Dollar Slides


 

The dollar slides against the single European currency with the pair trading at two-month highs.

26, January 2011

The US Dollar suffered as President Obama called for a freeze on non-security discretionary spending during his State of the Union speech last night, suggesting a part spending freeze that would save $400 billion from the budget over the next decade and additional cuts of $78 billion in defence.

There was a minor reaction in markets to the speech, previously that day a report indicated that US consumers began the year with much more confidence in the economy than expected, seeing a recovery gaining steam and expecting more jobs will be created. The Conference Board said its consumer confidence index, which had slipped in December, rose in January to 60.6, its highest level since May.

In contrast US Housing data also released showed a mini double-dip in home prices. Residential real-estate prices dropped in November by the most in a year. According to the S&P/Case-Shiller index, home values in 20 cities fell 1.6 percent from November the prior year, the biggest 12-month decrease since December 2009.

The pound was dealt a severe blow yesterday as the UK economy surprisingly contracted in the fourth quarter of 2010 as the harshest winter in a century hit retail and service sectors. GDP fell by 0.5% in Q4, having increased for the last 4 quarters, according to the Office for National Statistics yesterday morning. The ONS said that growth would have been “flattish” in the fourth quarter without the impact of the weather and that weather-related disruptions accounted for “most” of the 0.5% decline.

This view has been echoed by the words from Mervyn King last night who played bad cop / bad cop all on his own. There were no soothing words at all with expectations that rising consumer inflation would remain a problem but that wages in real terms would fall – he warned the UK to expect living standards to fall with the likelihood that things would not improve much for the rest of 2011.

The focus today will now shift to the upcoming FOMC statement with no change in near-term monetary policy expected. However, investors will be focussed on the inflation outlook language and whether any of the new voters on the committee dissent in a hawkish direction. Losses in Euro/Dollar were tempered last night on speculation the Federal Reserve will signal the world’s largest economy is improving. The FOMC statement may contain language acknowledging improvement in consumer spending and employment.

Report by Philip Ryan

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

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Euro Market Has A Quiet Day


 

Consolidation hit the forex markets yesterday with little influence from economic data.

21 January 2011

We received more dialogue from European officials concerning their Emergency Funding Facility, but really only going over old material so no material effect on rates. Trading has looked to concentrate on testing the technical resistance in Euro/Dollar at 1.3525.

We are sitting just above that level at present but we will need to close higher this afternoon in order to signal a shift higher. This concentration on buying Euro/Dollar has caused the Euro to strengthen across the board with both Sterling and Yen falling.

Yesterday’s data from the US was a bit mixed although overall deemed positive for the economy with interpretation of the numbers largely on the side of them bolstering the recovery. Analysts still consider this to Dollar supportive on the grounds that the currency will be deemed as becoming a growth currency in the months to come. No data from the US scheduled this afternoon.

Two items of interest from peripheral currencies. Firstly the Kiwi Dollar received a bit of a lift yesterday following the release of the New Zealand retail sales numbers for November. The headline figure was reported at +1.5% against expectations of +1.1%. The move higher was short-lived however and it soon fought a losing battle as the Dollar drew support from the previous afternoon’s US data.

Secondly, a comment from the Riksbank Deputy-Governor, Wickman-Parak indicates a possible further strengthening of the Swedish Krona. He suggested that rate hikes from the Central Bank would help contain unsustainable levels of credit growth; this would imply a further strengthening of the currency. Later on, the Swedish PM, Reinfeldt, said that Swedish industry can be competitive even with a stronger currency, further suggesting that policy-makers are still comfortable with further Krona appreciation.

Interestingly, these comments appear contrary to the approach being touted by the Norges Bank, from where an official was reported as saying that further hikes in NOK interest rates would be detrimental to the Norwegian economy as they would cause a strengthening of the currency.

Report by Tim Lewis

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

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Euro Trading Lower


 

Anyone who was short the Euro last week got their fingers burnt, with the Euro/Dollar pair rising almost one and a half percent on the back of successful bond auctions in Spain and Italy.

17  January 2011

Today the euro posted its largest weekly gain in almost two years after successful auctions of Portuguese, Spanish and Italian debt garnered more demand than expected and Germany’s Chancellor Angela Merkel pledged to do whatever’s necessary to ease the sovereign-debt crisis. The 17-nation currency rose last week against all of its major counterparts except the Swedish krona and Danish krone including a 4.2% weekly gain versus the US Dollar and a 2.1% move higher against Sterling

It was another round of positive news for Uncle Sam on Friday’s with data indicating that consumer spending is coming back to life. Inflation pressures on the other hand, remain negligible, based on the core reading stressing the Fed’s concern that inflation is running constantly below the target level. Therefore it looks like it will be a long time, most likely late into 2012 before we see a rate rise in the US.

While Bernanke is in no rush to increase rates, rumours are circulating within the European Central Bank (ECB) that they are more eager to pull the trigger for higher rates. ECB President Trichet’s hawkish press conference last week caused a stir and marked a clear shift in ECB reaction towards a more hawkish stance.

So far this morning though, the euro has marginally fallen against the dollar, snapping last week’s five-day gain, again on concern the region’s debt crisis will continue to worsen, even as European finance ministers meet today to hammer out a new strategy to stem the contagion.

Fitch’s decision to cut Greece’s sovereign debt rating to BB+, outlook negative, from BBB-, citing its “heavy public debt burden” which renders “fiscal solvency highly vulnerable to adverse shocks”, also weighed on the single currency this morning. All three of the main ratings agencies now rate the sovereign as sub-investment grade.

Looking at the week ahead on the economic data front, the calendar is reasonably light starting with today’s bank holiday in the US. The key data this week is primarily due from the UK with December’s inflationary figures scheduled for tomorrow morning, unemployment data on Wednesday followed by retail sales on Friday.

Report by Philip Ryan

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

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Euro Heads For 6-month Low As Portugal Comes Under Pressure


 

Euro currency news looks bleak today with Portugal set to fall and Spain to follow suit.

