Archive for the ‘Political’ Category

As the US government shutdown moves into its third day, inevitably the crisis continues to have a negative impact on the strength of the US dollar.

Many other currencies had already started to strengthen against the dollar by the end of September, in anticipation of the Republican-led House of Representatives vote to refuse acceptance of the budget. However, the continuing failure of the American political parties to negotiate a settlement is likely to weaken confidence in the dollar further as the days go by, which will impact on forex trading in a number of currencies.
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In the latest round of currency trading news, two main events have recently dominated the currency landscape. The first main concern is the recent decision by the United States federal government to continue its policy to maintain its current levels of quantitative easing.
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One of the biggest pieces of news to impact the online forex trading community this week has been the announcement that the latest US job figures are not as high as was hoped for.

Despite a range of measures having been put in place by President Obama and his administration to try and improve the USA’s worrying job situation, the modest target of an extra 180,000 jobs was not met.
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The online forex trading new on Monday saw the dollar managing to surpass the yen for the first time in five trading sessions, which is welcome news to a number of investors.

This relatively expected rise took place as there was a substantial gain in the manufacturing sector for the state of New York, which has generally seen favourable results in the month of June. Though we are still in the middle of the month, the trends show promise for future investors in the months to come.
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Entering China has become a hot topic in the forex world. From boardrooms to bulletin boards, there’s a significant amount of buzz regarding the best way to delve into this market. China offers enormous potential for traders, yet this remains largely untapped due to the draconian regulations laid down by the Communist Chinese government.

While it’s been possible for Forex companies to gain some kind of access to Chinese markets, this has typically been accomplished through partnerships with local representatives, offices in less heavily-regulated Asia-Pacific offices and IBs, this has not translated into securing a real presence in the country itself.
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The final week of April has witnessed the Euro tumble once again as the jobless rates in the European Union hit an all-time high of 12.1% awhile inflation slowed to 1.2%; rates not seen since February of 2010.

Of notable importance for online forex traders is the marked unemployment figures released from both Spain and Germany. While the figures in Germany may be seen as comparatively marginal, those in Spain represent the continued weakness of the fifth-largest economy in Europe.
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On the online forex trading front for this week, a few key movements are taking pace in Europe that have drawn considerably interest from currency traders.

One movement that has gained considerable attention is the fact that the Swiss deflation rate fell to a profound eight month ow in March. This has mainly been caused by the price of consumer goods falling; induced largely by the flow of liquidity from traders looking to hedge themselves against a weakening Euro. In turn, this has obviously strengthened in the CHF.
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As Cyprus finally manages to come to an agreement with international lenders over a 10 billion euro bailout, the Euro has seen some positive movement in response. Finally pulling away from its four month low, this morning the central European currency achieved an online trading value of $1.3040, an improvement which has been desperately sought by Forex traders across the world.

Short term fluctuation

However, though euro zone finance ministers were quick to endorse an agreement which should stop Cyprus facing total financial ruin, many investors are not seeing this positive step in Euro value as anything other than a short term fluctuation. (more…)

The most prominent online trading news for this week is the unfolding situation in Cyprus. We have seen the Euro lose more value as the EU continues to pressure Cyprus to come to a consensus regarding the 5.8 billion Euros needed to save the ailing country from a disorderly default and a messy exit from the European Union.

Although this 5.8 billion was initially to come from the mandatory levy on all citizens’ bank holdings, severe protests and mass withdrawals of capital have made this move, at least as it currently stands, all but impossible.
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It seems that the new year has once again brought the bears out in regards to the latest online forex trading sentiment. The Euro has lost any previous gains made against the dollar due to a larger fall in European Union industrial output than previously predicted.

This statistical pullback is highlighted by the continued record-high unemployment in countries such as Spain and Greece. Although unemployment remains one of the most bearish economic barometers for the Euro, weak private sector output serves to further illustrate the fragile state of this multinational economy.
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Online Forex Trading investors will be buoyed by news that global markets have responded positively to the US fiscal agreement on the first trading day of 2013, as a last minute deal was struck by Congress to avert the so-called ‘fiscal cliff’.

