After a series of positive domestic reports, the Mexican currency extended its previous gains climbing further versus the U.S. dollar as investors are more confident to invest in the Latin American nation.
The peso touched a three-month high versus the U.S. dollar after consumer confidence and home sales in the country came better than expected, helping the Mexican currency to advance against a weakened dollar, that also touched record lows versus several other currencies.
USD/MXN closed at 12.85 today from a previous close of 12.93 yesterday.
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.
Wednesday, November 25, 2009
Japan Flip-Flops on Forex Intervention
In my report on last month’s Japanese election, I noted that the newly-appointed Japanese finance minister, Hirohisa Fujii, had spoken out against forex intervention. With that, it seemed the matter was closed.
But not so fast! Over the following few weeks, Fujii (as well other members of the new administration) moved to clarify his position, backtracking, sidestepping, contradicting, but never going forward. The following is a summary of selected remarks, beginning with the original statement against intervention and ending in what seems like a promise to intervene:
September 15: “I basically believe that, in principle, it’s not right for the government to intervene in the free-market economy using its money, either in stock or foreign-exchange markets.”
September 27: [The Yen's rise is] “not abnormal…in terms of trends.”
September 28: “That’s not to say I approve of the yen’s rise.”
September 28: “I don’t think it is proper for the government to intervene in the markets arbitrarily.”
September 29: “If the currency market moves abnormally, we may take necessary steps in the national interest.”
October 3: “As I have said in Tokyo, we will take appropriate steps if one-sided movements become excessive.”
October 5: “If currencies show some excessive moves in a biased direction, we will take action.”
Confused? I know I am. Is it possible to glean any semblance of meaning from these remarks? Summarized one columnist, “Hirohisa Fujii has gone through several cycles of remarks that first appeared to favor a strong yen and then seemed to backpedal after markets took him at his word and sent the Japanese currency soaring.”
I think this encapsulates the regret that Minister Fujii must have felt, after his original comments were taken a little too seriously. In hindsight, it appears that Fujii attempted to convey the new administration’s stance on forex, in a nutshell, and certainly didn’t expect that investors would run wild and send the Yen up another 4%, bringing the year-to-date appreciation against the Dollar to 15%. In the words of the same columnist cited above, “Japan’s finance minister has been rudely reminded of the cardinal rule when speaking to markets — less is more.”
So where does Fujii actually stand? I would personally hazard to guess that his original explication is still the most accurate portrayal of how he will tend to the Yen while in office. The former Liberal Democratic Party (LDP) administration intervened several times while in office (once under the direction of Fujii himself!) and most recently in 1994. Despite spending trillions of Yen, the campaign only marginally stemmed the rise of the Yen.
Meanwhile, the Japanese economy has been mired in what could be termed the “world’s longest recession, dating back to the 1980’s. It’s clear that the cheap-Yen policy, designed to promote exports, hasn’t benefited the Japanese economy. The new administration, hence, has indicated a shift in strategy, away from export dependence and towards domestic consumption.
Ironically, the nascent Japanese economic turnaround is once again being driven by exports. Fujii is no doubt cognizant of this, and doesn’t want to jeopardize the recovery for the sake of ideology. For example, Toyota Corporation has indicated that a 1% appreciation in the Yen against the Dollar costs the company $400 million in operating income. In addition, while a strong Yen increases the purchasing power of Japanese consumers, an overly strong Yen can lead to deflation, as consumers forestall spending in anticipation of lower prices down the road.
In other words, Fujii is certainly not a proponent of Japan’s recent runup, but his stance is more nuanced than initially understood. “Fujii is basically saying currencies should reflect economic fundamentals and that it is wrong to manipulate their moves to lower the yen for the sake of exporters,” offered one strategist. This, the markets finally seem to understand, and the Yen has actually reversed course over the last week. After all, “A yen in the 80s is excessive,” given the context of record low interest rates and a economy that is still contracting.
In the near-term, then, it doesn’t even make sense to talk about intervention. It seems the markets were getting ahead of themselves in this regard. It doesn’t make sense to price out the possibility of intervention when interevention shouldn’t be a factor in the first place. If on the other hand, the Yen continues to appreciate, then Fujii may have consider how fixed his principles really are.
But not so fast! Over the following few weeks, Fujii (as well other members of the new administration) moved to clarify his position, backtracking, sidestepping, contradicting, but never going forward. The following is a summary of selected remarks, beginning with the original statement against intervention and ending in what seems like a promise to intervene:
September 15: “I basically believe that, in principle, it’s not right for the government to intervene in the free-market economy using its money, either in stock or foreign-exchange markets.”
September 27: [The Yen's rise is] “not abnormal…in terms of trends.”
September 28: “That’s not to say I approve of the yen’s rise.”
September 28: “I don’t think it is proper for the government to intervene in the markets arbitrarily.”
September 29: “If the currency market moves abnormally, we may take necessary steps in the national interest.”
October 3: “As I have said in Tokyo, we will take appropriate steps if one-sided movements become excessive.”
October 5: “If currencies show some excessive moves in a biased direction, we will take action.”
Confused? I know I am. Is it possible to glean any semblance of meaning from these remarks? Summarized one columnist, “Hirohisa Fujii has gone through several cycles of remarks that first appeared to favor a strong yen and then seemed to backpedal after markets took him at his word and sent the Japanese currency soaring.”
I think this encapsulates the regret that Minister Fujii must have felt, after his original comments were taken a little too seriously. In hindsight, it appears that Fujii attempted to convey the new administration’s stance on forex, in a nutshell, and certainly didn’t expect that investors would run wild and send the Yen up another 4%, bringing the year-to-date appreciation against the Dollar to 15%. In the words of the same columnist cited above, “Japan’s finance minister has been rudely reminded of the cardinal rule when speaking to markets — less is more.”
So where does Fujii actually stand? I would personally hazard to guess that his original explication is still the most accurate portrayal of how he will tend to the Yen while in office. The former Liberal Democratic Party (LDP) administration intervened several times while in office (once under the direction of Fujii himself!) and most recently in 1994. Despite spending trillions of Yen, the campaign only marginally stemmed the rise of the Yen.
Meanwhile, the Japanese economy has been mired in what could be termed the “world’s longest recession, dating back to the 1980’s. It’s clear that the cheap-Yen policy, designed to promote exports, hasn’t benefited the Japanese economy. The new administration, hence, has indicated a shift in strategy, away from export dependence and towards domestic consumption.
Ironically, the nascent Japanese economic turnaround is once again being driven by exports. Fujii is no doubt cognizant of this, and doesn’t want to jeopardize the recovery for the sake of ideology. For example, Toyota Corporation has indicated that a 1% appreciation in the Yen against the Dollar costs the company $400 million in operating income. In addition, while a strong Yen increases the purchasing power of Japanese consumers, an overly strong Yen can lead to deflation, as consumers forestall spending in anticipation of lower prices down the road.
In other words, Fujii is certainly not a proponent of Japan’s recent runup, but his stance is more nuanced than initially understood. “Fujii is basically saying currencies should reflect economic fundamentals and that it is wrong to manipulate their moves to lower the yen for the sake of exporters,” offered one strategist. This, the markets finally seem to understand, and the Yen has actually reversed course over the last week. After all, “A yen in the 80s is excessive,” given the context of record low interest rates and a economy that is still contracting.