10 January 2011

The Focus last week was on Friday’s US Unemployment Report and the numbers didn’t fail to surprise the pundits. Against expectations of a headline increase in non-farm payrolls of 150,000 – 160,000, the actual number was reported as an increase of just 103,000; not good. The amendments to the October and November outcomes however, added a further 70,000 to the totals, which in the end dragged the total above the predicted level.

It was enough to calm any fears over the recovery in the US, abetted by the unexpected sharp drop in the employment rate from an expected 9.7% to 9.4%. A staggering fall in the context of the data set, but explained away as being the result of a contraction in the workforce rather than a lot of unemployed getting jobs. Euro/Dollar settled into its recent trend of slipping lower, closing the week at its lowest point since the middle of September.

Having cleared that potential high-hurdle, the Dollar does look set for further gains (1-1 parity?) with the emphasis now on the Euro to convince investors that it has a long term (or even short term) future. Upcoming events don’t bode well for the single currency though.

3-month old press reports on Ireland have been dusted off, with ‘Ireland’ being replaced by ‘Portugal’ ahead of the Portuguese bond auction on Wednesday. The country’s 10-year bonds have already been driven to having to yield over 7 1/2%, well above the price paid by both Greece and Ireland for their own IMF/EU rescues. It can’t be sustainable for Portugal to pay this sort of cost just to avoid assistance, but the threat to the Eurozone might prove much greater.

If markets succeed in pushing Portugal through the same trap-door as the other two, then Spain will be placed well and truly in the firing line – and that will be a real problem for member states of the Eurozone, in both financial and economic terms. Following Portugal’s attempt of Wednesday, both Spain and Italy have bond auctions scheduled for Thursday and unless the former is able to conjure up a surprise result, then I expect to see the Euro hitting a 6-month low before the month is out.

Elsewhere, talk is all about inflation, with lots of press inches and TV time devoted to the quandary in which the BoE/MPC find themselves. There is no doubt that the committee would like to express their concern about the recent stubborn upsurge in UK inflation but are certainly not yet convinced that the economy is ready for a return to normal interest rate levels. This would require a ‘surprise’ 0.25% rise in rates, but of course, if everyone is looking for it then it wouldn’t be a surprise and therefore be of no use what-so-ever other than making what loans are available, more expensive.

Looks like no change at this Thursday’s MPC get together and will focus even more attention on the Bank of England’s quarterly inflation report, following on from the minutes from this week’s meeting (on 26th Jan) and the next MPC meeting in early February. The market is of the opinion however that the UK are going to be the first of the Gang of Four (the US, UK, Eurozone and Japan) to start raising rates and are hence pushing Sterling higher. No significant data today so Sterling will only react to further moves in Euro/Dollar.

Report by Tim Lewis

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

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Euro Weakens In A Cold Run Up To Christmas


 

The Euro support is weakening as a cold Christmas looks on the cards…

20 December 2010

The present temperatures in London gives the best analogy for the various markets this week. The Met Office is urging people to stay at home after London was hit by serious snow, and that is exactly the same thing traders will be doing with their cash this week. Expect very light market conditions, and current themes across the Euro, Dollar and Sterling are bound to continue into the New Year.

Eurowise, the IMF published a staff report on the viability of the financial reforms in Ireland and it was not pretty to read. According to the IMF the challenges facing the Irish economy are “intense”. The currency market reaction? The Euro/Dollar graph on Friday looked like a black run at Chamonix. 2011 will not likely bring any rest-bite for the single currency.

Even more countries will be pulled into the markets crosshair, which means more Euro weakness over the coming weeks and months. We all remember the Greek story was like observing a slow motion car accident. It seems inescapable that the same drawn-out future lurks in wait for a few more Eurozone nations, and the stability of the single currency rests on the capability and patience of Germany to keep playing backstop.

Just like the Euro trading news, Sterling will probably trade at, or similar to current levels with little economic details this week to push it in any certain direction (it might be pulled by developments in the Eurozone however).

Wednesday sees the release of the Bank of England’s minutes, with the prolonged split in voting between Andrew Sentance, Adam Posen and the rest of the rabble. It will also be intriguing to see their discussion on short-term inflation and just how long the bank expects it to return to target.

Increasing US bond yields have been the driver of new moves in cable towards the 1.54 level. Regardless of whether you believe that this is due to increased optimism of the US economic recovery or investors eventually running scared of American government debt we will need to wait and see, but the QE pumped stock market continues to rise.

There are lots of low key US numbers due for release this week including new house sales and buyer confidence which may or may well not lend support for the recovery narrative but just like the Euro and Sterling, range trading throughout the week is the most probable result.

Original Report by Phil McHugh

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

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Euro Exchange Rate Graph Today – Relative Valuation in the Foreign Exchange Market


 

Euro Exchange Rate Graph Today – Relative Valuation in the Foreign Exchange Market

Euro Exchange Rate Graph Today

The main difference between trading in the foreign exchange market and trading in all other financial markets is the difference between solitary valuation versus relative valuation. Solitary valuation is common sense for most people and is the way that most investors understand stock prices and other financial markets, but relative valuation is a little bit more tricky and it is what can make forex trading more complicated in some ways than stock or traditional commodity trading. Euro Exchange Rate Graph Today

When you look at a stock market quote you will usually see the stock value quoted in a dollar amount, and this of course is the normal way that we value things in finance. However, valuing a currency is a different process, because you cannot value the US dollar in terms of dollars so it then becomes important to value one currency in terms of another currency. It is for this reason that all foreign exchange transactions take place with currency pairs, and this is called relative valuation where one currency’s value is listed relative to another currency.

The Base Currency And The Quote Currency

In a currency pair such as the EUR/USD, the first currency listed in the pair is called the “base currency” and the second currency listed is called the “quote currency.” It is important to remember that all exchange rate quotes are quoted in established currency pairs, and while to the untrained eye it may seem like the pairing of different currencies is done in a random order which then became the industry standard, there is actually a fairly sound logic behind the ordering of most of the major currency pairs. Euro Exchange Rate Graph Today

For most of the major currency pairs that are traded we see that the US dollar is usually quoted as the base currency such as the USD/JPY and USD/CHF pairs. The reason this is so is because the USD has typically and historically had a higher value than these currencies, and so it makes sense to keep it valued at 1 so that any changes in value of the other currency become easily apparent. The only exceptions to this rule are the EUR, GBP, and AUD in which these currencies have a value that is as high as or higher than the USD so it makes sense to list these as the base currencies for the ease of calculation.

