EUR/USD Consolidates above 10/13 Lows

The EUR/USD has undergone encouraging consolidation along what is now our 3^rd tier uptrend line. Present consolidation comes with a sigh of relief considering the extent of the selloff in the EUR/USD thus far this week. Investors are encouraged by the better than expected Core DGO data even though the headline figure printed shallow by two basis points. Since the EU’s economy relies heavily upon manufacturing, the solid Core DGO number signals that export demand from the U.S. may be stable. However, investors are still cautious since equity markets have been behaving unfavorably lately. The S&P futures have drifted below our important 1^st tier uptrend line, and are presently testing the patience of the psychological 1050 level. Any extended weakness in the S&P would likely drag the EUR/USD lower due to their positive correlation. Therefore, investors should keep a close eye on U.S. equities over the next 24-48 hours and monitor their interaction with our technicals in reaction to key economic data. The U.S. will release its Advance GDP tomorrow, and this data will likely be a market mover. A disappointing GDP number would likely send U.S. equities lower and investors towards the Dollar for safety, and vice versa.

In addition to tomorrow’s U.S. Advance GDP number, the EU will release German Unemployment Change data. Analysts are expecting an increase to 17k, likely due to the negatively mixed German PMI data as of late. The ECB has been quite these days, and the central bank is probably waiting to see how the next set of important econ data fares. Furthermore, the ECB should be happy that the EUR/USD has lost roughly 250 basis points from October highs. The pullback in the EUR/USD gives the ECB a little breathing room since the rapid appreciation of the Euro was beginning to squeeze EU exporters. Meanwhile, focus should remain on the U.S. since EU data will be relatively light until Friday’s Unemployment Rate and CPI Flash Estimate releases.

Technically speaking, the sharp movement below the psychological 1.50 level is a discouraging sign for bulls. However, there remain several uptrend lines we can form, meaning the EUR/USD has a few technical cushions to rely upon before investors can safely cry bear. Our new 1^st tier uptrend line should gauge whether the EUR/USD is bound to retreat towards previous October lows and the psychological 1.45 level. As for the topside, the EUR/USD now has multiple uptrend lines bearing down on price and the psychological 1.50 level becomes a technical barrier once again. Overall, although the uptrend remains intact, investors should tread carefully since U.S. equities are facing headwinds.

Present Price: 1.4797

Resistances: 1.4819, 1.4844, 1.4863, 1.4890, 1.4925

Supports: 1.4783, 1.4764, 1.4727, 1.4700, 1.4671, 1.4638

Psychological: 1.50, 1.45

Source: http://www.fx-bar.com

Pound Extend Gains on Retail Sales

Speculations that retail sales would post another month of gains were confirmed providing support for the pound to regain terrain versus the euro and several other currencies, changing the negative outlook for the British currency to a better trajectory.

The pound gained versus most of 16 traded currencies as retail sales in the U.K. touched the highest level in 2 years in October, bringing confidence back towards pound-priced assets, after rather turbulent weeks that shunned away investors from the British currency in foreign-exchange markets.

EUR/GBP traded at 0.9039 as of 21:36 GMT from a previous rate of 0.9118 in the intraday.

If you want to comment on the Great Britain pound’s recent action or have any questions regarding this currency, please, feel free to reply below.

Source: http://www.topforexnews.com

Yen Trading Higher as Stocks Tumble

The Japanese currency ranked among the best performers in currency markets after several days of losses as stocks declined worldwide, attracting traders to the safety provided by yen-priced assets, and favoring also safer bets in financial markets globally.

The South Korean won was one of the biggest losers versus the yen after climbing sharply due to a report showing a significant quarterly growth for the Asian emergent nation, in a movement that can be understood as a correction by traders. One of the biggest winners today, but still losing against the Japanese currency was the Australian dollar, that benefited from side effects of a Chinese official statement suggesting that industrial production is growing massively in the country, which is good for the South Pacific nation since Australia is a major provider of commodities to China. The Swedish krona also lost significantly versus the yen as the country is still suffering from central bank statements last week that affirmed that interest rates will remain low until next year.

Most analysts concord that financial markets are having a moment of correction this week after stocks and higher-yielding currencies touched the highest levels in 2009 last week. Even if this Tuesday is producing rather negative numbers, most of traders are still expecting gains in riskier assets towards the end of the year.

EUR/JPY traded at 136.47 as of 14:00 GMT from a previous rate of 138.49 in the intraday. GBP/JPY traded near stability at 150.35.

If you want to comment on the Japanese yen’s recent action or have any questions regarding this currency, please, feel free to reply below.