In the near-term, then, it doesn’t even make sense to talk about intervention. It seems the markets were getting ahead of themselves in this regard. It doesn’t make sense to price out the possibility of intervention when interevention shouldn’t be a factor in the first place. If on the other hand, the Yen continues to appreciate, then Fujii may have consider how fixed his principles really are.
US Dollar: Same Old Story
These days, it’s hard to offer a fresh perspective on the Dollar. The factors driving its short-term momentum – namely low interest rates and its perception as a financial safe haven – have been in place for nearly a year. It’s long-term prognosis, meanwhile, also hasn’t changed much. Since the beginning of the decade, the Greenback has been in a state of perennial decline as a result of its twin deficits and the related notion that it will be soon be replaced as the world’s pre-eminent currency.
Since the last time I posted about the Dollar (October 6: Dollar’s Role as Reserve Currency in Jeopardy), then, there haven’t been many developments. Fears that oil will one day be priced and settled in an alternative currency – such as the Euro – continue to reverberate through the markets. Several ministers from OPEC countries have already officially dismissed such claims as baseless. A parallel debate is now taking place on the sidelines as to whether or not such a shift even matters.
Dean Baker argued in a recent article for Foreign Policy magazine, that pricing oil in Dollars represents a mere “accounting convention,” adopted by most simply by default, since the US is the cornerstone of the world economy. Argues Baker, “World oil production is a bit under 90 million barrels a day. If two-thirds of this oil is sold across national borders, then it implies a daily oil trade of 60 million barrels. If all of this oil is sold in dollars, then it means that oil consumers would have to collectively hold $4.2 billion to cover their daily oil tab.”
Unfortunately, Baker’s “simple arithmetic” is both erroneous and slightly irrelevant. Assuming a price of only $100 per barrel (pretty conservative if you believe the notion of peak oil), current consumption of 85 million barrels per day implies a daily turnover of $8.5 Billion per day, or $3+ Trillion per year. If the price doubles to $200 per barrel….well, you get the point.
Taking this line of reasoning further becomes somewhat problematic, however. First of all, while OPEC members currently hold the majority (70%+) of there reserves in Dollar-denominated assets, it’s unclear how this would change in the event that oil was no longer priced in Dollars. It’s conceivable that just as many of these Central Banks currently diversify their Dollar-denominated proceeds into other currencies, that they would “diversify” Euro-denominated proceeds back into the Dollar. Of course, it’s also conceivable that a combination of inertia and investment strategy would cause them to hold a larger portion of there reserves in Euros.
If OPEC Central banks continue to prefer Dollars, than Baker is right in arguing that the currency in which oil is priced has no implications outside of accounting. If, on the other hand, he is wrong, and a change in pricing causes/coincides with changing preferences, then the implications for the Dollar would be disastrous. [Consider that $3 Trillion/per year which is at stake currently represents more than 15% of total foreign ownership of US assets.] The problem is that we just don’t know.
Regardless, the status quo favors the Dollar, since creating a new reserve currency would take at least a decade, if not more. For that reason, the World’s Central Banks (we’re not just talking about OPEC anymore) continue to prefer Dollars. “In the five weeks through Oct. 7, foreign central banks bought more than $48.55 billion in Treasury securities, an average of $9.71 billion per week, according to the latest data from the Federal Reserve.” In addition, “Finance Minister Hirohisa Fujii said he expects the dollar will remain the key reserve currency for some time to come.” Private foreign investors, meanwhile, are dragging their heals a bit, perhaps waiting for the Dollar to fall further before jumping in. Asks one columnist rhetorically, “Why buy now if the dollar might be even weaker in six months’ time?”
What else is new? The US budget deficit came in at $1.4 Trillion for the fiscal year, the highest level since World War II. On the bright side, the deficit was $200-400 Billion less than earlier estimates. Meanwhile, members of the Federal Reserve’s Board of Governors restated the unlikelihood of higher rates in the immediate future. “Richard Fisher, president of the Dallas Fed and thought to be a rare hawk on the Fed’s Open Market Committee, chimed in that no one at the Fed thinks this is the time to raise interest rates.” Finally, the US trade deficit is once again narrowing, due in no small part to the declining Dollar.
At this point, it seems reasonable to assume that much of the bad news has already been priced into the Dollar. Sure, the Australian rate hikes came as a surprise and forced many to rethink their calculations. Investors have already begun to separate the healthy currencies from the sick (to borrow an analogy from a previous post), but that the Dollar would be grouped with the “sick” currencies has long been anticipated. Given that the currency has already fallen by double digits in 2009 and is nearing the record lows of 2008, some are wondering how long it can continue.
Since the last time I posted about the Dollar (October 6: Dollar’s Role as Reserve Currency in Jeopardy), then, there haven’t been many developments. Fears that oil will one day be priced and settled in an alternative currency – such as the Euro – continue to reverberate through the markets. Several ministers from OPEC countries have already officially dismissed such claims as baseless. A parallel debate is now taking place on the sidelines as to whether or not such a shift even matters.
Dean Baker argued in a recent article for Foreign Policy magazine, that pricing oil in Dollars represents a mere “accounting convention,” adopted by most simply by default, since the US is the cornerstone of the world economy. Argues Baker, “World oil production is a bit under 90 million barrels a day. If two-thirds of this oil is sold across national borders, then it implies a daily oil trade of 60 million barrels. If all of this oil is sold in dollars, then it means that oil consumers would have to collectively hold $4.2 billion to cover their daily oil tab.”
Unfortunately, Baker’s “simple arithmetic” is both erroneous and slightly irrelevant. Assuming a price of only $100 per barrel (pretty conservative if you believe the notion of peak oil), current consumption of 85 million barrels per day implies a daily turnover of $8.5 Billion per day, or $3+ Trillion per year. If the price doubles to $200 per barrel….well, you get the point.
Taking this line of reasoning further becomes somewhat problematic, however. First of all, while OPEC members currently hold the majority (70%+) of there reserves in Dollar-denominated assets, it’s unclear how this would change in the event that oil was no longer priced in Dollars. It’s conceivable that just as many of these Central Banks currently diversify their Dollar-denominated proceeds into other currencies, that they would “diversify” Euro-denominated proceeds back into the Dollar. Of course, it’s also conceivable that a combination of inertia and investment strategy would cause them to hold a larger portion of there reserves in Euros.
If OPEC Central banks continue to prefer Dollars, than Baker is right in arguing that the currency in which oil is priced has no implications outside of accounting. If, on the other hand, he is wrong, and a change in pricing causes/coincides with changing preferences, then the implications for the Dollar would be disastrous. [Consider that $3 Trillion/per year which is at stake currently represents more than 15% of total foreign ownership of US assets.] The problem is that we just don’t know.
Regardless, the status quo favors the Dollar, since creating a new reserve currency would take at least a decade, if not more. For that reason, the World’s Central Banks (we’re not just talking about OPEC anymore) continue to prefer Dollars. “In the five weeks through Oct. 7, foreign central banks bought more than $48.55 billion in Treasury securities, an average of $9.71 billion per week, according to the latest data from the Federal Reserve.” In addition, “Finance Minister Hirohisa Fujii said he expects the dollar will remain the key reserve currency for some time to come.” Private foreign investors, meanwhile, are dragging their heals a bit, perhaps waiting for the Dollar to fall further before jumping in. Asks one columnist rhetorically, “Why buy now if the dollar might be even weaker in six months’ time?”