Once you understand the simple common sense behind these exchange rates, the calculations that need to be performed become much easier to understand. Most large newspapers and especially financial newspapers will have a currency table that is updated daily. If you read through this table looking for the value of a currency pair that you are trading but instead this value is reversed from its normal order (such as displaying the US dollar against the Euro with the dollar as the base currency with a value of 1), all you would need to do to get the normal currency pair valuation is to take that value and divide it by one to effectively switch the base currency and the quote currency. Euro Exchange Rate Graph Today

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The euro was down against the dollar


 

The euro was down against the dollar

European equities like the FTSE,CAC and DAX were down as investors continued to dump banking shares on mounting fears of a domino effect in the euro zone after Ireland’s bailout.David Thebault, head of quantitative sales trading at Global Equities in Paris said: “There’s such a distrust in the euro zone. Long-only investors are turning to German industrial stocks and equities in emerging economies. The only good thing in this crisis for European stocks is the weakening euro.”On the upside, mining stocks gained ground on Tuesday, rising along with metals prices on persistent concerns about supply tightness.The Wall Street were down as news came in that Portugal’s debt could be downgraded and reignited selling in a high-volume flurry might bode ill when markets reopen. Financial and technology stocks ranked among the biggest drags.Earlier in the day, the S&P 500 had erased loss after improved consumer confidence and manufacturing data were the latest signs the U.S. economy was on the mend. Consumer discretionary stocks were among the better performers after the Conference Board reported U.S. consumer confidence rose to its highest level in five months.Doug Roberts,chief investment strategist at Channel Capital Research.com in Shrewsbury, New Jersey said: “If you start to see them sell off substantially, it usually tends to have a rollover effect.”
The Japanese market especially the Nikkei was seen settling lower as a tumble in Chinese shares on liquidity worries pushed Japan investors to book profits on a sharp rally for Tokyo stocks this month. Shanghai stocks fell as a cash shortfall in the domestic money market, led to a liquidity squeeze in the stock market and prompted retail investors to sell shares.Hideyuki Ishiguro, a strategist for Okasan Securities said: “Investors are worrying that China could raise interest
rates after announcing its purchasing managers’ index tomorrow.”
Oil prices ended up lower, as concerns that Europe’s debt crisis will widen battered the euro and added to ongoing concerns about China’s economic growth. Oil and dollar-denominated commodities often move inversely to the dollar.Chris Dillman, analyst at Tradition Energy in Stamford, Connecticut said: “Crude sold off mainly on the concerns about the euro zone economy and the Shanghai index slipping didn’t help.” The US Treasury Market   rose for a third day on speculation a debt crisis in Ireland would spread to Portugal and Spain, increasing demand for the relative safety of US debt.
Gold prices were seen on a steady note as a sharp decline of the euro and signs of a deepening euro zone’s debt crisis prompted investors to buy gold to hedge against currency and economic uncertainties.Gold benefited from investor fears that Ireland’s debt problems, could spread to other bloc members such as Portugal
and Spain, and borrowing costs of other countries shot higher.Frank McGhee, head precious metals trader of Integrated Brokerage Services said: “When the euro slipped under .30 range, it triggered a new wave of safe-haven buying. If you are holding your assets in euro, you are very afraid.”
The euro was down against the dollar as fears about euro zone sovereign debt prompted widespread risk aversion. A financial rescue deal for Ireland failed to contain contagion fears as the euro fell below the critical .30 level and investors took out many options barriers on the way.Peter Schiff, chief executive officer at Euro Pacific Capital said: “Europe is making some very bad decisions with respect to the whole region and the currency. They should not have bailed out Greece and Ireland, they should have allowed them to restructure their debt, and allowed their bondholders to take losses. Countries would now want to go into debt because they want those bailouts and the countries that are responsible get stuck with the bill.

B Satya Kishore

http://www.gnutrade.com


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Dollar Euro Exchange Rate Graph – Knowledge is the Key to Success


 

Dollar Euro Exchange Rate Graph – Knowledge is the Key to Success

Dollar Euro Exchange Rate Graph

Today, the Forex market is the largest market in the world with more than 1.8 trillion dollars changing hands daily. With its attractive features like super liquidity, 24 hours market and better execution, it is also considered as one of the most striking and rewarding market. But is it very difficult to make money in the Forex market? Definitely not, provided you know all about Forex and currency trading. Dollar Euro Exchange Rate Graph

In the Forex market, if you look at the performance graph of Forex brokers, you will see that some traders succeed while others fail to trade successfully. The main reason is lack of proper trading knowledge.

That means they are trading currencies but they don’t know all about Forex and currency trading. Therefore it is very important to know everything you can about Forex and currency trading before you start trading in the Forex market.

If you want to know more about Forex and currency trading, start with fundamental analysis and technical analysis. These are two major things that will help you to understand when the market will move up, what is the right time to buy or sell currency pairs, how to gain more profits and what are the currencies to be traded.

Fundamental analysis includes world news, studying variables like monetary and fiscal policy, political conditions, trade patterns, economic indicators, inflation rates, unemployment rates etc. Dollar Euro Exchange Rate Graph

On the other hand, technical analysis involves computer charting, using trend lines, support and resistant levels, reversals and numerous patterns, and studying the behavior pattern of market crowds to track and identify buying and selling opportunities.

As you enter into the realm of knowing all about Forex and currency trading, you will have a good idea about the major currency pairs that are traded in the Forex market. Among all the traded currencies, currencies that are most liquid and often traded along with the US dollar are:

European Euro

Japanese Yen

British Pound

Swiss Franc

Canadian dollar

Aussie dollar Dollar Euro Exchange Rate Graph

Generally the most commonly traded currencies are those of countries with stable governments, reputable banks and low inflation.

As you gradually come to gain knowledge, you will understand that your success rate will be high if you follow the Forex trading system. The system has its own discipline that it follows rigorously. The system will let you know what are the trades that have greater rate of success and will send signals accordingly.