Source: http://www.topforexnews.com

Australian Dollar Outlook Remains Bullish on Interest Rate Expectations

The Australian dollar rose to a fresh yearly high of 0.9326 against the greenback and the higher-yielding currency may continue to appreciate going into the following month as investors speculate the Reserve Bank of Australia to tighten policy throughout the second-half of the year. Credit Suisse overnight index swaps shows market participants are pricing a 131% chance for a 25bp rate hike in November and expect the central bank to raise borrowing costs by more than 200bp over the next 12-months, and the Aussie may continue to retrace the sell-off from the previous year as policy makers hold and improved outlook for the economy.

The Reserve Bank of Australia Minutes said that the “very expansionary setting of policy was no longer necessary” as the $1T economy skirts the global recession, and went onto say that it may be “imprudent” for the central bank to hold the interest rate at the 49-year low as policy makers maintain their dual mandate to ensure price stability while fostering full-employment. Moreover, the central bank held a hawkish tone and said keeping borrowing costs at “very low levels” could raise the risks for inflation, and said that the “trough in inflation was significantly higher than earlier thought.” Moreover, RBA Assistant Governor Philip Lowe stated that the rebound in economic activity would “gradually lead to a normalization of interest rates,” and said that the country is likely to have “a higher average exchange rate than we’ve had over the past couple of decades.” However, the central bank expects the marked appreciation in the Australian dollar to temper the risks for inflation, and the central bank may adopt a wait-and-see approach over the remainder of the year as the outlook for global growth remains uncertain.

Nevertheless, the economic docket for the following week is likely to spark increased volatility for the Australian dollar and may drag on the exchange rate as market participants anticipate price pressures to weaken further in the second-half of the year. Economists forecast consumer prices to grow at an annual pace of 1.2% in the third quarter after rising 1.5% during the three-months through June, while producer prices are project to fall to an annualized rate of 0.5% from 2.1% in the second-quarter. At the same time, private-sector credit is anticipated to increase 0.2% in September following the 0.1% rise in the previous month, while bank lending is expected to grow at an annualized pace of 2.0% from the previous year. As a result, the slew of mixed data may leave the AUD/USD confined in a narrow range as investors weigh the outlook for future policy but nevertheless, as risk trends continue to dictate price action in the currency market, a rise in risk appetite may lead the high-yielding currency to hold above 0.9300 over the following week. - DS

Source: dailyfx.com

Japanese Yen on Pace for Further Losses Against Euro, US Dollar

The Japanese Yen fell against major forex counterparts for the third week in a row, slipping further on outperformance across key risky asset classes. Yet the 20-day correlation between the US Dollar/Japanese Yen pair and S&P 500 actually turned negative for only the second time in two years—emphasizing ongoing shifts in FX market dynamics. The Yen has long been the go-to currency during times of market stress and, by extension, the first to fall through financial market booms. As the lowest-yielding currency in the industrialized world, investors aggressively borrowed JPY to fund investments in sources of higher income. More recently however, the US Dollar has taken the dubious honor of the cheapest currency to borrow across global financial markets. The surprising shift goes a long way in explaining the USDJPY pair’s inverse correlation to key risky assets, and it will likely remain a major factor for the Japanese Yen through the foreseeable future.

Week in and week out, we have repeated that financial market risk sentiment and the trajectory of the S&P 500 would be the major determinant of USDJPY price action. Of course, the substantive shift in risk correlations would suggest USDJPY moves may depend on other fundamental factors. Against other counterparts, the Yen’s continued losses show little investor interest in buying and holding the low-yielding currency. Given its extraordinarily low yield, holding Japanese Yen is an expensive proposition; the trader must pay higher interest rates to receive paltry JPY yields.

A cursory look at a Yen chart will show you that the currency will tend to lose more often than it gains—except to note that its rallies are far sharper than its declines. That is to say, FX traders avoid buying Yen unless they absolutely have to. And when they are forced to cover JPY short positions, they typically do so in a hurry. Given these JPY trading dynamics, we believe that the Japanese Yen is likely to continue drifting lower against the Euro, British Pound, Australian Dollar, and New Zealand Dollar. The wildcard remains whether we can expect a noteworthy correction in broader financial market risk sentiment.

