Forex Trader News

Despite of the earlier speculation of the Bank Negara Malaysia that it might increase the overnight policy rate (OPR), the ringgit closed at a higher rate as against the US dollar according to the forex reports isuued on the seventh of this month.

However, the central bank of the country, announced a hike in the Statutory Reserve Requirement Ratio (SRR) in the meeting of Monetary Policy Committee held today. The meeting announced that despite of the hike in SRR, the OPR managed to retain at the rate of 3 per cent. Previously this rate was set to 4 per cent.

On the first day of the ongoing week, the ringgit showed a rising trend and reached to 3.0070/0110 as against the dollar in comparison to the 3.0090/0120 close on Wednesday.

On the other side, the Malaysian Rating Corporation Bhd (MARC) announced that the conduct of monetary policy was estimated to be quite challenging in the latter half of the ongoing year in its economic outlook second half yearly repoert . The main reason as to why the results were not as expected and which made the monetary policy of the country complicated was the incoming of capital inflows in the country.

The report also emphasized that excess focus on interest rates may not be a good solution to the problem. The main factor is the vast credit expansion in the country which due to some reasons did not come out as expected.

In addition to the dollar, the rinngit also had a higher close against euro and pound sterling to 4.3030/3102 and 4.8052/8152 respectively.

A record increase in the foreign exchange reserve this week to help stablize the prices in Ramazan, which is going to start in the beginning of next month has been seen, analysts said.

Pakistan’s foreign exchange reserves have risen and settled at a range of $18 billion by the end of this week in comparison to the record level of $17.95 billion in the month of March this year.

This increase was supported by the $400 million multilateral loans from the World Bank ($192 million) and a $197 million loan from the Asian Development Bank

Improved forex reserves plays a vital role when the local currency is on an unexpected fall in spite of the increased outflows coupled with the constantly high double-digit inflation on one hand, but also meeting the high import demand when the prices of necessary commodities are headed towards the North on the other.

The inflow timings is very important for Pakistan, where during the holy month of Ramazan the prices experience a sudden jump and imports face a standby option for price rationalization.

Pakistan forex reserves were estimated at $17.5 billion in the current year, which is a 9% increase in every year, despite of the increase in the exports bill. The situation came into control as the prices of cotton and its products and a tremendous 25 per cent increase in the remittances which was over $11 billion.

Some more non-fundamental reasons for forex reserves to reach this level were the receipts from the Coalition Support Fund by US amounting to $633 million in the first month of the ongoing year. This reason backed up the surplus in the current account which was running in a deficit position for the past 7 years.

This week’s data from the Bangkok Sentral Pilipinas reported that the gross internaional reserves increased by 42% and settled at $68.997 billion at the end of June which was previously recorded at $48.704 billion in the same period last year.

This increase in the GIR figure has made the central bank of the country reconsider what it previously estimated of $70 billion till the end of this year in the forex reserves. The officials of BSP also reported that this figure might cross the targetded rate in the coming months of this year.

It has been estimated that the foreign reserves of the country, has set up a new record in the month of June, with robust situation of remittances to a mark of $70 billion.

The officials of the BSP further said that despite of unfavorable conditions of developments in the international market, the increasing demand of Filipino workers abroad made the level of remittances strong and steady. Another factor of this increase is the diversed foreign portfolio investment had a rise in the previous year and the trend continues this year. This increase was backed by strong economic growth of the country.

Data acquired from the cenntral bank also stated that present GIR amount is estimated to be 5.9 times of the debt maturing for duration of one year. This increase in the GIR will result in an increased credit ratings because it will represent that the country is capable of settling down its maturing obligations at its own.

According to a report of Weekly Statistical Supplement issued by the Reserve Bank of India this week, India’s FX market rosed $315.75 billion showing an increase of $6.695 billion. This $6.695 billion increase in the forex reserves is a 65 per cent raise in the cummulative amount of $10.229 billion of the FX reserves since the first day of April this year.

Previously, forex reserves showed a declining trend in the previous week which showed an amount of $309.020 billion which is a reduction of $1.542 billion in the forex reserves of India.

There are various factors which had a direct affect in this accretion of reserves and the main factor among all is the revaluation of the currency. The ongoing week in the forex market viewed an increase in the assets of the foreign currency to $283.458 billion which is a raise of $6.365 billion.

Furthermore, foreign currency assets in terms of US dollars is inclusive of depreciation or appreciation of the curriencies trading in the international market other than US dollars such as the yen, euro and pound sterling are held back in forex reserves.

News regarding these held reserves is that the currency value of euros has been increased as against the dollar this present week. It has gone to $1.421 when the week started and ended up at $1.447.

Moreover, the forex reserve position of the country rose to $2.975 which is a raise of $2 million at the International Monetary Fund. The Gold reserves also saw an increase and rose by $227 million to $24.668 billion.

Trading in currencies is not an easy game and requires lots of homework and technology to stay in the race. Following this theme a survey was conducted to detect the possible reasons of loss at forex according to traders. The unanimous reply was in favor to the lack of market analysis techniques other than more possible reasons. The survey reveals that majority of people think they have faced failure in the game because either they don’t have enough techniques to watch the market or there are no such automated services that can provide the probable data. They believe that there should be some specialized techniques by which they can quickly ascertain what is going on or what will happen in forex market. There were other options such as lack of trading systems, lack of correct approach, expectations above reality and so on incorporated in the survey that received limited nods.