The Forex market is global and it is a 24 hour market. You can access Forex market anytime; don’t worry if it is night at your place, it will be daytime in some other parts of the world and trade is ongoing over there. So if you know all about Forex and currency trading, you can easily use your online currency trading system and start trading.

The major dealer centers and time zones are that of Sydney, Tokyo, London and New York. However, since the markets are interconnected, if any events occur at any hour, in any part of the globe, the investment community gets affected instantly.

Trading successfully in the Forex market is not an easy task. However, if you know all about Forex and currency trading your success rate will be highly influenced. Dollar Euro Exchange Rate Graph

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Beware of Trading the Euro Forex Markets


 

Beware of Trading the Euro Forex Markets

Greece’s national debt crisis has been discussed at length in every National newspaper in Europe. The fact that Greek debt could be contagious and affect Portugal, Spain and even Italy has also been discussed in detail. Most articles have covered the fact that the problems will weaken the Euro. There is nothing astounding in any of this. At least not until you notice how the various blogs and newspaper articles are covering the Euro angle.

Until recently, all of the Euro-is-in-trouble stories were in the future tense. The problem now is that the articles have, to a greater or less degree, changed to the present tense.

The Euro has been drifting against the Dollar and Yen for some time. It looks like the bears, who have been speculating on the Euro to drop against the Dollar, have got their way. The target seemed to be the .2350/.2450 region and that target has now been achieved.

Forex speculators are often aggressive though and it looks like they have set the .1600 level as their next target. Articles in some of the leading newspapers across Europe are even predicting parity with the US Dollar.

As Simon Denham of Financial Spreads recently commented, “Parity is not as outlandish as it might appear. Back in 2000-2002 the Euro was well below ’1 Euro to 1 Dollar’. The historic low was actually .8230 back in October 2001″.

“It should also be noted that in 2008 the European single currency fell from .6000 to .2330, a 23% decline. So far the 2010 collapse has knocked 19% off the Euro/Dollar rate”.

Ordinarily I am a little nervous about forex projections that would push currencies into uncharted territory. Merely going over old ground is not so difficult to accept.

Having said all this though, the more people talk about a particular event occurring in the financial markets the more there seems to be a general correlation with that event failing to occur. It was when the world and his dog started talking about Sterling parity with the Euro a year or so ago that support for Sterling appeared.

If you are looking to trade the foreign exchange markets, either through forex spread betting or margined Forex, you will need to be careful. You are generally trading the markets to 4 decimal places and with the markets looking volatile, and prone to corrections, even small movements can catch out the unwary.

Let’s hope that the newspapers start referring to the Euro’s problems in the past tense and we can all enjoy a little more stability in the markets.

Situated in the centre of London’s financial district, Daniel Jones is a seasoned spread betting professional and commentator on some of the leading financial spread betting sites.

 


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Trading the Forex Safe Haven Markets


 

Trading the Forex Safe Haven Markets

The markets are looking increasingly nervous and the safe haven currencies are back in vogue. Bad news across the markets, from BP’s continued woes to poor data out of China, is leading to an outbreak of risk aversion. This can clearly be seen in the forex spread trading markets.

The US Dollar is often seen as a safe haven currency. However US stimulus plans and poor unemployment data is worrying investors.

The Swiss Franc used to be seen as a safe haven until the Swiss National Bank (SNB) started pegging the currency to the troubled Euro. Having said that, the SNB has recently implied that it will let the Franc float more freely and that there will be no such pegging to the single currency. This de-coupling has seen the Swiss Franc swiftly appreciate, although there is a risk that the SNB will start intervening again.

According to David Evens of BetOnMarkets, “The number one safe haven currency though, continues to be the Japanese Yen. With more poor data out of China, the Australian Dollar/Yen rate has dropped. The Australian economy is heavily dependant on its commodity exports to China. This in turn means that the Australian Dollar market is a way to speculate on the Chinese economy. Any weakness in Chinese manufacturing or export data translates into weakness for the Australian Dollar”.

The problem for Japan though is that the currency is seen as a safe haven. No doubt they would like a weaker currency. Indeed, earlier in the summer the Yen was looking troubled after the Japanese Prime Minister resigned. He was replaced by the Japanese Finance Minister who talking tough about weakening the Yen in order to reduce the continued threat of deflation.

As Simon Denham of Capital Spreads recently commented, “the political uncertainty has played on the Japanese currency, rather like the uncertainty that Sterling suffered in the run up to the UK general election. Nevertheless a weaker Yen is important for Japan’s exporters. There has even been talk that a new government will be reluctant to deal with the country’s public debt problems, which might lead to a credit rating downgrade and further Yen weakness, although this theory seems somewhat extreme”.

If this does happen and the Dollar/Yen rate edges higher then we are likely to see price resistance at ¥93.00. If that level is broken then the bulls will be targeting ¥95.50 and then ¥97.50.

With US debt problems though, it is strange that the Dollar was seen as a safe haven and appreciated so much in the first half of 2010. More recently though that sentiment has completely reversed and it is the turn of other currencies to strengthen, in particular the Yen.

Note that the US Dollar weakness hasn’t just boosted the Yen, the recent strength in both the Euro/Dollar and Pound/Dollar rates have also been down to the US currency. The Dollar has felt the brunt of the selling in line with the equity market over continued global economic problems.

Based in the heart of London’s financial district, Daniel Jones is a seasoned trading professional and commentator on some of the leading financial spread betting sites.


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Binary Trading on Forex Options ? The Money Market explained


 

Binary Trading on Forex Options ? The Money Market explained

Binary Trading on Forex Options – The Money Market explained

The forex market is the biggest and most liquid market in the world and offers great opportunities of high returns for those who trade in it.

Historically speaking, small time investors were not able to trade in the forex market, the minimum transaction sizes and strict financial requirements being too high for smaller investors to consider, leaving forex trading to banks and major currency dealers. As such, they were the only ones who could take full advantage of the incredible liquidity of this market. Fortunately for us nowadays, new technology has allowed the barriers to be broken down for smaller traders to grab a piece of the action.