Impressive performance and fresh highs across key barometers leaves markets at prime risk of pullback. Yet too many traders have gone bust in trying to time a market top. Until we see plausible signs of market turnaround, we have little reason to believe that the Japanese Yen may recover against higher-yielders. The admittedly unpredictable dynamics between the US Dollar and Japanese Yen make the USDJPY an especially challenging pair to trade. If nothing else, however, its recently bullish momentum is likely to keep it aloft through the coming week of trade. - DR

Source: dailyfx.com

US Dollar Will Have to Weigh 3Q GDP for Fundamental and Risk Impact

What little strength the dollar seems to find during the trading week seems to ultimately be swept away by the financial markets’ primary fundamental driver – sentiment. Whether or not the dollar makes for the ideal funding currency to the recuperating carry trade, it has already been put into that niche; and the rationale of the situation will not be reevaluated until either the trend stalls or there is a prominent change in the dollar’s fundamental makeup. There is the sense that this currency has resigned to a seeming permanence in its role as the FX whipping boy and the steady decline to fresh 14-month lows day after day. However, while the rise in risk appetite has maintained its bearing, it has a lost much of its fervor. This could signal the first stage of a reversal in yield appetite (and the subsequent recovery in the US dollar); and it could open the door for the big ticket 3Q GDP release to finally loosen sentiment’s hold over price action.

So far, we have absorbed two notable, third quarter growth readings from major economies; the results couldn’t have shown any greater contrast. Representing the strong face of the emerging market, China reported its economy grew 8.9 percent year-over-year through the third quarter. On the other end of the spectrum, the United Kingdom surprised the market by reporting a 0.4 percent contraction through the three month period ending with September and extending the economy’s worst recession on record. Will the US draw greater similarities to its British or Chinese counterpart? Economists’ expectations are impressive. A projected 3.2 percent annualized pace of growth through the quarter would shed the stigma of recession and bolster hope for a solid recovery on what would be the most significant pace of growth in two years. Gauging whether these projections are reasonable and determining whether the world’s largest economy is on a true pace of expansion, we need to breakdown the major sectors. Government spending plugged the whole but consumer spending, capital investment and a housing recovery are essential for material growth. Housing sales have certainly recovered and construction activity is stabilizing. Earnings through the second and third quarters suggest businesses will pick up production and start spending once gain. Yet, accounting for approximately three quarters of economic output, consumer spending is the backbone of the economy. Confidence seems to have already turned the corner; but consumption and planned purchases are both shaky.

Adding another complication to the high level release, we need to determine whether the dollar will produce a straightforward response to the data or the currency will default to its safe haven role. This is a complicated question; and it depends as much as what is happening with the capital markets heading into the release as the actual data itself. If there is a consistent rise to new heights in optimism, the sentiment aspect will likely win out. Alternatively, if risk appetite happens to commence a meaningful retracement beforehand, the relief for the greenback should allow for an intuitive response.

Keeping everything in perspective though; it is important to realize that the dollar does not have the characteristics of a long-term funding currency. Depressed market rates and benchmark yields are temporary; and there is little reason to doubt policy officials will not be able to work down deficits. Should the US return to growth with this 3Q reading, roles will start to reverse as fundamental realism dawns. On the other hand, a disappointment like that born of the UK’s status report could strengthen the unwanted correlation in the short-term.

Sourec: dailyfx.com

Brazil Real Rebounds on Optimism

The Brazilian real posted sharp gains today after several negative sessions on speculations that the country’s economic strength will induce central bankers to raise interest rates in the country, attracting more foreign investors.

The real lost significantly this week after the Brazilian government approved a new law taxing foreign investment on stocks, as an attempt to shun international investors that were causing the real to rally significantly, affecting Brazilian exporters. Today, the real pared much of its previous losses on optimism that the Brazilian economy will rank among the top performers among emergent markets in 2010.

USD/BRL closed this Wednesday at 1.7310 from an opening rate of 1.7535.

If you want to comment on the Brazilian real’s recent action or have any questions regarding this currency, please, feel free to reply below.

Source: topforexnews.com/

Mexican Peso Climbs on Government Reforms

After a part of the 2010 budget was approved by the government, confidence towards the Mexican economy improved, attracting investors to the Latin American emergent market and influencing positively the peso rates.

The Mexican lower house budget approval led speculators to believe that the congress will pass necessary reforms to adjust Mexico’s fiscal situation, improving the Latin American country confidence among investors regarding the economic outlook in the region for 2010, fact which provided support for a rise in the peso rates today.

USD/MXN closed at 13.01 from an opening rate of 13.06.

If you want to comment on the Mexican peso’s recent action or have any questions regarding this currency, please, feel free to reply below.

Source: topforexnews.com

Forex: Gold Finishes Basically Flat After Challenging $1,070

(RTTNews) - Gold prices were basically flat on Tuesday after giving back earlier gains. The metal backed off its daily highs as the dollar recovered some recent losses versus other currencies.

December-stamped gold rose to $1,058.10, up 50 cents on the session. Prices reached as high as $1,066.20, compared to the non-inflation adjusted record of $1,072 reached last week.