As far as market analysis is concerned they recognize its importance in the profits or gains made in forex and hence demand improvement in this section to have more successful trading. At present there is a system known as support and resistance that provide hints to the trader about market and thereby helps the investor to take wise decisions. Still, according to people this system only points the direction where the market will be going which is not sufficient along with the hints given which are many times not cognizable for users. They are of huge favor to built strong support system that will help them in this direction.

A new definition of co-relation of trend and economy has been developed in forex market that states the investor’s behavior towards investments. Trend generally sets in when a group of investors overcome others in selling or buying. This trend is closely followed by each investor in order to make profits from the business. The second important factor of forex market is the economy of that area or part of the world. The analysts of this market have stated the new definition for its relation which states that trend is directly proportional to the current economic condition. They further illustrate that, as the economy of the country changes so is the change observed in trend of the market.

Trend is generally followed to acknowledge current market positions which are also the insignia of the economic growth of that particular country. it is also widely observed that as the economic condition changes or if certain big decisions are due, there are alterations in forex trade and it all directly affects the decisions taken from the consumers. It is understandable that consumers will follow the rising economy which will then make due impact on market trend which is made by investors itself. It is also observed that job or employment related decisions greatly alter the trend as it is going to alter countries economy so it can work in opposite direction too. Basically their point to formulate this definition is to advise people to follow the trend is they want to experiences highs in the market.

USD was facing very bad days recently and was dominated by other currencies like euro and all. This was facing a looming danger on the position of dollar in market but with the news of job reports making rounds in the market, the dollar finally regains its position to great extent. Many people think it is magic that brings back the dollar to the position but the actual reason is different. The government has decided to announce its report on private sectors jobs soon which was sufficient to develop the confidence of many investors in the currency. The connection of jobs is directly linked to the economy of the country and with impending reports on job people already have started guessing the decrease in unemployment. This will laterally affect the economy which will strengthen after the account and the investors will get benefit by getting in US dollar investments. Even with the high it is still struggling with other powerful currencies such as sterling and others.

The analysts are expecting more rises in the value of dollar due to the recent attraction created by the job report. It many help the currency to stabilize its position a bit as opposite to euro that is still struggling in the market. The increase in private section jobs is the welcome change for all the investors and they are still hoping for the best to wait for the aftereffects of this new happening. There are some concerns that are encircling dollars position in market regarding its stability and value.

You may have heard about the current scheme that invites the beginner in forex trading to start the business without holding any money to the company. This system is made to make the investor his first start without having to pay any money to the trading company. Even though it sounds good, sources found that this bonus system contains some lacking. It is been found that this system will let the consumer earn a lot without dwelling a penny to the traders but later on faces loss when he is been asked to make the deposit. It is not true in all the cases but mainly some investors were found to be paying lot more that they have earned.

Before enrolling anybody, the company asks them to do some requirements in the form of money or some other contracts and when the person starts earning he has been asked to pay for several reasons. The worst case happens when the consumer fails to make it large in the trading and looses out whatever he has previously. This has been found out by sources that such cases are on more high that others where the person makes some benefit out of forex trading. Even though the offer seems alluring but it poses some dangers behind that needs to be foreseen by the investor. It is also found that the companies that hold such schemes cannot be blamed later on as they have provided initial support to the investor.

Going by the nature of avoiding dangerous transactions, some unknown source spread the false word about job reductions in certain company of United States. As soon as this news was flashed on, many investors declined from investing in dollar and other currencies to stir the market. This all started with fake account of certain company that showcased great reductions in hiring new employees. This actually showed mirror to many analysts that people completely detain from taking any slightest sort of risk when it comes to forex trading. This unsettling news was cleared later on to stabilize the matter for a bit.

Source of this unhealthy news is still unknown and now analysts are working on ways to prevent this from happening in future. They also think that government needs to think on ways that will attract attention of investors I the particular currency. They also indicate that strong interpersonal bond should be constructed between investors and the governments in order to prevent recurrence of same mishap. The currency that was badly affected by this rumor was the US dollar that was already facing troubles from long time. Other potential currencies do not show marked decrease as compared to the USD. To strengthen its position, government has planned to launch new and correct report on jobs that is going to be showcased soon. Analysts also expect better development in allied currencies after the declaration of this report. They are positive on the position of euro that has plummeted recently to gain by the correct job report.

European equities trimmed their starting gains to the fore of the U.S Labour Department’s extensively looked forward to monthly employment report. The European currency showed strength in the Asian trading market subsequent to when the European Central Bank raised its yardstick interest rate by 25 basis points to 1.5 percent as anticipated and indicated for further monetary tightening.

The employment status of the US got better and in June, there was a decline reported in terms if the initial claims if unemployment as the week ended dated, July 2. Furthermore, a healthy sales report encouraged a positive outlook as the country added twice as many workers as forecast in June.

The latest ADP National Employment Report reveals that private employment hot up by 157000 jobs in June, subsequent to which came a revised augment of 36,000 jobs in May, which clearly suggested U.S. economic recuperation, which was destroyed and came tumbling down in spring.

The euro climbed to a 2-day high of 1.2171 against the Swiss franc around 3:20 am ET shed almost 50 pips shortly to reach as low as 1.2126 around 4:00 am ET. The euro-franc pair is presently worth near Thursday’s closing value of 1.2128. Furthermore, The Bank of England didn’t touch its chief interest rate at momentous low of 0.5% again as projected and managed the amount of the quantitative lessening at 200 billion GBP.