This is obviously great news for us binary option traders who can now take full advantage of these high yield return forex options and with the bonus of trading with smaller amounts within short-term expirations.

Let’s take a closer look into the forex, the motherboard of forex options trading and learn a little more about this exciting market that is unlike any other market you might trade in. Forex, also known as the FX market or the foreign exchange market runs 24 hours a day, five days a week and connects the world with financial transactions, allowing banks and other institutions to easily buy and sell foreign currencies.

The exchange rate of currencies rises and falls according to the state of the market so a currency’s value will rise if the market’s demand for it exceeds the available supply and will fall if the demand is lower than it.

So when you trade binary forex options, you can purchase Call or Put options on leading currency pairs such as the US dollar against the Euro. The difference when trading in the forex is that you are predicting one currency’s rise or fall against another’s, rather than the rise or fall of a single stock or commodity which comes with other trading.

As currencies always trade against one another, if one currency isn’t doing well it means that the opposite currency is doing that much better giving headway to a profitable outcome. So if you do your research and follow the market, you could put yourself in a good position to strike while the iron is hot and come away in the money.

Here at anyoption we offer forex options trading on 11 different currency pairs, from the Euro against the British pound to the US dollar against the South African Rand. The forex reflects how much of one currency is needed to purchase a unit of the other currency. So let’s take the Euro (EUR) against the British pound (GBP) for example i.e. EUR/GBP. The first currency (in this case the EUR) is known as the base currency and the second one the quote currency.

The stronger the base currency, the higher the number of the quote currency (i.e. It will take more GBP to buy Euros). The way the expiry level of the pair is calculated is the total of the ASK value and the BID value divided by two and rounded up or down at the fifth decimal digit.
Here’s an example of how trading in binary forex options is a safe bet when investing in the forex. Let’s imagine that you decide to trade on the EUR/GBP after reading some news the other day that the Euro is expected to fall. So you predict that the EUR will continue to fall against the GBP and purchase a PUT option of 0 on a one hour expiration option which currently stands at 0.83570.

If the pair expires even 0.001 below the strike price then you will walk away with 0 (0 your original bid and 0 profit). To cover your back further you could hedge the trade with a CALL option alongside the PUT option. So if the pair was to expire above the strike price you will not be at a complete loss. Trading made easy.

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Trading The Pound Sterling / Dollar Forex Market


 

Trading The Pound Sterling / Dollar Forex Market

We are now well into 2010 but the median price for the key Pound/Dollar forex market has been .6400 since May 2009.

The market has consistently oscillated around the .6400 mark. There have been a few breaks above .6600 and the odd peak below .6000 but we continue to oscillate.

In trading parlance, support levels have held and then given up the ghost. They have then become resistance levels, those resistance levels have then done the same thing. The cumulative effect has been the most minor of moves.

With Goldman Sachs, and others, estimating that the UK economy will grow faster than many in 2011, perhaps the rumours of Sterling’s death have been greatly exaggerated.

The excitement of such positive predictions has bolstered Sterling. In contrast, the Euro has rather been left behind as the tensions in the EU project have come to the fore.

Having said that, it is difficult to be too negative on the Euro. The smaller nations causing the problems are not particularly significant to the total European Union GDP.

The woes over the whole issue will only grow if the European Central Bank does not play a strong-arm policy. At the moment Jean-Claude Trichet, president of the European Central Bank, and others are, indeed, playing hard ball. They are doing this for the fiscal security of the larger nations and we shall have to hope that they continue to do so.

But still the currency markets seem to be in two minds as to the currency of choice. Sterling looked dead and buried in 2009 and the start of 2010 saw a stronger Dollar.

Given the problems hanging over Greece, Portugal and Ireland that have dominated news flows, the target of Sterling parity versus the Euro has drifted away from dealer’s radars as well.

But away from the populist headlines Sterling has appeared more solid. This continued to be the case when the ECB sent out the message that rates in Europe will, probably, remain at 1% throughout 2010. This was also the case when Sterling had a good day after the hawkish comments from Bank of England policy setter Andrew Sentance.

Yes Sterling has benefited from the woes of the Euro. However, more recently the UK has seen a surprise jump in inflation. That gave the BoE enough evidence that the UK stimulus has to stop.

As Simon Denham of Financial Spread commented, “UK inflation should be capped and the rate of inflation should only be a temporary spike. The VAT hike will also apply pressure. The UK’s growth prospects do not warrant inflation to remain higher for long”.

Perhaps Mr Denham is suggesting that UK rates will also remain low and not support the Pound for long.

Having said all this, whether you are trading the Forex markets or spread betting on Pound/Dollar markets you need to be careful. Forex markets are rarely a one way bet. Like inflation they have a habit of spiking when you least expect it.

A leading financial author based in the heart of London’s Canary Wharf. Thomas Bainbridge is a respected commentator on the UK financial markets including the spread betting and share trading markets


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The euro resists bank panic


 

The euro resists bank panic

Red Alert. There were the “three witches”, a name given to the day when the maturities of three major futures coincide, there are now three witches, the one called the day on which banks are facing their (d) Targets Dominique Strauss Kahn, IMF managing director, Jean Claude Trichet President of the ECB and Christian Noyer, head of the French BdF … These three – in passing – will want reassurance after the heavy fall in U.S. stock and Europe, including the CAC 40 in Paris, which has lost more than 4%. On behalf of Coue method, the central bank also European hammered the banking system will not be disturbed by the maturity of the loan outstanding on Thursday of 442 billion euros last year awarded more than 1100 commercial banks. The Governor of the Bank of France for its part said that banks are able to repay loans. As a member of the Governing Council of the ECB, he even added “we will ensure that there is no problem and it all goes well.” Moreover, market participants noted, the ECB will offer banks unlimited funds at three months, so the dreaded collapse as feared, can not happen … From his perch U.S. DSK also addressed the markets. The IMF chief said that “the recovery will continue and there will be no double-dip recession.” It is true that poor indicators published recently in China and the United States have revived fears about a slowdown in overall economic growth. Pending the opening exchanges, the euro entered Wednesday morning up slightly to 1.2213 dollar against the euro, after falling the previous day to 1.2152 dollars, its lowest level since June 14 Note that given the yen, the euro also resumed Tuesday after falling 107.32 yen its lowest level since November 15, 2001. As the yuan, Chinese currency finished at 6.7977 yuan to one U.S. dollar against 6.7959 yuan on Monday. …

Listed oil barrel prices retreated sharply Tuesday 75 dollars in New York, in a market worried about the growth of the Chinese economy. As for “Alex” went from tropical storm to hurricane late Tuesday, the first of the season in the Atlantic, he has forced BP to reduce its oil recovery operations in the Gulf of Mexico, where the U.S. will use the assistance offered by twelve countries in the fight against the oil spill.