The greenback gained against the euro after extending a 14-month low overnight. The dollar also climbed off of a five-week low against the sterling and moved to an 11-day high against the Canadian loonie.

In economic news, the U.S. Labor Department revealed that producer prices declined 0.6 percent in September. This followed an advance of 1.7 percent in the previous month. Economists were looking producer prices to slip by 0.3 percent.

A Commerce Department report showed that housing starts edged up 0.5 percent to an annual rate of 590,000 in September from the revised August estimate of 587,000. Economists had expected starts to rise to 610,000 from the 598,000 originally reported for the previous month.

On Wednesday, the Beige Book will be made public at 2 p.m. ET. Fed speak will also be in focus with Federal Reserve Gov. Daniel Tarullo, Richmond Federal Reserve Bank President Jeffrey Lacker and Boston Federal Reserve Bank President Eric Rosengren.

Source: forextv.com

Australian Dollar Trades Near 2009 Record High

After falling from the highest level in more than 14 months towards the end of last week’s session in a day of bearish performance in stock markets, the Australian dollar started this week climbing once again on speculations regarding increased interest rates in the country.

The Australian dollar together with its New Zealand counterpart rebounded from a corrective movement Friday as stocks rose adding confidence that interest rates in the South Pacific region will return to pre-crisis levels gradually, after a Reserve Bank of Australia official affirmed that interest rates in the country are due to move towards normality, suggesting that record low levels will be lifted as soon as the economic conditions provide support for elevating borrowing costs in Australia, fact which is fueling an intense rally in South Pacific currencies, setting the Aussie and the kiwi among the 3 top performers in foreign-exchange markets, together with the Brazilian real, originated as well from a commodity exporter country.

The renewed risk appetite that fueled stocks in Asia also brought investors back to the Australian dollar-priced assets, suggesting that the Aussie is likely to remain at very high-levels towards the end of the year, as more than one rate hike is expected from the central bank in that nation for the following months.

AUD/USD traded at 0.9211 as of 13:11 GMT from an opening rate yesterday of 0.9144. AUD/JPY traded at 83.65 from 83.05.

If you want to comment on the Australian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

Source: topforexnews.com

Euro Rally Concerns Central Bankers

The euro continued to remain near a 14-month high versus the dollar today, as concerns regarding the current strength of the European common currency start to emerge among ECB officials, since a strong euro could jeopardize economic recovery in its member countries.

A part from currencies based in commodity exporter countries like Brazil and Australia, the euro has been benefiting from the new wave of risk appetite that has been unleashed since signs that the global slump was ending emerged in the first semesters of the current year. Even if European Central Bank officials started to make concerned declarations regarding a strong euro and a weakened dollar, investors are still opting for the euro this week, as companies like Apple Inc. posted much higher profits for the past quarter than expected, making the euro-dollar pair to flirt with the $1.50 level.

As the euro continues to gain, versus the dollar and the pound specially, the European Central Bank may start to consider other effective measures to halt its currency strong rally, as declarations from policy bankers already show a certain degree of concern. According to analysts, market sentiment towards the euro will remain bullish, and it’s unlikely that a trend reversal could take place before the end of the year unless central bankers interventions would be taken.

EUR/USD traded at 1.4967 as of 13:18 GMT from a previous rate of 1.4918 yesterday. EUR/GBP declined to 0.9090 from 0.9130.

If you want to comment on the Euro’s recent action or have any questions regarding this currency, please, feel free to reply below.

Source: topforexnews.com

Bank of Canada Takes Measures to Force Loonie Down

After trading once again near parity with its U.S. counterpart, the Canadian dollar witnessed a significant fall today as the national central bank stated that a strong currency will cause problems and slow down the economic recovery in the country, shunning investors from Canada, at least, temporarily.

Bank of Canada held its overnight rates at 0.25 percent as most of economic analysts were expecting, but the tone of policy makers declarations was the main driver for a bearish day for the Canadian dollar, as, according to central bankers, a strong currency in Canada will impact directly and significantly the economic recovery in the country, forcing the loonie down versus most of 16 main traded currencies in foreign-exchange markets this Tuesday, as a number of traders are already expecting more effective measures from the Canadian central bank to halt its currency rally.

After trading at the highest level since July 2008, the loonie’s rally become an evident reason of concern for Canadian economic recovery, according to analysts. From now on, a dispute is likely to take place, as demand for Canadian commodities rise, forcing the loonie up, the national central bank is likely to find policies to halt the currency’s gains, as it will certainly slow down the recovery in the country.

USD/CAD traded at 1.0400 as of 13:42 GMT from a previous rate of 1.0280 yesterday. CAD/JPY traded at 86.88 as of 13:43 GMT from 88.25.