What else is new? The US budget deficit came in at $1.4 Trillion for the fiscal year, the highest level since World War II. On the bright side, the deficit was $200-400 Billion less than earlier estimates. Meanwhile, members of the Federal Reserve’s Board of Governors restated the unlikelihood of higher rates in the immediate future. “Richard Fisher, president of the Dallas Fed and thought to be a rare hawk on the Fed’s Open Market Committee, chimed in that no one at the Fed thinks this is the time to raise interest rates.” Finally, the US trade deficit is once again narrowing, due in no small part to the declining Dollar.
At this point, it seems reasonable to assume that much of the bad news has already been priced into the Dollar. Sure, the Australian rate hikes came as a surprise and forced many to rethink their calculations. Investors have already begun to separate the healthy currencies from the sick (to borrow an analogy from a previous post), but that the Dollar would be grouped with the “sick” currencies has long been anticipated. Given that the currency has already fallen by double digits in 2009 and is nearing the record lows of 2008, some are wondering how long it can continue.
“Strong Dollar” Policy is a Joke
US economic officials have been busy of late, propagating the “Strong Dollar” farce to anyone who will listen. “I believe deeply that it’s very important for the U.S. and the economic health of the U.S. that we maintain a strong dollar,” said Treasury Secretary Timothy Geithner at last week’s APEC summit in Singapore. Added Ben Bernanke, Chairman of the Federal Reserve, “We are attentive to the implications of changes in the value of the dollar and…will help ensure that the dollar is strong and a source of global financial.”
The markets hardly reacted to Geithner’s assertions, probably because he has parroted this same promise on several occasions since assuming office last January. Investors can be excused for their jadedness, since similar promises were repeatedly made during the Bush administration, during which time the Dollar registered some of its steepest declines in memory.
Still, you’ve got to give Geithner an A for effort, since he has seemingly taken advantage of nearly every opportunity to pontificate about the Strong Dollar policy. ” ‘The dollar isn’t strengthening in the real world, but I told him [Geithner] I value his stance. The fact that I value his stance means that I believe things will develop that way, and that I believe the U.S. is making efforts to make that happen,’ ” said new Japanese Finance Minister Hirohisa Fuji. By his own admission, Fuji’s remarks were somewhat perfunctory, and it’s obvious to him the Dollar will continue depreciating
Bernanke, meanwhile, has more credibility on this issue, especially since the Fed so rarely discusses forex in public domain, which is why the Dollar initially spiked after he spoke. However, investors quickly registered the contradiction inherent in his remarks, which contained repeated promises about keeping rates low. Not to mention that the wording he used was almost identical to a speech from 2008. It’s no wonder, then, that the Dollar actually finished down on the day.
So if the markets aren’t taking this talk about a Strong Dollar seriously and Bernanke/Geithner know they aren’t being taken seriously, what’s the point of these vain pronouncements? [After all, it's not even clear that a strong Dollar is in the best interest of the US, which has benefited economically from a narrowing of the trade deficit]. A few explanations have been suggested.
The first is that the rhetoric is intended to re-assure foreign investors and creditors that their assets/loans in the US will be safe from massive devaluation. While foreign Central Banks continue to purchase US Treasury Securities, their have been increasing grumblings that loaning to the US government is a losing proposition. Second, a weak Dollar is inherently inflationary, since it makes imports more expensive. The reverse correlation between oil (and other commodities) and the Dollar means that a weak Dollar could feed back into higher prices double time. Towards that end, Bernanke was actually speaking earnestly about the Fed’s intentions to monitor forex markets, as they bear on inflation.
Finally, while US policymakers seem resigned to the Dollar’s continued decline, they need to make sure that it remains “orderly” (this characterization has cropped up repeatedly in political circles, of late). “We believe Chairman Bernanke’s comments reflect a desire to prevent a disorderly decline in the currency, rather than halt its depreciation altogether.” There is an obvious recognition that a complete collapse in the value of the Dollar would be terrible for everyone, of which Bernanke no doubt also undersds.
Still, the markets are keenly aware that the US (i.e. the Fed) is not prepared to put its money where its mouth is. The reason for the current bout of Dollar weakness is almost entirely connected to the Fed’s easy monetary policy (and its quantitative easing program) and the never-ending US budget deficit. If the US was seriously committed to a strong Dollar, then the Fed could simply tighten monetary policy. (The federal government could make more of an effort to balance its budget going forward, but this is currently less of a concern to forex markets).
Alas, the Fed is nowhere near ready to hike rates, nor is it willing to contemplate unwinding its quantitative easing program. Most analysts expect interest rates to remain at the current record lows well into next year. Futures contracts expiring in June 2010 are pricing in a Federal Funds Rate of only .42% at that time. Most telling is that Bernanke, himself, has declared rates will remain low for an “extended period.” In hindsight, using the same speech to talk up the Dollar probably wasn’tthe best idea.
The markets hardly reacted to Geithner’s assertions, probably because he has parroted this same promise on several occasions since assuming office last January. Investors can be excused for their jadedness, since similar promises were repeatedly made during the Bush administration, during which time the Dollar registered some of its steepest declines in memory.
Still, you’ve got to give Geithner an A for effort, since he has seemingly taken advantage of nearly every opportunity to pontificate about the Strong Dollar policy. ” ‘The dollar isn’t strengthening in the real world, but I told him [Geithner] I value his stance. The fact that I value his stance means that I believe things will develop that way, and that I believe the U.S. is making efforts to make that happen,’ ” said new Japanese Finance Minister Hirohisa Fuji. By his own admission, Fuji’s remarks were somewhat perfunctory, and it’s obvious to him the Dollar will continue depreciating
Bernanke, meanwhile, has more credibility on this issue, especially since the Fed so rarely discusses forex in public domain, which is why the Dollar initially spiked after he spoke. However, investors quickly registered the contradiction inherent in his remarks, which contained repeated promises about keeping rates low. Not to mention that the wording he used was almost identical to a speech from 2008. It’s no wonder, then, that the Dollar actually finished down on the day.
So if the markets aren’t taking this talk about a Strong Dollar seriously and Bernanke/Geithner know they aren’t being taken seriously, what’s the point of these vain pronouncements? [After all, it's not even clear that a strong Dollar is in the best interest of the US, which has benefited economically from a narrowing of the trade deficit]. A few explanations have been suggested.
The first is that the rhetoric is intended to re-assure foreign investors and creditors that their assets/loans in the US will be safe from massive devaluation. While foreign Central Banks continue to purchase US Treasury Securities, their have been increasing grumblings that loaning to the US government is a losing proposition. Second, a weak Dollar is inherently inflationary, since it makes imports more expensive. The reverse correlation between oil (and other commodities) and the Dollar means that a weak Dollar could feed back into higher prices double time. Towards that end, Bernanke was actually speaking earnestly about the Fed’s intentions to monitor forex markets, as they bear on inflation.
Finally, while US policymakers seem resigned to the Dollar’s continued decline, they need to make sure that it remains “orderly” (this characterization has cropped up repeatedly in political circles, of late). “We believe Chairman Bernanke’s comments reflect a desire to prevent a disorderly decline in the currency, rather than halt its depreciation altogether.” There is an obvious recognition that a complete collapse in the value of the Dollar would be terrible for everyone, of which Bernanke no doubt also undersds.
Still, the markets are keenly aware that the US (i.e. the Fed) is not prepared to put its money where its mouth is. The reason for the current bout of Dollar weakness is almost entirely connected to the Fed’s easy monetary policy (and its quantitative easing program) and the never-ending US budget deficit. If the US was seriously committed to a strong Dollar, then the Fed could simply tighten monetary policy. (The federal government could make more of an effort to balance its budget going forward, but this is currently less of a concern to forex markets).