CHANGES: retreat controlled. The euro retreated sharply against the U.S. dollar Tuesday and the yen, against a backdrop of heightened anxiety in financial markets about the strength of the recovery of the global economy, which drove investors to safe-haven assets.
Around 2100 GMT (2300 Paris), the euro stood at 1.2186 dollars against 1.2276 dollars late Monday, after falling during the day at 1.2152 dollars, its lowest level since June 14 Facing the yen, the euro dropped to 107.93 yen also cons 109.68 yen on Monday, falling 107.32 yen even at its lowest level since November 15, 2001. The dollar also dropped against the yen at 88.57 yen 89.35 yen against Monday. Around 2100 GMT, too, the British pound gained some ground against the euro at 80.86 pence per euro, after touching 80.67 pence, its strongest level since November 7, 2008. The book, however, lost some ground against the greenback at 1.5067 dollars.

TO KNOW: “the dollar remains a barometer of safe haven currencies,” said Jessica Hoversen, the brokerage firm MF Global. “Despite the huge deficit at the federal level, and the slowdown in growth (the U.S.), it is supported by interest in blue chip stocks. “The market does not evolve according to the fundamental (economic), but depending on investor appetite for risk,” she added.
The dollar has suffered a wave of general anxiety about the global recovery, which has driven down stock markets worldwide, and a surge in U.S. government bonds, securities safe haven, to new heights. The confidence of financial markets was “shaken by renewed concern over China’s growth, which could be slower than expected,” said Jane Foley, analyst at Forex.com

The economic institute Conference Board has revised downward its composite index on the growth prospects of China for the month of April, reduced to 0.3%, against an initial estimate of 1.7%.

“China is the main engine of global recovery and loss of trust concerned,” Derek Halpenny noted, an analyst at Bank of Tokyo-Mitsubishi, especially that “fears about Chinese growth coming week when the European Central Bank ( BCE) saw its refinancing operation one year to expire Thursday. ”
More than a thousand banks in the euro zone must repay Thursday a total of 442 billion euros at the ECB, and the market is showing “very nervous” before the deadline for the key European financial sector, has held Ms Hoversen .
The news from the United States has not reassured the index of consumer confidence from the Conference Board has relapsed to 52.9 points, its lowest level since March.

PETROLEUM: retreating controlled. Oil prices retreated sharply Tuesday in the opening exchanges in New York, in a market worried about the growth of the Chinese economy. Around 1:10 p.m. GMT on the New York Mercantile Exchange (Nymex), a barrel of light sweet crude for August delivery traded at 75.71 dollars, down 2.54 dollars compared to the previous day.

TO KNOW: “The market is showing concern for the growth in China,” noted Phil Flynn of PFG Best Research. “Some signs suggest that it begins to slow. The Shanghai Stock Exchange ended down 4.27% Tuesday after the downward revision of the Conference Board composite index for China to 0.3% in April, against an initial estimate of 1.7% . Another source of concern, the Agricultural Bank (AGBANK), which must go public, has set an IPO price in Shanghai lower than expected, dealers said. China should concentrate two-thirds of the growth in energy demand in the coming decade, which makes the oil market very sensitive to any sign of slowdown in the country.

The course thus pursued their downtrend started Monday, after jumping over the weekend as Tropical Storm Alex approached the Gulf of Mexico. Alex generates winds of about 110 km / h, according to the U.S. weather service, who believe it should turn into a hurricane Tuesday. But “it is now clear that Alex will not seriously disrupt the production of the Gulf of Mexico,” said Phil Flynn. “The cleanup of the oil spill from BP will be can be a bit slow, but overall, it could have been worse.” Some oil companies have evacuated staff from some of their platforms in the Gulf as a precaution, but the storm should stay away from most areas of hydrocarbon production. “The short-term impact of an active hurricane season on oil supply will be minimal, mainly because of the propensity of the U.S. government to tap into strategic reserves in these cases, have felt the Barclays analysts Capital. “However, this adds to the volatility of oil prices.

NOTE: Alex dropped from hurricane to tropical storm Tuesday night, the first of the Atlantic season, has forced BP to reduce its oil recovery operations in the Gulf of Mexico, where the U.S. will use the Assistance by twelve countries in the fight against the oil spill.
“The United States will accept twenty-two proposals for assistance from twelve countries and international organizations, said Tuesday the State Department said in a statement, adding that high-speed boats to recover surface oil booms and fire proposed by Japan were part of the proposed aid. With winds near 120 km / h and gusts even higher, Alex, now a hurricane of category, is now threatening the coasts of Mexico and Texas, said Tuesday the National Hurricane Center (NHC).

Furious failures of BP in the fight against the oil spill, frustrated by the attitude of Barack Obama, elected officials in Louisiana are taking matters in hand. “Further strengthening is expected” before the hurricane makes landfall, the NHC expects that Wednesday night, near the US-Mexico border. Alex is moving westward and is not expected to turn toward the area of the spill, where he will still feel.

By Wednesday, waves 3.5 meters high are expected in the area. “Part of the recovery of oil to the surface of the water can occur when the sea is big,” explained a spokesman for BP. The hurricane will also delay the introduction of a third vessel recovery of crude, the Helix Producer. Between 30,000 and 60,000 barrels of oil escaping from the well every day, and the Helix Producer should be increasing total capacity to recover between 40,000 and 50,000 barrels per day by early July, up 25,000 cons present with two other buildings.