If you want to comment on the Canadian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

Source: topforexnews.com

Hungarian Forint Up on Chinese Optimism

After Chinese exports shrank at a slower pace according to a report posted today, the Hungarian forint found support in optimism regarding the global economic recovery to climb versus the euro, the U.S. dollar, and several other currencies.

Hungary was one of the most affected countries by the global slump, having to recur to the International Monetary Fund to adjust its national accounts, but as the global economic posts positive reports, today indicating a less negative number in Chinese exports, the forint is climbing versus several currencies, specially its Eastern European neighboring options.

EUR/HUF traded at 266.89 as of 22:16 GMT from an opening rate of 269.17.

If you want to comment on the Hungarian forint’s recent action or have any questions regarding this currency, please, feel free to reply below.

Source: topforexnews.com

Bank of England Speculations Set Pound Down

The British currency is having another dark week losing versus its main rivals and also most of currencies traded in foreign-exchange markets as speculations that the national central bank may extend its asset-purchase program to revive the nation’s economy decreased appeal for the pound.

After a report posted today showing that inflation in the U.K. dropped to the lowest level in 5 years, speculations rose that the Bank of England will eventually have to expand its asset-purchase program, since extremely low inflation levels or deflation are a typical aspect of a recession, economic condition which has been punishing Great Britain since last year when the credit crunch struck the world. The Bank of England had affirmed previously that the current stimulus program would not be brought further, but investors are suspicious since economic conditions in the British Isles continue to deteriorate, and measures are to be expected from policy makers in order to revive the nation’s economy.

The sentiment towards the British currency is extremely negative, since other opportunities are more attractive for the moment in currency markets according to JR Crooks, Director of Research in Black Swan Capital:

Basically, low yields for the foreseeable future, plus greater potential for growth in other parts of the world are a bad combo for the pound.

The forecast in the short-term for the pound is likely to remain negative, unless appeal for the U.K.’s currency rises due to a shift in domestic or international financial scenario.

EUR/GBP touched 0.9404 as of 11:42 GMT from a previous rate of 0.9331 yesterday. GBP/USD traded near neutrality at 1.5801.

If you want to comment on the Great Britain pound’s recent action or have any questions regarding this currency, please, feel free to reply below.

Source:topforexnews.com

Canadian Dollar Near 1-to-1 With Greenback

The Canadian dollar benefited from another day of increased risk appetite to gain versus most of the 16 main traded currencies and trade near parity with its U.S. counterpart.

Crude oil is providing support for the Canadian dollar to become one of the best trading currencies during the this October as the main Canadian export is rallying, helping the loonie towards parity versus the U.S. dollar, which, according to some analysts, is just a matter of time to happen.

USD/CAD traded at 1.0339 as of 19:19 GMT in a rather neutral level in the intraday, but touched 1.0267 hours earlier, the highest level in 14 months.

If you want to comment on the Canadian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

Source: topforexnews.com

How Interest Rates Play a Role in the Currency Markets

Interest rates play the foremost important role in moving the prices of currencies in the Forex market. As the institutions that set interest rates, central banks are therefore the most influential factors. Interest rates dictate flows of investment. Since the currencies are representations of a country’s economy, differences in interest rates affect the relative worth of currencies in relation to one another. When central banks change interest rates they cause the Forex market to experience movement and volatility. In the realm of Forex trading, accurate speculation of central banks’ actions can enhance the trader's chances for a successful trade.

An increase in interest rates encourages traders to invest within that market and causes the demand for the currency to rise. As demand rises, the currency becomes scarcer and consequently more valuable. Investors are drawn to the currency, causing it to appreciate, because they will gain a higher yield on their investments, as in the Jane example. In order to purchase the country's assets (stocks or bonds), Jane will have to convert her domestic currency to the target country's currency also increasing demand. Conversely, a fall in interest rates discourage investors from purchasing assets in that particular economy, as the return on their investment is now smaller. The economy's currency will depreciate as a result of the weaker demand.

Source: forexfloor.com

The Value of Trade Balance to Local Economy

The balance of trade also referred as trade balance, which sometimes is symbolized as NX, is the difference of the monetary value of imports and exports in one economy in a given period of time. The balance of trade is considered the biggest part of a country’s balance of payments.

Imports, domestic spending, foreign aid, and investment abroad are called debit items while credit items includes exports, foreign investments in domestic economy and foreign spending in domestic economy.

A trade surplus is a positive balance of trade which is consists of more exporting than importing. A trade deficit is the negative balance of trade or sometimes called a trade gap. The trade balance can sometimes be divided as services balance and goods balance just like in the United Kingdom which they use the terms invisible and visible balance.