Alas, the Fed is nowhere near ready to hike rates, nor is it willing to contemplate unwinding its quantitative easing program. Most analysts expect interest rates to remain at the current record lows well into next year. Futures contracts expiring in June 2010 are pricing in a Federal Funds Rate of only .42% at that time. Most telling is that Bernanke, himself, has declared rates will remain low for an “extended period.” In hindsight, using the same speech to talk up the Dollar probably wasn’tthe best idea.
Monday, November 23, 2009
Forex Trading - The Tips You Must Know About
Traders may request quotes from a market maker using a platform that incorporates an instant messaging type feature. The request is usually for a currency pair and trade size. The response is a two-sided price quote. Request for Quote trading tends to favor the market maker since only the market maker has time to see the trade and positions before making a quote. A dealer may then adjust that price up or down before responding to a trader’s request for a quote. Request for Quotes is an older trading mechanism still used and preferred in most trades in excess of $25 million.
Click and Deal Trading
Most Forex firms use the Click and Deal trading mechanism. The advent of the Internet makes the -what you click is what you get” (WYC/WYG) technology available to online computer users. Otherwise known as one-click dealing or executable streaming price feed, the Click and Deal mechanism provides live quotes that may be traded instantly. Most prices are streamed, i.e. they are constantly updated. The streaming data provide for an orderly and dependable marker. Though there are established limits on the amount that may be traded on a price the limit has proven to be more than sufficient to satisfy most retail traders. Click and deal trading limits the advantage that market makers have with Request for Quote trading. Market makers ace required to post two-sided quotes giving traders the option of trading on the quote or not trading on the quote. Traders have the advantage of seeing the quote price before revealing their intentions to the dealer, allowing transparency in Click and Deal trading and providing a mechanism that is the complete opposite of Request for Quote trading. Instead of having the trader ask the market maker for a price or a given currency pair that the dealer may adjust, the trader sees the price before deciding whether to trade. Click and deal trading is the most common type of platform used in retail Forex.
If you decided to become a forex trader you need to be very careful when choosing a trading company or a broker.
Hundreds of firms, owners, and employees have defrauded more than 25,000 customers of more than $300 million. Fraudulent firms have been known to offer bid/ask spreads in excess of 30 pips and require commissions for as much as $200 per trade. Many of die guilty parties have been prosecuted and sentenced; however, defrauded investors rarely recover the funds they lose.
• Promising profit that is never delivered.
• Claiming that most customers make a profit when, in fact most of them lose money
• Claiming to be trading customers’ funds when, in fact, they are stealing from customer’s funds
• Advertising fake success stories, using fake customers.
• Providing customers with fake account statements that show false trading profits.
• Claiming long tenures in the business when, in tact, they have only been in business for a matter or months.
• Claiming that most customers make a profit when, in fact most of them lose money
• Claiming to be trading customers’ funds when, in fact, they are stealing from customer’s funds
• Advertising fake success stories, using fake customers.
• Providing customers with fake account statements that show false trading profits.
• Claiming long tenures in the business when, in tact, they have only been in business for a matter or months.
Feel like getting several forex software? STOP, before you purchase you must read the reviews of the forex software you want to pay for.
For more details about forex software - check this review.
The Shortcut into Forex Issues
Most large forex firms trade in the interbank market with banks such as the Hong Kong and Shanghai Banking Corporation (HSBC), Deutsche Bank, or JP Morgan. When a trader uses one of the major global financial institutions, that trader is trading in the interbank market, which starts at $1 million. Each forex firm has a market maker who maintains order and provides liquidity in the market through market trade pricing. In Forex market making, Forex firms receive feeds from outside providers such as EBS, Reuters, or the banks involved in the trades. Market makers review those outside feeds and establish pricing to offer to clients. Each Forex firm also has a market specialist who intervenes in market situations when there are temporary price disparities.
Forex dealers are responsible for making trading opportunities available to retail investors and providing an orderly market for retail investors, forex dealers handle clearing, extend credit to investors, and provide a number of other back office operations. The role of the Forex dealer is a combination of market maker and market specialist in the equity market. When a retail trader views a quote, a Forex dealer is providing that quote. Firms that act as Forex dealers must register as Futures Commission Merchants (FCMs). The Commodity Futures Trading Community (CFTC), an independent entity or the US government, provides a listing of Futures Commission Merchants (FCMs).
In the United States, FCMs are the market makers in retail forex. The CFTC and National Futures Association (NFA) implement strict requirements for all FCMs. Requirements include adequate capitalization and specific provisions regarding ethics and anti-fraud. These requirements are similar to rules established for dealers and brokers in the securities market. Traders are cautioned against trailing with Forex dealers who are not registered as a FCM.
Forex dealers do not trade in the interbank market, though, some claim to do so. Retail traders do not have the credit rating or trading volume to trade in interbank so that Forex dealers provide traders an opportunity to trade in a limited subset of the larger interbank market.
It is retail forex that attracts millions of people all over the world. You do not need millions to enter market. You do not need any licenses and permissions. All you have to do is to find a trading firm and open an account. You can do it online without leaving your house.
With the development of the Internet retail forex has become very popular because it became widely accessible. This simplicity is one of the major causes why most traders fail there. Forex only seems easy. In fact this is a very serious job that requires much knowledge, experience, persistence and psychological readiness to handle big money.
If you are searching for productive forex software - please make sure to read the review of this forex software, before buying any.
It is a must to read unbiased reviews before buying forex software.
Denmark Forex
Forex is a Swedish financial services company. The company was started in 1927 as a currency exchange service for travellers, at the Central Station in Stockholm. The owner of Gyllenspet's Barber Shop, according to the legend, discovered that most of his customers were tourists in need of currency for their trips. So he started keeping the major currencies on hand.The company was subsequently acquired by Statens Järnvägar, the Swedish State Railways, which expanded the operations until it was sold off to one of the managers, Rolf Friberg, in 1965. The company was the only one apart from the banks that was licensed to conduct currency exchange in Sweden.The company, which is still wholly owned by the Friberg family, has expanded into Denmark and Finland and has over 50 shops, usually located at train stations or airports. The decrease in the business brought on by introduction of the Euro has made the company look for alternative sources of revenue, like applying for a banking license and attempting to move into more regular transaction services, earlier handled by the Swedish postal service.
London Forex
London Forex
The foreign exchange market (Currency, Forex, or FX) market is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. [1]FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market that we see today started evolving during the 1970s when worldover countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system till 1971.
Today, the FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements.[2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.[3]
The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollar, Pound Sterling, etc., and the need for trading in such currencies.
The foreign exchange market (Currency, Forex, or FX) market is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. [1]FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market that we see today started evolving during the 1970s when worldover countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system till 1971.
Today, the FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements.[2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.[3]
The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollar, Pound Sterling, etc., and the need for trading in such currencies.