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Financial Bailout Package


 

Will Ireland’s reluctant receipt of a financial bailout package ease the pressure on the Eurozone peripheral debt market?

The single European currency has made huge gains over the past few trading sessions however a continued theme looks unlikely. With negotiations between Ireland, the ECB and the IMF over, now the discussions regarding specific backing will no doubt drag for several days, if not go into December, so forex traders will probably look at current rates to go short on the euro. The theory being that contagion from Ireland is already in place and that interest will now move to Iberia as the next in the firing line for financing difficulties.
>>>>>Tim will give you more info on the podcast >>>>>> just click on the big arrow >>>


 

Euro Trading Sees USD on the Back Foot Again


 

The euro has gained against the US dollar but this is not likely to be sustained.

19, November 2010

Earlier this week we saw a squeeze higher on the USD catalysed by good US retail sales numbers at the close of last week but more so through the concern over Ireland tripping into USD strength. Today the market is appeased as a bailout is inevitable – ECB and IMF officials are looking into the formalities of what will be needed for the Irish economy.

The euro has pushed higher on this realisation trading back up to 1.37 against the USD supported by middle-eastern buying. The key question is will confidence remain in the Euro arena – according to Citigroup Inc and Nomura Plc it is a no. They say that relief will be short-lived as attention turns to who is next and all fingers are pointing to Portugal. The Portuguese Finance Minister said that while “there is a risk of contagion”, that does not mean that the country will seek financial aid- so the merry go round could start again.

On top of the bailout plans the Ireland will also announce a 4 year fiscal plan to help steady the ship. Although Dublin insists that there is no threat to Ireland’s 12.5% corporation tax, the mood over the loss of economic sovereignty was summed up by Mary Lou McDonald from Sinn Fein who stated “Officials from the EU and IMF and any other vultures circling around this country should be told to get lost”. Tough times ahead for Ireland and there is still a possibility that sovereign issues will continue to weigh on the euro for some time to come.

Focusing on the UK, retail sales rose for the first time in three months, by 0.5% providing a much needed boost as we approach the Christmas period. The pound has also been lifted on the news of a bailout for Ireland – the UK is exposed to Irish debt and this led to sterling weakness earlier in the week which has now been somewhat lifted.

A very quiet day ahead with no economic releases due, however there are a few speeches this afternoon from ECB, MPC and Fed officials. The speech from Ben Bernanke of the Fed will be the highlight as he steps up his defence of the latest round of Quantitative Easing for the US economy.

Report by Phil McHugh

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Euro Trading News: EUR/USD – Euro Hits 8 Month High


 

The possibility of a second round of quantative easing in the US has led to the euro trading at an eight month high in euro to dollar news. The Non-Farm Payroll figures  due out on Friday are not likely to defer what seems like the inevitable by the FED, for too long.

6, October, 2010

The Eurodollar surge continued in overnight trading where comments from Chicago’s FED President Charles Evans further indicated that the US might be entering quantitative easing for a second time. His message that the Central should do “much more to spur the economy” has echoed rumours and quotes from other figures back up the need for QE2 in the States.

With the Chinese currency situation at a standoff and the Middle Kingdom refusing to devalue the Renminbi, the FED has been exploring other ways of weakening the Dollar to improve the desirability of buying from the US. The speculation surrounding QE2 has led to Eurodollar hitting 8 month high of 1.3873 and likelihood is we could be seeing 1.40 in the not to distant future. A whole raft of data involving the US is due this week, but the main indication for Bernanke and Co will be Friday’s release of Non-Farm Payrolls due out at 1.30pm UK time. It is expected to show an increase of 3,000 jobs in September vs August, but a negative figure for this and a revision of last months number would show the FED they need to act soon to support their ailing economy.

This mornings Eurozone GDP data did little to move the markets with the QE2 issue still controlling volatility. The results of 1% QoQ and 1.9% YoY were bang in line with expectations and as a result, the markets didn’t register the announcement with a reaction. Yesterday, following a gentle slide in the morning, the euro rallied on Eurozone PMI reports for September as they showed economic activity in the area was gaining traction.

The PMI Services and Composite readings for last month both rose to 54.1 with individual readings for Germany rising by a greater amount. The French reading dipped slightly, but maintained a far stronger pace of expansion than in any other Eurozone nation. A separate report showing retail sales dipped during August across the Eurozone was largely overlooked in the context of today’s survey data.

A positive surprise for the British economy came in the form of jump in the PMI Services reading for September when analysts had expected a fall. The index rebounded from a slip towards a standstill for the sector and improved to 52.8 from 51.3. The pound shot up from on the strength of the data, which economists reckon now reduces the likelihood of further quantitative easing in the UK.

The rate and policy decisions by the Bank of Japan in their last ditch attempt to boost their economy and weaken the Yen seem to have failed miserably. Whilst the BoJ’s move initially helped export-oriented stocks traded on the Nikkei, the Yen’s decline proved short-lived and it quickly moved back to ¥83 versus the Dollar.

Report by Tim Lewis

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Euro Trading News: Euro to USD


 

1, October, 2010

It’s a brand new month, but the underlying issues from September are still controlling the markets. The question is why is the Euro so strong and how long will this rally last?

Rumours have been circulating the markets for months now about whether the FED will go into a second round of quantitative easing. A move into QE2 would weaken the Greenback significantly and as a result, investors are running scared into the Euro. Why would they do that I hear you ask? The Euro should be tumbling, downgrades in Spain and a bailout of Anglo Irish which totals more than the entire tax income of Ireland. The single currency should be sitting unclaimed in the lost and found with the Dollar.

The problem for the USD holders is that selling vast amounts into many other currencies will push those markets through the roof thus costing them even more to get rid of their Dollars. Euro to USD is the most liquid pairing of them all and as a result, traders have moved billions of USD into Euros. As a result, Cable has shot up back towards the 1.60 level again, but Sterling-Euro is trading on 3 months lows.

Yesterday afternoon, we had some very positive data from the FED with the GDP figure coming in at 1.7% ahead of a forecast of 1.6%. Strong figures from the jobs market and the Chicago PMI strengthened the Dollar over 2 cents against the Pound and as a consequence, squashed Sterling-Euro down below 1.15.