The balance of trade is a part of current account which includes transactions that includes income derived from international investment and international aid. Thus, if the current account comes as a surplus then the nation’s international net asset increases also while deficit will decrease the international net asset.

A good trade surplus is achieved when a country exports products more than buying imported goods. A trade deficit is eventually experience as a result of the opposite of a trade surplus. The trade balance is alike to the difference of a country's output and the domestic demand. These factors may affect the trade balance: prices of goods manufactured, taxes and tariffs, trade agreements, business cycle (home or abroad), and exchange rates.

The trade balance is different in many business cycles. For instance, export growth like oil and industrial goods which improves when there is economic expansion.

In developed countries like; Japan, China and Germany usually run at trade surpluses in which they experience a higher savings rate. Around the world there are different natural resources which a country may have for instance, countries from the coastal regions are major producers of fish, Canada can be a major producer of lumber because of its huge forests while in the Middle East, has the most oil reserves.

International trade is important so in order to sustain the balance of trade. A country should be totally self sufficient without international trade. Through international trades, each country will have the opportunity to produce specialize goods efficiently. In relation, when a nation specializes in producing these goods, the total production increases instead of trying to be self sufficient. Nations will benefit from international trades and also meets their needs. Generally, nations will trade to other nations when they gain from the trade. But the gains are not usually equal in terms of benefits and profit.

Source: forexfloor.com

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G-7 Comments Set Australian Dollar High

The Australian dollar posted today its first gains after a rather bearish trend last week as the Group of 7 did not confirm speculations which suggested it would stress on the importance of a strong U.S. dollar to stabilize the world economy, favoring again high-yielding currencies.

The Australian dollar has been one of the best performing currencies this year as risk appetite surged with the first signs of economic improvement in multiple parts of the world. This Monday, after a rather risk averse past week prior to the Group of 7 meeting, the Aussie managed to climb as both international and domestic factors provided support for the South Pacific currency to revert its previous losing trend. The G-7 did not give as much importance to a strong dollar as analysts expected, bringing risk appetite back to markets also adding to optimistic news in Australia, as services industry shrank less than expected in the past month.

The Aussie definitely remains as one of the best bets in currency markets for this week, according to specialists. A favorable domestic scenario combined with the G-7 meeting outcome only adds to the already optimism situation in Australia which is expecting interest rates to be raised before the end of year, attracting overseas investors to purchase Aussie priced assets.

AUD/USD traded at 0.8749 as of 12:06 GMT from an opening rate of 0.8670 yesterday. AUD/JPY also climbed, touching 78.65 from 77.53.

If you want to comment on the Australian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

Source: topforexnews.com

Dollar Loses Slightly on G-7 Comments

The dollar started this week losing versus the euro and the pound after speculations that Group of 7 central bankers would provide statements supporting the dollar were not confirmed, erasing last week gains and setting the dollar to a bearish scenario again.

Last week was marked by a good U.S. dollar performance as a G-7 meeting was expect to stress the importance of a strong greenback, as it could provide solid competitiveness for exporters around the world, specially in the Eurozone, where they have been struggling to find costumers due to the current euro’s levels. Group of 7 policy makers did not signaled that they support a strong dollar, indicating that natural market regulations are more welcome than disorderly swings in currency markets, setting the U.S. currency back to a bearish scenario, where the Australian dollar also gained significantly this Monday.

The shift in sentiment towards the dollar may set the U.S. currency to a new losing streak towards record lows according to some analysts, but even if the scenario is not the most optimistic for the greenback, other currencies, with a few exceptions, are still struggling to find their way out of recession, so the dollar bearish scenario may not impact the currency as much as it would in normal conditions, since most parts of the world are still facing a recession period.

EUR/USD traded at 1.4626 as of 11:02 GMT from an opening rate of 1.4595 yesterday. AUD/USD traded at 0.8745 from 0.8670.

If you want to comment on the U.S. dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

Forex reserves rise to $14.49bn

KARACHI: Pakistan’s foreign exchange reserves rose to $14.49 billion in the week that ended on September 26 compared with $14.48 billion the previous week, the State Bank of Pakistan (SBP) said on Thursday.

Reserves held by the State Bank of Pakistan were flat at $10.94 billion from a week earlier, while those held by commercial banks edged up to $3.55 billion from $3.54 billion a week earlier, data showed. Foreign reserves hit a record high of $16.5 billion in October 2007 but fell steadily to $6.6 billion by November last year, largely because of a soaring import bill. However, an International Monetary Fund (IMF) emergency loan package of $7.6 billion agreed in November helped avert a balance of payments crisis and shore up reserves. staff report

Source: dailytimes.com

Jobs Disappoints, FX Whipsaws

The dollar was initially higher following the September labor report, rallying to 1.4481 against the euro and 1.5806 versus the pound sterling before relinquishing its earlier gains by the New York afternoon. US equities also recovered from its losses in the morning session, clawing their way back into positive territory, with the Dow Jones and Nasdaq up marginally.