South Africa Forex
The Republic of South Africa is a country located at the southern tip of the African continent. It borders Namibia, Botswana, Zimbabwe, Mozambique, and Swaziland, while a sixth country, Lesotho, is an enclave entirely surrounded by South African territory.South Africa has experienced a significantly different evolution from other nations in Africa as a result of two facts. Firstly, immigration from Europe reached levels not experienced in other African communities. Secondly, the strategic importance of the Cape Sea Route, as emphasised by the closure of the Suez Canal during the Six Day War, and mineralogical wealth made the country extremely important to Western interests, particularly during the Cold War. As a result of the former, South Africa is a very racially diverse nation. It has the largest population of people of 'coloured' (mixed race) communities in Africa. Black South Africans account for slightly less than 80% of the population.Racial strife between the white minority and the black majority has played a large part in the country's history and politics, culminating in apartheid, an official policy of 'separate development', which was instituted in 1948 by the National Party, although segregation existed prior to that date. The laws that defined apartheid began to be repealed or abolished by the National Party in 1990 after a long and sometimes violent struggle (including economic sanctions from the international community) by the black majority as well as many white, coloured, and Indian South Africans.The country is one of the few in Africa never to have had a coup d'état, and regular elections have been held for almost a century; however, the vast majority of black South Africans were not enfranchised until 1994. The economy of South Africa is the largest and best developed on the continent, with modern infrastructure common throughout the country.South Africa is often referred to as The Rainbow Nation - a term coined by Archbishop Desmond Tutu and later elaborated upon by then-President Nelson Mandela as a metaphor to describe the country's newly-developing multicultural diversity in the wake of segregationist apartheid ideology.South Africa will be the host nation for the 2010 FIFA World Cup. It will be the first time the tournament is held in Africa.Contents[hide]1 History2 Politics3 Administrative divisions4 Geography5 Flora and fauna6 Economy7 Agriculture8 Demographics9 Culture9.1 Languages10 Crime11 Military12 Media13 References
Australia Forex
The foreign exchange market (Currency, Forex, or FX) market is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. [1]FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market that we see today started evolving during the 1970s when worldover countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system till 1971.Today, the FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements.[2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.[3]The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollar, Pound Sterling, etc., and the need for trading in such currencies.
Hong Kong Forex
HistoryCitibank began operations in Hong Kong in 1902, thus becoming the first foreign bank to offer its services there. Citibank (Hong Kong) Limited is a licensed bank incorporated in Hong Kong. It is traded with the Chinese trading name 花旗銀行 (formerly 萬國寶通銀行). An office tower, the Citibank Plaza, in Garden Road, Central, Hong Kong is named after the bank.[edit] Company ProfileCitibank Hong Kong has a network of 25 branches spread over Hong Kong Island, Kowloon, New Territories and Macao .[edit] Awards• 2008: Awarded Best Flexible Work Practices by the Hong Kong HR Awards• 2008: SME’s Best Partner Award• 2008: Asian Banker Achievement Awards• 2007: Supreme Service Award• 2007: Best Practice Awards• 2007: Best Bank in Wealth Management Award• 2007: awarded the Best Foreign Bank by FinanceAsia• 2007: awarded the Best Foreign Cash Management Bank by Asiamoney• 2007: awarded the Overall Best Global Private Bank by Asiamoney magazine for the 3rd time• 2007: recognized as the Best Equity House by Euromoney• 2007: awarded the Excellence in Wealth Management Award by Asian Banker• 2007: awarded the Best Wealth Management Bank (Citigold) by Capital Magazine.• 2004: Selected Most Preferred Bank by Asia’s Top 1,000 Brand Listing.[edit] See alsoList of banks in Hong KongCitibank[edit] Product Lines and ServicesAs part of the world's largest financial institution with a strong global network in over 100 countries, Citibank International Personal Banking allows people abroad to hold bank accounts in Hong Kong without setting foot in the country.Like all other banks, Citibank Hong Kong offers various types of bank accounts options, investment products, loans and credit cards to its clients .[edit] Mobile Financial ServicesThrough partnership with SK Telecom, Citibank has established Mobile Money Ventures to focus on mobile financial services applications.[1] Mobile banking services were launched in Hong Kong in November 2008. The network- and device-independent mobile services platform supports diverse handsets; the platform is also available with customizable features like mobile stock trading. Customers of Citibank Hong Kong now have access to services such as account inquiry and management, transfer and payments, time deposits, stock trading, pending order management, stock quotation and portfolio management through their mobile phones.2[edit] The Octopus Credit CardIn July 2008, Citi launched a combined ‘contactless’ Octopus travel and credit card in Hong Kong. With over 50,000 terminals operational, customers can use their Octopus cards to travel on public transportation, as well as make low-value contactless payments at participating retail outlets. The Octopus Rewards Scheme enables users to collect and spend points earned from participating merchants. Users can also avail of cash rebates by spending on their Octopus cards; the rebates are credited for further usage.Similar partnerships have been forged with the Mass Rapid Transit Systems (MRT) in Delhi and Singapore, and the New York City Metropolitan Transport Authority[edit] DivisionsCitibank’s parent company, Citigroup, has three main divisions in Hong Kong: Citi Markets & Banking, Global Consumer Group and Global Wealth Management.The Global Consumer Group operates under the Citibank brand and its financial products and services are offered through 25 branches, one of which is in Macau. Additionally, Citibank Hong Kong provides its clients with investment options in the form of bonds, mutual funds, insurance products, foreign currency trading and stock trading. Through Citigold Wealth Management Banking, clients get a customized plan on wealth management. Citibank Hong Kong is also one of the largest issuers of credit cards in the island country.[edit] Sponsorship and Corporate Social ResponsibilitiesAs part of CSR, Citi Hong Kong’s is engaged in environmental conservation and financial education. It is also engaged in a variety of community activities and makes grants, business donations and encourages employee volunteering. Since 2003, Citi Hong Kong has donated more than HK$58.5 million (US$7.5 million) to support over 100 community programs, and has been recognized by the Hong Kong Council of Social Service as a “5 Years Plus” Caring Company.With few people having received any formal education about personal finance, Citi Hong Kong, has over the years played a lead role in developing programs for primary, secondary, university and post-graduate students. Since 2003, more than 260,000 students have benefited from Citi’s financial education programs. Additionally it is also involved in implementing financial education programs targeted at youth and low-income families in partnership with non-governmental organizations .
Newzealand Forex
The foreign exchange (forex) market is the largest market in the world because currency is changing hands whenever goods and services are traded between nations. The sheer size of the transactions going on between nations provides arbitrage opportunities for speculators, because the currency values fluctuate by the minute. Usually these speculators make many trades for small profits, but sometimes a big position is taken up for a huge profit or, when things go wrong, a huge loss. In this article, we'll look at the greatest currency trades ever made.