Don’t count on these optimistic announcements to calm fears of QE2 as most data has been revised in the weeks following the initial release. Cable has since rebounded this morning towards where it was trading before the US figures, which is further proof the Greenback is the weakest of them all at the moment.

With plenty of data due out today, volatility will continue to rule the markets, but it leaves us with a new question, when will the madness of Euro to USD end? The likely answer to that lies with Bernanke and Co and any comments they make over the next month. If the positive figures keep on coming and withstand the recent battering of downward revisions, QE2 could be avoided.

But, with a struggling economy and threats from China with the undervalued Yuan, you get the feeling the FED wouldn’t mind devaluing the Dollar making importing from the US more desirable and propping up their fragile financial system.

Report by Tim Lewis

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Euro Trading News:Euro Value Remains High


 

24, September, 2010

The big question economists are asking how long the recent Euro strength / Dollar weakness will last?

Price action topped at 1.3438 yesterday despite weaker Eurozone data in the form of Eurozone PMI. The rate held above 1.3335 which, coincidentally was the exact level we were at in August before the Euro decided move south and dip to 1.2600. Today is a quiet day in terms of data, the current level could make the German IFO release at 9.00am this morning very interesting.

Once again, the potential difficulty is the future expectation component and if, as seems likely, the position for the German economy remains ominous, coupled with the concerns over Eurozone sovereign debt issuance requirements, the present value of the Euro may demonstrate a little over reaction. However, numbers in line should see EUR/USD have another quick sniff at 1.3400.

The Far East session was again destroyed by holidays but what promised to be a ordinary trading period was enlivened by a swift leap in USD/YEN from 84.50 to 85.30 in the matter of half an hour, intervention perhaps? No comment was the official response (which would be surprising if the BoJ had been involved ie why try and push the rate and then deny it?) and so the market spent the next couple of hours allowing the cross to ease back to the 84.60 level.

With no additional action, it looks as though the move was just a business-related backed move but the European traders will remain cautious this morning. The BoJ are nothing if not consistent and if it was them earlier on, then they will be expected to mirror their previous attempt at currency manipulation on 14th September by overruling again in Europe and also in New York.

Today is quiet other than the German data we have to look out for durable goods and new home sales figures from the US. The previous is an extremely unstable and mostly ignored release whereas traders will wish that the housing numbers reflect yesterday’s better performance for the property market.

Commodities remain strong, with Gold the headliner. This continues to wend its way higher but other less high profile assets are also making waves. Silver is now at a 30-year high, again with further to go, and the entire commodity scenario argues for continued gains in the Aussie and Canadian currencies.

Have a good weekend!

Report by Philip Ryan

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Euro Trading News: Euro On Five Week High


 

20, September, 2010

The dollar has fallen towards a five-week low against the euro before a report today that may show that the U.S. housing market remains weak, adding to evidence that the world’s largest economy is slowing. The U.S. currency weakened versus 12 of its 16 major counterparts on speculation that the Federal Reserve’s Open Market Committee will also confirm that it is considering further measures to keep borrowing costs low at their meeting tomorrow.

In the U.K, data released this morning has revealed that home sellers lowered asking prices for a third month in September, wiping out half of the gains made since the start of 2010. Average asking prices in England and Wales fell 1.1 percent from the previous month and 3.4 percent over the last three months according to Rightmove, the operator of Britain’s biggest property website. A pickup in the supply of homes for sale is putting downward pressure on prices, while curbs on lending by banks are crimping demand. Bank of England Governor Mervyn King noted last week that bank balance sheets “are not in tremendously robust shape,” and that this may continue to restrain lending.

The Australian dollar has increased towards a two-year high after central bank Governor Glenn Stevens signalled earlier this morning that policy makers may need to resume raising interest rates should a mining boom stoke the economy next year and boost inflation. The currency has gained 6 percent so far this month as traders increased their assessment of the chances that the Reserve Bank of Australia will increase their benchmark rate on 5th October to 29 per cent.

Today, the economic calendar is again very thin. In US, the NAHB housing market index will be published whilst in the UK, M4 money supply data will be released. Global factors will continue to guide the price action on markets so market chatter on government finances of countries like Ireland and Portugal may continue to weigh on sentiment.

Report by Tim Lewis

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Euro Trading News: Euro Falling Against The Dollar


 

23, August 2010

Reports today suggest the forex market analysts are the most pessimistic on the Pound since May 2009, predicting the Chancellor’s cuts will eat into economic growth, the already soft economic recovery is forecast to slow causing Sterling to fall back against both the Dollar and Euro. Median estimates suggest the Pound will drop 8 per cent against the Euro by year end as the recent bullish UK data starts to deteriorate.

The US Dollar rose sharply on Friday against the Euro, Sterling, Aussie and Candian dollar on the back of risk aversion, while safe haven currencies such as CHF and the YEN strengthened against the dollar.

The Fed is perceived by the markets to be in a holding pattern until further directional economic data is released. Weakness in global equities carried through to European markets sending major indices lower while US stocks are lower as the sell off continued. The current lack of Tier 1 economic data out of the US is putting the focus on the equity markets.

The Euro fell against a basket of currencies on Friday and remains on the defensive this morning as comments by a senior ECB official fuelled expectations for liquidity to remain a concern for the single currency. ECB Governing Council member Axel Weber told Bloomberg in an interview published on Friday it would be “wise” to extend unlimited liquidity to banks past the end of 2010.

The Euro was further hit after the US Federal Reserve said the US and global economic recovery was losing steam, striking a nerve with investors. The euro zone is seeing an increasing split not only in banking but in the economy in general. While the euro zone economy improved in the second quarter with Germany setting the tone, southern Europe recorded much more muted growth. Market analysts believe the ECB may have little option but to keep flooding the money market with cash to help banks and governments in the EU.

The Euro zone economy will remain under the spotlight today with the release of the flash August euro zone PMI’s which are expected to fall back from 56.7 in July to 55.5. In the US the focus will be on the release of housing and labour market figures. On Friday of this week the focus will be on the UK with the release of Q2 GDP growth figures.

Report by Alistair Cotton

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