In London the FTSE 100 surged beyond the 6000 level for the first time in over seventeen months with banks making some of the biggest gains, after similar improvements in the Asian markets earlier, with Hong Kong’s Hang Seng increasing by 2.9% to its highest level since June 2011.

Both the DAX and the CAC 40 also rallied positively to the news of the US deal. The Dow Jones was up by just over 2% at 10:15 EST.
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Standard and Poor’s Confirms that UK will keep its AAA Rating in a Move which Leaves Forex Traders Divided

There has been much talk of a double dip recession following the disappointing UK growth figures released earlier this week and concerns had been growing that the UK would imminently lose its AAA rating as it became only the second industrialised nation to fall back into recession.
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The week ahead looks to highlight concerns underpinning the European sovereign debt situation. The main story still is that of volatility on the European market; the single currency’s future viability questioned by many traders worldwide.

Spain is becoming more and more of a concern

The concerns with Spain’s ability to manage a flailing economy have grown since the IMF rescue package was approved. Spanish yields have tipped well over seven percent, trading at 7.39% after hitting a European-era high of 7.56%. Attempting to mitigate further volatility, Spain has banned short selling for three months while Italy, feeling the effects as well has banned short selling financials for one week. There are now fears that Spain may indeed seek a full bailout, as regional governments have begun to express concern for their ability to manage internal debts. Spanish and Italian bank shares were the worst hit followed closely by their domestic indices; the Ibex at one point dropping nearly five percent.

Greece’s debt reduction

Furthermore, creditors are expected to begin auditing Greece’s progress on debt reduction. This audit determines whether the country is to be approved for an additional 31.5 billion euros. With political and social unease, a quickly shrinking economy and many investors questioning whether Greece will meet its August deadline, there has been speculation of true insolvency should their financial situation worsen.

EUR/USD at two-year low

Because of these protracted jitters, the euro has fallen to a two-year low against the US dollar to trade at $1.2082. Furthermore, it has fallen to an eleven-year low to the Japanese yen. Below $1.20, many online Forex traders have taken a bearish stance.

Euros long term survival

On the other hand, some Forex traders have taken the attitude that any position would have to be long due to such market volatility. This, of course, is under the assumption that the euro will remain in its current form. Indeed, the lack of real movement in the precious metals markets, traditional safe havens, illustrates that many believe the markets may incur still more losses in the near term. Nonetheless, taking a long position in the euro may indeed be one of the few hedges against what remains as the most volatile era for decades.

Disappointing Chinese trade data saw Asian stocks declining and the US Dollar and Japanese Yen gain ground as traders turned to these safe haven currencies. The Chinese report showed that imports grew by only 6.3 percent in June, compared to May’s figures of 12.7 percent and the 11 percent analysts had forecasted. This is disappointing and places a question mark on Asian growth as many of the economies in the area rely on China as their main source of demand.

Thus, overnight Forex tsraders saw the USD gain ground while the AUD (Australian Dollar) and NZD (New Zealand dollar) slipped. Clearly, many online traders opted to mitigate risk and buy up the greenback and Yen. (more…)

The German Unemployment Report is expected to support the bleak outlook for the Eurozone as unemployment in the area’s largest economy is forecasted to increase in June. Undoubtedly, the forecast for the Eurozone is not a rosy one, especially considering Greece is expecting a 9% contraction of their (more…)

Greece’s recent general elections had much of the world holding their breaths as the fear that an anti-Eurozone party would come out victorious. The doomsday scenario many feared was that Greece would revert to the drachma and cancel its bailouts, leading to massive losses for the Eurozone as well as the potential for an even greater disaster, with Spain and Italy teetering on the edge. Fearing excessive volatility on the markets some online Forex trading brokers even shut down private trading on Sunday, the 17th of June.

While the “end of the Eurozone” scenario did not come to pass as the pro-Eurozone (more…)

After a few days of discussions, many observers believe Tories and Liberal Democrats are forming a coalition government in United Kingdom. Currency analysts are now relieved that Gordon Brown seems to step down as Labours leader from September this year.

The new government are likely to cut borrowing sooner then a Labour government would and in general, it should do well for the economy and the british currency. Forex analysts already predict a hung parliment between conservatives and liberal democrats and they seem to like it – pound sterling rose by almost 1 % today. Interest rates (more…)