How the Trades Are MadeFirst, it is essential to understand how money is made in the forex market. Although some of the techniques are familiar to stock investors, currency trading is a realm of investing in and of itself. A currency trader can make one of four bets on the future value of a currency:Shorting a currency means that the trader believes that the currency will go down compared to another currency.Going long means that the trader thinks the currency will increase in value compared to another currency.The other two bets have to do with the amount of change in either direction - whether the trader thinks it will move a lot or not much at all - and are known by the provocative names of strangle and straddle. (For details on those strategies, read Get A Strong Hold On Profit With Strangles and Straddle Strategy A Simple Approach To Market Neutral.) Once you're decided on which bet you want to place, there are many ways to take up the position. For example, if you wanted to short the Canadian dollar (CAD), the simplest way would be to take out a loan in Canadian dollars that you will be able to pay back at a discount as the currency devalues (assuming you're correct). This is much too small and slow for true forex traders, so they use puts, calls, other options and forwards to build up and leverage their positions. It's the leveraging in particular that makes some trades worth millions, and even billions, of dollars. (For more on the mechanics of the forex market, see our Forex Tutorial and Getting Started In Forex.)No. 3: Andy Krieger Vs. The KiwiIn 1987, Andy Krieger, a 32-year-old currency trader at Bankers Trust, was carefully watching the currencies that were rallying against the dollar following the Black Monday crash. As investors and companies rushed out of the American dollar and into other currencies that had suffered less damage in the market crash, there were bound to be some currencies that would become fundamentally overvalued, creating a good opportunity for arbitrage. The currency Krieger targeted was the New Zealand dollar, also known as the kiwi. Using the relatively new techniques afforded by options, Krieger took up a short position against the kiwi worth hundreds of millions. In fact, his sell orders were said to exceed the money supply of New Zealand. The kiwi dropped sharply as the selling pressure combined with the lack of currency in circulation. It yo-yoed between a 3% and 5% loss while Krieger made millions for his employers. One part of the legend recounts a worried New Zealand government official calling up Krieger's bosses and threatening Bankers Trust to try to get Krieger out of the kiwi. Krieger later left Bankers Trust to go work for George Soros. (For more on how this works, see Trading The Odds With Arbitrage.)No. 2: Stanley Druckenmiller Bets on the Mark - TwiceStanley Druckenmiller made millions by making two long bets in the same currency while working as a trader for George Soros' Quantum Fund. Druckenmiller's first bet came when the Berlin Wall fell. The perceived difficulties of reunification between East and West Germany had depressed the German mark to a level that Druckenmiller thought extreme. He initially put a multimillion-dollar bet on a future rally until Soros told him to increase his purchase to 2 billion German marks. Things played out according to plan and the long position came to be worth millions of dollars, helping push the returns of the Quantum Fund over 60%. Possibly due to the success of his first bet, Druckenmiller also made the German mark an integral part of the greatest currency trade in history. A few years later, while Soros was busy breaking the Bank of England, Druckenmiller was going long in the mark on the assumption that the fallout from his boss's bet would drop the British pound against the mark. Druckenmiller was confident that he and Soros were right and showed this by buying British stocks. He believed that Britain would have to slash lending rates, thus stimulating business, and that the cheaper pound would actually mean more exports compared to European rivals. Following this same thinking, Druckenmiller bought German bonds on the expectation that investors would move to bonds as German stocks showed less growth than the British. It was a very complete trade that added considerably to the profits of Soros' main bet against the pound. (Read more about currency devaluation in What Causes A Currency Crisis?)No. 1: George Soros Vs. The British PoundThe British pound shadowed the German mark leading up to the 1990s even though the two countries were very different economically. Germany was the stronger country despite lingering difficulties from reunification, but Britain wanted to keep the value of the pound above 2.7 marks. Attempts to keep to this standard left Britain with high interest rates and equally high inflation, but it demanded a fixed rate of 2.7 marks to a pound as a condition of entering the European Exchange Rate Mechanism (ERM). (Learn more about why some countries peg their rates in Floating And Fixed Exchange Rates.) Many speculators, George Soros chief among them, wondered how long fixed exchange rates could fight market forces, and they began to take up short positions against the pound. Soros borrowed heavily to bet more on a drop in the pound. Britain raised its interest rates to double digits to try to attract investors. The government was hoping to alleviate the selling pressure by creating more buying pressure. Paying out interest costs money, however, and the British government realized that it would lose billions trying to artificially prop up the pound. It withdrew from the ERM and the value of the pound plummeted against the mark. Soros made at least $1 billion off this one trade. For the British government's part, the devaluation of the pound actually helped, as it forced the excess interest and inflation out of the economy, making it an ideal environment for businesses. A Thankless JobAny discussion around the top currency trades always revolves around George Soros, because many of these traders have a connection to him and his Quantum Fund. After retiring from active management of his funds to focus on philanthropy, Soros made comments about currency trading that were seen as expressing regret that he made his fortune attacking currencies. It was an odd change for Soros who, like many traders, made money by removing pricing inefficiencies from the market. Britain did lose money because of Soros and he did force the country to swallow the bitter pill of withdrawing from the ERM, but many people also see these drawbacks to the trade as necessary steps that helped Britain emerge stronger. If there hadn't been a drop in the pound, Britain's economic problems may have dragged on as politicians kept trying to tweak the ERM. (For related reading, see Working Through The Efficient Market Hypothesis.)ConclusionA country can benefit from a weak currency as much as from a strong one. With a weak currency, the domestic products and assets become cheaper to international buyers and exports increase. In the same way, domestic sales increase as foreign products go up in price due to the higher cost of importing. There were very likely many people in Britain and New Zealand who were pleased when speculators brought down the overvalued currencies. Of course, there were also importers and others who were understandably upset. A currency speculator makes money by forcing a country to face realities it would rather not face. Although it's a dirty job, someone has to do it.
How the Trades Are MadeFirst, it is essential to understand how money is made in the forex market. Although some of the techniques are familiar to stock investors, currency trading is a realm of investing in and of itself. A currency trader can make one of four bets on the future value of a currency:Shorting a currency means that the trader believes that the currency will go down compared to another currency.Going long means that the trader thinks the currency will increase in value compared to another currency.The other two bets have to do with the amount of change in either direction - whether the trader thinks it will move a lot or not much at all - and are known by the provocative names of strangle and straddle. (For details on those strategies, read Get A Strong Hold On Profit With Strangles and Straddle Strategy A Simple Approach To Market Neutral.) Once you're decided on which bet you want to place, there are many ways to take up the position. For example, if you wanted to short the Canadian dollar (CAD), the simplest way would be to take out a loan in Canadian dollars that you will be able to pay back at a discount as the currency devalues (assuming you're correct). This is much too small and slow for true forex traders, so they use puts, calls, other options and forwards to build up and leverage their positions. It's the leveraging in particular that makes some trades worth millions, and even billions, of dollars. (For more on the mechanics of the forex market, see our Forex Tutorial and Getting Started In Forex.)No. 3: Andy Krieger Vs. The KiwiIn 1987, Andy Krieger, a 32-year-old currency trader at Bankers Trust, was carefully watching the currencies that were rallying against the dollar following the Black Monday crash. As investors and companies rushed out of the American dollar and into other currencies that had suffered less damage in the market crash, there were bound to be some currencies that would become fundamentally overvalued, creating a good opportunity for arbitrage. The currency Krieger targeted was the New Zealand dollar, also known as the kiwi. Using the relatively new techniques afforded by options, Krieger took up a short position