Although the September unemployment rate was on par with consensus estimates, the reading still touched a fresh 26-year high at 9.8% versus August at 9.7%. The most disheartening component of the labor data was the non-farm payrolls report, which defied expectations for an improvement to a loss of 180k jobs, instead revealing a considerably larger loss of 263k jobs for September compared with a revised 201k jobs shed in the previous month. Meanwhile, average earnings edged up by less than anticipated, increasing by 0.1% compared with an upwardly revised reading of 0.4% in August and average workweek drifted lower to 33.0 hours from 33.1 hours.

The economic calendar for Friday also included durable goods orders and factory orders. The headline durable goods report declined by 2.6% in August, deteriorating further from the prior month’s 2.4% decline while core durable goods orders fell by 0.3% versus a flat reading previously. Factory orders fell by 0.8% for August, missing estimates for an increase of 0.3% from 1.3% in July.

Source: forexnews.com

Dollar stays down after ISM tops expectations

NEW YORK (MarketWatch) -- The U.S. dollar remained down slightly versus major rivals on Monday after the Institute for Supply Management said its index of the services industry rose to 50.9 in September, the highest since May 2008. The dollar index /quotes/comstock/11j!i:dxy0 (DXY 76.69, -0.30, -0.39%) , a measure of the U.S. currency against a trade-weighted basket of rivals, fell to 76.868 from 77.09 in late trading on Friday. Economists polled by MarketWatch expected the index would rise from 48.4 last month to the 50 level, the dividing line between expansion and contraction in the industry. The dollar was losing ground in earlier trading after finance ministers from the Group of Seven nations made no specific mention of the currency in a joint communique at their weekend meeting.

Source: marketwatch.com

How To Make Profit Through Forex Trading?

Forex (Foreign Exchange) trading is nothing more than direct access trading of different types of foreign currencies. In the past, foreign exchange trading was mostly limited to large banks and institutional traders. However, recent technological advancements have made it so that small traders can also take advantage of the many benefits of forex trading just by using the various online trading platforms to trade.

The currencies of the world are on a floating exchange rate, and they are always traded in pairs Euro/Dollar, Dollar/Yen, etc. About 85 percent of all daily transactions involve trading of the major currencies.

Four major currency pairs are usually used for investment purposes. They are: Euro against US dollar, US dollar against Japanese yen, British pound against US dollar, and US dollar against Swiss franc. This is how they look in the trading market: EUR/USD, USD/JPY, GBP/USD, and USD/CHF. As a note you should know that no dividends are paid on currencies.

If you think one currency will appreciate against another, you may exchange that second currency for the first one and be able to stay in it. In case everything goes as you plan it, eventually you may be able to make the opposite deal in that you may exchange this first currency back for that other and then collect profits from it.

Transactions on the forex market are performed by dealers at major banks or forex brokerage companies. forex is a necessary part of the world wide market, so when you are sleeping in the comfort of your bed, the dealers in Europe are trading currencies with their Japanese counterparts.

Therefore, it is reasonable for you to believe that the forex market is active 24 hours a day and dealers at major institutions are working 24/7 in three different shifts. Clients may place take-profit and stop-loss orders with brokers for overnight execution.

Price movements on the forex market are very smooth and without the gaps that you face almost every morning on the stock market. The daily turnover on the forex market is somewhere around $1.2 trillion, so a new investor can enter and exit positions without any problems.

The fact is that the forex market never stops; even on September 11, 2001 you could still get your hands on two-side quotes on currencies. The currency market is the largest and oldest financial market in the world. It is also called the foreign exchange market, FX market for short. It is the biggest and most liquid market in the world, and it is traded mostly through the 24 hour-a-day inter-bank currency market.

When you compare them, you will see that the currency futures market is only one per cent as big. Unlike the futures and stock markets, trading currencies is not centred on an exchange. Trading moves from major banking centres of the U.S. to Australia and New Zealand, to the Far East, to Europe and finally back to the U.S. it is truly a full circle trading game.

In the past, the forex inter-bank market was not available to small speculators because of the large minimum transaction sizes and strict financial requirements.

Banks, major currency dealers and sometimes even very large speculator were the principal dealers. Only they were able to take advantage of the currency market’s fantastic liquidity and strong trending nature of many of the world’s primary currency exchange rates.

