.

Besides, second graphical representation about employment rate for part-time jobs show rising trend at 8.5 million during same period with alternate measurement of labor under-utilization called U-6 increased marginally to 16.2%, showing a modest growth of 0.4%, since end of last year. Third graphical representation show duration of unemployment as percentage of total labor force in four weekly categories like less than 5 weeks, 6-14 weeks, 15-26 weeks, and 27 weeks and above. 27 weeks and above category has risen for two months consecutively at 4.1%, along with increase in less than 5 weeks category. On other hand, graphical data from Institute of Supply Management in June show modest growth of non-manufacturing index at 1.4%, along with modest increase in employment diffusion at 0.1%, as per forex summary for week ending July 8th. Graphical data from Reis show office vacancy rates show modest increase of 0.1% since last quarter in 2010. Apartment vacancy rates show decline of 0.2% since beginning of this year, though this is higher compared to last two years. However, mall vacancy rates have risen by 0.2% along with retail areas at 0.1%, a record set twenty years back.

The U.S. employments improved that led to the weakening of the Swiss franc, and henceforth, led to a decrease in the demand for the currency which was thought to be out of harm’s way.

The US employers increased the number of their workers by about 157,000 in June, on a seasonally accustomed root. This was a lot higher than the estimated increase of 67,000 jobs and a hefty amount of improvement was recorded from the May change of 36,000. This led to a decrease in the demand of secure currencies as President of the European Central BankJean-Claude Trichet indicated that he may lift up the interest rates once more in the prospective months subsequent to when he increased the main rate by 25 basis points.

The USD rose and was traded at around 0.8 today. The EUR rose as well with a difference of 0.0112. However, the JPY fell. Therefore, Swiss Franc fell down in comparison of the most traded currencies as a consequence of the recovery for the global economy and a declined demand for assets and currencies that were safe.

The head of the strategies of foreign exchange, at Commerzbank AG, Ulrich Leuchtmann, viewed his opinion in terms of the recent fall of Franc by saying that the Swissie was a good currency especially if fleeing Europe was your choice. The short term risks once abated will unwound the shift. There will a weaker Swissie then.

According to forex dealers, the US dollar has shown a decreasing trend against the Taiwan dollar this Friday by lowering down to NT$0.065 to be closed on NT$28.795. This is said to be the result of the strenght that most of the Asian currecies are holding presently.

The losses incurred to the US unit against the Taiwanese counterpart were backed up with the reason that these losses were partially recouped by the intervention of the central bank of the country in the late trade in order to deaccelerate the appreciation of the local currency and maintain the country’s global competitiveness.

The dealers also added that the decreasing trend of the US dollar was highlighted as soon as the Taiwanese FX market opened which was longed by the increasing current account surplus.

The dealers also reported that this increase in the value of Taiwanese dollar is being backed up by the Chinese yuan which is expected to continue to increase the interest rates so as to fight against the inflation problem.

Moreover, the gains achieved on the local bourse in the early trading in the forex market also forced pressure on the US dollar to decrease, but the situation eased a bit after the index fell back on the FX market.

The weighted index rate closed at 0.27 per cent ending at 8,749.55 points on one hand and by having the foreign institutional investors selling out about NT$1.72 billion or US$59.73 million on the other. Moreover, the total turnover of the trading session amounted to US$739 million.

Forex reserves in Karachi have jumped up to the highest point and had settled itself at an amount over $18 billion basically from the support of multilateral loans obtained from the Asian Development Bank and World Bank amounting to $400 million.

The core level of reserves in the country stands at a range of $11 billion which are quite low than the reserve levels that touched a level of $12.6 billion in the fiscal year 2005. These calculations of the forex reserves are provided with the subtraction of the loan obtained from the IMF.

Since, 2006, the forex reserves is showing a constant growth of 7% per year but for the past three years this rate has been increased to a rate of 18%.

The reason for this growth in the Forex reserves can be attributed to the standby loan option of the International Monetary Fund amounting to $11 billion which were given to the country in the fiscal year of 2009. These standby loans were the aftermath of the five tranches that aggregated to $7 billion or a slightly over this amount. This information was provided by the research note of the investCap here this week.

In regards of the present fiscal year, the Forex reserves of Pakistan have showed a gain of 9% raising the reserves to $17.5 billion amid the rising export situation and foreign remittances of above $11 billion.

As a result of these circumstances, the Rupee showed a 0.5 per cent declining trend against the USD which caused a surplus in the current account of the country after being deficit for a period of seven years.

What started with 10 paisa hike now has landed to all time high in the value of one rupee against US dollar. It was evident that the growth of its value will be slow but this came as a shock to investors when rupee was seen immensely growing in the first week of second month.  It came as a covering relief to all the importers that are planning to take advantage of this new growth in value of rupee. The position of rupee is still weak as far as equities are concerned but many retailers were interested in selling off US dollar with this high rate of rupees. Apart from dollar it was seen stable against several other leading currencies that were frontrunners of the race.

It is estimated that the rise started with four paisa previous week where from then it raised to much more than the hike observed in past two to three months.  The new growth in the value can be attributed to the inflow of funds from outside and good profit at market. The analysts are also suggesting that this step was reached after careful observation of transactions and positions of several currencies in global market. They are also confident on withstanding more rises in the value of rupee in coming month or two which will give great opportunity to the banks to sell the US dollars with profit due to the inflowing funds. This rise is also attributed as riding crude prices that affected the dollar to great extent. Any reason given but it is true that value of rupee is steadily increasing opposite to the failure in equity sector.

In a recent survey of people involved in trading foreign currencies it has been discovered that the investors name forex trading as a gamblers game. This opinion is formed due to high risk involved in the business while offering high profits at the same time. It is seen that even after total wipe out of their trading account they start with a new enthusiasm only to seek benefit from the same. As it is known to all forex is the prevalent financial market in world that observes turnover that reaches up to several trillions per day. Neglecting the high risk, more and more traders are investing in this market to get substantial gains. When asked about the risk involved, majority traders were observed to have ignoring attitude which completely takes over their optimism.

The online materials for guidelines have prompted more and more people to enter this trade which is stable from the upheaval of stock market. Another factor for this involvement was attributed to the low basic investments required to settle account in the banks. Major banks keep mere fees for the creating and holding a Forex account where they themselves are seen promoting people to enter their platform. Allured by the substantial gains in fewer investments, people from all sectors are entering the market to test their luck. They measure it same to the gambling where big gains can be earned in least investments. Even though this scenario is prevalent, some understanding groups are avoiding currency trading at this stage when the market is vulnerable due to current political happenings.

You might be foreign to the new term forex trading robots that is making rounds of the market due to its unusual working capacity and ease of operation. These trading robots are nothing but online software’s that manage the forex trading of the user according to his choices. This is a step ahead in new technologies that are built to help the traders in this complex business. This service is designated for anyone interested in online forex trading and eligible for the same. To get the system working, the user has to open an account with online brokers (there are many) then these software’s are harbored on their websites which can be downloaded by the trader to get atomized help in currency trading. This system even though seems promising hold some advantages and drawbacks for the user.

This system works on behalf of the person where the software after understanding market situations will make some trading decisions for you. These are also governed by enormous management skills and calculations techniques that enable the robot to calculate and analyze faster than the trader. This software is previously programmed to cater every trading need of the investor and take decisions for his betterment. They also carry robot perfection in transaction which eliminates natural human error in the transactions. Overall, they work in similar fashion to that of your personal agents work and claim to bring more productivity in all transactions. Even though they have many exceptions features but analyst warns people of potential losses that can occur with the use of these robots.