against the kiwi worth hundreds of millions. In fact, his sell orders were said to exceed the money supply of New Zealand. The kiwi dropped sharply as the selling pressure combined with the lack of currency in circulation. It yo-yoed between a 3% and 5% loss while Krieger made millions for his employers. One part of the legend recounts a worried New Zealand government official calling up Krieger's bosses and threatening Bankers Trust to try to get Krieger out of the kiwi. Krieger later left Bankers Trust to go work for George Soros. (For more on how this works, see Trading The Odds With Arbitrage.)No. 2: Stanley Druckenmiller Bets on the Mark - TwiceStanley Druckenmiller made millions by making two long bets in the same currency while working as a trader for George Soros' Quantum Fund. Druckenmiller's first bet came when the Berlin Wall fell. The perceived difficulties of reunification between East and West Germany had depressed the German mark to a level that Druckenmiller thought extreme. He initially put a multimillion-dollar bet on a future rally until Soros told him to increase his purchase to 2 billion German marks. Things played out according to plan and the long position came to be worth millions of dollars, helping push the returns of the Quantum Fund over 60%. Possibly due to the success of his first bet, Druckenmiller also made the German mark an integral part of the greatest currency trade in history. A few years later, while Soros was busy breaking the Bank of England, Druckenmiller was going long in the mark on the assumption that the fallout from his boss's bet would drop the British pound against the mark. Druckenmiller was confident that he and Soros were right and showed this by buying British stocks. He believed that Britain would have to slash lending rates, thus stimulating business, and that the cheaper pound would actually mean more exports compared to European rivals. Following this same thinking, Druckenmiller bought German bonds on the expectation that investors would move to bonds as German stocks showed less growth than the British. It was a very complete trade that added considerably to the profits of Soros' main bet against the pound. (Read more about currency devaluation in What Causes A Currency Crisis?)No. 1: George Soros Vs. The British PoundThe British pound shadowed the German mark leading up to the 1990s even though the two countries were very different economically. Germany was the stronger country despite lingering difficulties from reunification, but Britain wanted to keep the value of the pound above 2.7 marks. Attempts to keep to this standard left Britain with high interest rates and equally high inflation, but it demanded a fixed rate of 2.7 marks to a pound as a condition of entering the European Exchange Rate Mechanism (ERM). (Learn more about why some countries peg their rates in Floating And Fixed Exchange Rates.) Many speculators, George Soros chief among them, wondered how long fixed exchange rates could fight market forces, and they began to take up short positions against the pound. Soros borrowed heavily to bet more on a drop in the pound. Britain raised its interest rates to double digits to try to attract investors. The government was hoping to alleviate the selling pressure by creating more buying pressure. Paying out interest costs money, however, and the British government realized that it would lose billions trying to artificially prop up the pound. It withdrew from the ERM and the value of the pound plummeted against the mark. Soros made at least $1 billion off this one trade. For the British government's part, the devaluation of the pound actually helped, as it forced the excess interest and inflation out of the economy, making it an ideal environment for businesses. A Thankless JobAny discussion around the top currency trades always revolves around George Soros, because many of these traders have a connection to him and his Quantum Fund. After retiring from active management of his funds to focus on philanthropy, Soros made comments about currency trading that were seen as expressing regret that he made his fortune attacking currencies. It was an odd change for Soros who, like many traders, made money by removing pricing inefficiencies from the market. Britain did lose money because of Soros and he did force the country to swallow the bitter pill of withdrawing from the ERM, but many people also see these drawbacks to the trade as necessary steps that helped Britain emerge stronger. If there hadn't been a drop in the pound, Britain's economic problems may have dragged on as politicians kept trying to tweak the ERM. (For related reading, see Working Through The Efficient Market Hypothesis.)ConclusionA country can benefit from a weak currency as much as from a strong one. With a weak currency, the domestic products and assets become cheaper to international buyers and exports increase. In the same way, domestic sales increase as foreign products go up in price due to the higher cost of importing. There were very likely many people in Britain and New Zealand who were pleased when speculators brought down the overvalued currencies. Of course, there were also importers and others who were understandably upset. A currency speculator makes money by forcing a country to face realities it would rather not face. Although it's a dirty job, someone has to do it.
Dubai Forex
finance, a futures contract is a standardized contract, traded on a futures exchange, to buy or sell a standardized quantity of a specified commodity of standardized quality (which, in many cases, may be such non-traditional "commodities" as foreign currencies, commercial or government paper [e.g., bonds], or "baskets" of corporate equity ["stock indices"] or other financial instruments) at a certain date in the future, at a price (the futures price) determined by the instantaneous equilibrium between the forces of supply and demand among competing buy and sell orders on the exchange at the time of the purchase or sale of the contract. They are contracts to buy or sell at a specific date in the future [1] at a price specified today. The future date is called the delivery date or final settlement date. The official price of the futures contract at the end of a day's trading session on the exchange is called the settlement price for that day of business on the exchange.A futures contract gives the holder the obligation to make or take delivery under the terms of the contract, whereas an option grants the buyer the right, but not the obligation, to establish a position previously held by the seller of the option. In other words, the owner of an options contract may exercise the contract, but both parties of a "futures contract" must fulfill the contract on the settlement date. The seller delivers the underlying asset to the buyer, or, if it is a cash-settled futures contract, then cash is transferred from the futures trader who sustained a loss to the one who made a profit. To exit the commitment prior to the settlement date, the holder of a futures position has to offset his/her position by either selling a long position or buying back (covering) a short position, effectively closing out the futures position and its contract obligations.Futures contracts, or simply futures, (but not future or future contract) are exchange traded derivatives. The exchange's clearinghouse acts as counterparty on all contracts, sets margin requirements, and crucially also provides a mechanism for settlement.[2]
South Korea Forex
The foreign exchange market (Currency, Forex, or FX) market is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. [1]FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market that we see today started evolving during the 1970s when worldover countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system till 1971.Today, the FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements.[2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.[3]The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollar, Pound Sterling, etc., and the need for trading in such currencies.
Bahrain Forex
Bahrain, officially known as the Kingdom of Bahrain, is an island country in the Persian Gulf. Saudi Arabia lies to the west and is connected to Bahrain by the King Fahd Causeway (officially opened on November 25, 1986), and Qatar is to the south across the Gulf of Bahrain. The Qatar–Bahrain Friendship Bridge being planned will link Bahrain to Qatar as the longest fixed link in the world[1].
Norway Forex
Forex AB is a Swedish financial services company. The company was started in 1927 as a currency exchange service for travellers, at the Central Station in Stockholm. The owner of Gyllenspet's Barber Shop, according to the legend, discovered that most of his customers were tourists in need of currency for their trips. The owner began keeping the major currencies on hand.The company was subsequently acquired by Statens Järnvägar (SJ), the Swedish State Railways, which expanded the operations until it was sold off to one of the managers, Rolf Friberg, in 1965. The company was the only one apart from the banks that was licensed to conduct currency exchange in Sweden.The company, which is still wholly owned by the Friberg family, has expanded into Denmark, Finland, Norway and Iceland and has over 60 shops, usually located at train stations or airports. The decrease in the business brought on by introduction of the euro has made the company look for alternative sources of revenue, like applying for a banking licence and attempting to move into more regular transaction services, earlier handled by Svensk Kassaservice, a subsidiary of the state owned Swedish postal company, Posten.Since 2003 Forex is a licensed bank.