Today, foreign exchange market brokers are able to break down the larger sized inter-bank units, and offer small traders like you and me the opportunity to buy or sell any number of these smaller units. These brokers give any size trader, including individual speculators or smaller companies, the option to trade at the same rates and price movements as the big players who once dominated the market.

Source: blog.forexgen.com

Forex Trading Tutorial

Forex books, online manuals, short seminars, long financial courses - all these can help serve your educational process, especially if you are seriously considering a full time "employment" with online Forex trading. But even the best and the most comprehensive materials can leave a lot to be desired, particularly because most of these are simply based on theories.

In some cases, some of these theories are not even applicable in the evolving trading trends of the online market. In reality, when you begin trading, it is very common to get lost among the figures and the graphs. It is also very common to start trading immediately without even thinking of possible strategies or business plan. Likewise, it is common for neophyte online Forex traders to see their hard earned cash that was just invested in the currency bid fly out of the window before anyone can say, "I am a Forex trader."

The best way to eliminate (or lessen) these possibilities and to further your online Forex trading skills is via a hands-on approach. Fortunately, there are some software applications like Forex Tracer™, FAPS or Forex Autopilot Systems™, and Forex Funnel™ that allows you to do this by using their Forex trading tutorial applications. There are other systems, robots and applications available, of course. But try to read product reviews first to ascertain that you will not be wasting your time, money and energy on potentially useless and wasteful products.

For clarification's sake: Forex Tracer™, FAPS or Forex Autopilot Systems™, and Forex Funnel™ are not merely training tools. In fact, these are great tools for anyone who wants to indulge in online Forex trading full time. However, for any novice, it would be best to use the free demo software installed in these software applications as a Forex trading tutorial guide. Here, a trader can actually start developing the skills necessary to trade successfully in this financial market without even investing one single nickel yet during the entire process.

At the same time, the software applications can help the trader develop an eye as to how the actual trading process works, and why the seemingly innocuous details such a pip monitoring and live updates from the trading floor is essential to future trades. This can also serve as Forex trading tutorial guide by letting the user put theory to the test, without suffering from any dire consequences like monetary loss.

One more benefit to using these is that these software applications have technical support, which can help personalize the program to the trading needs of the person. At the same time, the people offering technical support are very good sources on overcoming some of the more technical aspects of online trading.

Source: articlemaniac.com

G20 means G7 no longer only game in town on forex

NEW YORK (Reuters) - Group of 20 leaders say they want to rebalance the world economy but getting them to accept a weaker U.S. dollar in the process could prove a lot to ask.

That's especially true now that the Group of 20, which includes emerging markets like China and India, has supplanted the Group of Seven rich countries as the forum for managing the global economy.

In fact, coordinating currency policy of any kind may get a lot harder if it requires getting 20 countries, with disparate interests and priorities, to pull in the same direction.

"It's tough to reach consensus on currencies in the best of times, but with more people at the table and more interests to pursue, it could make coordinated intervention more difficult to achieve," said David Gilmore, partner at FX Analytics in Essex, Connecticut.

Take the case of rebalancing the world economy. That's viewed as a polite way of calling for a weaker U.S. dollar, since it would require debtor countries such as the United States to save more and exporters like China or Japan to spend more.

But that would involve major social and economic changes for countries like China, which has relied on a weak currency and exports to drive its phenomenal rate of growth. In other words, it's hardly something China would want to rush into.

The G7 -- the United States, Britain, France, Japan, Canada, Germany and Italy -- say they will still meet periodically, starting this weekend on the sidelines of an annual International Monetary Fund meeting in Istanbul.

But their ability to act quickly and decisively within the larger G20 may be diminished, particularly if China, with its war chest of $2 trillion in currency reserves, is not on board for any proposed changes.

Last weekend's G20 summit, with its rebalancing pledge, is a case in point. While exchange rates may have been discussed behind closed doors, there was no official mention of currencies, much less any coordinated action.

It was a far cry, for instance, from the 1985 Plaza Accord, named after the New York hotel where officials from the United States, Germany, Japan, Britain and France met and agreed to weaken the dollar against the Deutschemark and yen.

Barclays Capital strategist Steven Englander said that with so many different interests represented in the G20, references to currencies will be rare, "even if some of what they say has clear implications for exchange rates."

But agreement on policy objectives will carry more weight, he said, now that developing countries, which hold the biggest share of currency reserves and are having a growing impact on the world economy, are represented at the table.

UNILATERALISM

Still, some worry that a lack of coordination at the top will tempt countries to act unilaterally on exchange rates.

Indeed, many countries have not been shy about weakening their own currencies to protect their fragile economies.

Source: reuters.com