Thiland Forex
Asian Financial CrisisFinancial Glossary Written by Wikipedia, the free encyclopedia.var sburl8937 = window.location.href; var sbtitle8937 = document.title;var sbtitle8937=encodeURIComponent("Asian Financial Crisis"); var sburl8937=decodeURI("http://www.actionforex.com/financial-glossary/financial-glossary/asian-financial-crisis-20041204325/"); sburl8937=sburl8937.replace(/amp;/g, "");sburl8937=encodeURIComponent(sburl8937);The Asian financial crisis was a financial crisis that started in July 1997 in Thailand, and affected currencies, stock markets, and other asset prices of several Asian countries, many part of the East Asian Tigers. It is also commonly referred to as the Asian Currency Crisis or locally, although inaccurately, as the IMF Crisis.Indonesia, South Korea and Thailand were the countries most affected by the crisis. Malaysia, the Philippines and Hong Kong were also hit by the slump. Mainland China and Taiwan were relatively unaffected. Japan was not affected much by this crisis but was going through its own long-term economic difficulties.HistoryUntil 1996, Asia attracted almost half of total capital inflow to developing countries. However, Thailand, Indonesia and South Korea had large current account deficits and the maintenance of pegged exchange rate encouraged external borrowing and led to excessive exposure to foreign exchange risk in both the financial and corporate sectors.Economists have advanced the impact of Mainland China on the real economy as a contributing factor to the crisis. China had begun to effectively compete with other Asian exporters particularly in the 1990s after the implementation of a number of export-oriented reforms. Most importantly, the Thai and Indonesian currencies were closely tied to the dollar, which was appreciating in the 1990s. Western importers sought cheaper manufactuerers and found them, indeed, in China whose currency was depreciated relative to the dollar.The Asian crisis started in mid-1997 and affected currencies, stock markets, and other asset prices of several South East Asian economies. Triggered by events in Latin America, Western investors lost confidence in securities in East Asia and began to pull money out, creating a snowball effect.Many economists, including Joseph Stiglitz and Jeffrey Sachs, have downplayed the role of the real economy in the crisis compared to the financial markets due to the speed of the crisis. The rapidity with which the crisis happened has prompted Sachs and others to compare it to a classic bank run prompted by a sudden risk shock. Sachs points to strict monetary and fiscal policies implemented by the governments in the wake of the crisis, while Frederic Mishkin points to the role of asymmetric information in the financial markets that led to a "herd mentality" among investors that magnified a relatively small risk in the real economy. The crisis has thus attracted interest from economists interested in market psychology.Thailand
Egypt Forex
Egypt, officially known as the Arab Republic of Egypt, is a country in North Africa that includes the Sinai Peninsula, a land bridge to Asia. Covering an area of about 1,001,450 square kilometers (386,660 sq mi), Egypt borders Libya to the west, Sudan to the south and the Gaza Strip and Israel to the east. Its northern coast borders the Mediterranean Sea; the eastern coast borders the Red Sea.Egypt is one of the most populous countries in Africa. The great majority of its estimated 80 million people (2007) live near the banks of the Nile River, in an area of about 40,000 square kilometers (15,000 sq mi), where the only arable agricultural land is found. The large areas of the Sahara Desert are sparsely inhabited. About half of Egypt's residents live in the densely-populated centres of greater Cairo, Alexandria and other major cities in the Nile Delta.Egypt is famous for its ancient civilization and some of the world's most famous monuments, including the Giza pyramid complex and its Great Sphinx. The southern city of Luxor contains numerous ancient artefacts, such as the Karnak Temple and the Valley of the Kings. Egypt is widely regarded as an important political and cultural nation of the Middle East.
Jordan Forex
Emerging MarketsThe term emerging markets is used to describe a nation's social, or business activity in the process of rapid industrialization. The term "rapidly growing economy" is now being used to denote emerging markets.Contents1 Terminology2 List of countries3 See also4 References5 More Readings//TerminologyOriginally brought into fashion in the 1980s by then World Bank economist Antoine van Agtmael,[1] the term is sometimes loosely used as a replacement for emerging economies, but really signifies a business phenomenon that is not fully described by or constrained to geography or economic strength; such countries are considered to be in a transitional phase between developing and developed status. Examples of emerging markets include China,[2] India, Pakistan, Mexico, Brazil [3], Chile, Argentina, Peru, much of Southeast Asia, countries in Eastern Europe, the Middle East, parts of Africa and Latin America. Emphasizing the fluid nature of the category, political scientist Ian Bremmer defines an emerging market as "a country where politics matters at least as much as economics to the markets."[4]The research on emerging markets is diffused within management literature. While researchers including C. K. Prahalad, George Haley, Hernando De Soto, Usha Haley, and several professors from Harvard Business School and Yale School of Management have described activity in countries such as India and China, how a market emerges is little understood.
Indonesia Forex
Indonesian rupiahFrom Wikipedia, the free encyclopediaJump to: navigation, searchIndonesian rupiahrupiah Indonesia (Indonesian)Rupiah banknotes, only the Rp 1000 and Rp 5000 notes are currentISO 4217 CodeIDRUser(s)IndonesiaInflation11.77%Source[2], October 2008Subunit1/100senSymbolRpCoinsFreq. usedRp 100, 200, 500Rarely usedRp 25, 50, 1000BanknotesFreq. usedRp 1000, Rp 5000, Rp 10 000, Rp 20 000 Rp 50 000, Rp 100 000Central bankBank IndonesiaWebsitehttp://www.bi.go.id/MintPerum PeruriThe rupiah (Rp) is the official currency of Indonesia. Issued and controlled by the Bank of Indonesia, the ISO 4217 currency code for the Indonesian rupiah is IDR. The symbol used on all banknotes and coins are Rp. The name derives from the Indian monetary unit rupee. Informally, Indonesians also use the word "perak" ('silver' in Indonesian) in referring to rupiah. The rupiah is subdivided into 100 sen, although inflation has rendered all coins and banknotes denominated in sen obsolete.The Riau islands and the Indonesian half of New Guinea (Irian Barat) had their own variants of the rupiah, but these were subsumed into the national rupiah in 1964 and 1971 respectively (see Riau rupiah and West New Guinea rupiah).Kuwait forex
Nasser Al-Kharafi & familyIndustry - DiversifiedCitizenship - KuwaitAge - 62Net worth (US $ billion) - 12.4Country of Residence - KuwaitContent derived from Wikipedia article on Nasser Al-KharafiNasser Al-KharafiNasser Al-Kharafi (born 1944) is a Kuwaiti businessman who runs M.A. Kharafi & Sons,Runs $4.3 billion (sales) M.A. Kharafi & Sons in Kuwait, which has benefited from that nation's robust economy. His net worth rose thanks to rising share prices of several holdings including Mobile Telecommunications Co., National Bank of Kuwait, and Americana, operator of U.S. fast food chains. Avid BBC-viewer. Older brother Jassim is the spokesman of Kuwait parliament; sister Faiza is president of Kuwait University. Has construction contracts in more than 30 countries worldwide.
Forex Expert Advisors - Why Forex Robots Always Lose Money For Users
Most new traders buy a ready made Forex Expert Advisor for a hundred dollars or so and think they can plug it in and get rich with no effort but none of the heavily advertised Forex Robots or Expert Advisors, ever make money here's why...
The Forex software you see heavily advertised comes from marketing companies and none that I know of, have been developed by successful traders. If you look at them, they all claim to have made a lot of money but none of them, ever produce a track record of gains that's been verified.
The Forex software you see heavily advertised comes from marketing companies and none that I know of, have been developed by successful traders. If you look at them, they all claim to have made a lot of money but none of them, ever produce a track record of gains that's been verified.
The track records are either, simulations going backwards knowing the closing prices or unverified figures from the vendor selling the system! The reason you don't get a real track record is simple, they don't work. Anyone can make a system fit the data and win, when they know all the closing prices but as no two data sequences ever repeat exactly the same way again, this is doomed to failure when the system is traded in real time.
Think about it - If you really could get rich by spending a hundred dollars or so and making no effort, there would be no credit crunch and a lot's of job vacancies, as everyone would give up their day jobs and be trading!
95% of Forex traders lose money and if you want to win, you need an education it really is that simple. You need to make a effort and learn skills and if you do this, you will be rewarded with a great second or even life changing income.
Wednesday, November 18, 2009
The Shortcut into Forex Issues
Most large forex firms trade in the interbank market with banks such as the Hong Kong and Shanghai Banking Corporation (HSBC), Deutsche Bank, or JP Morgan. When a trader uses one of the major global financial institutions, that trader is trading in the interbank market, which starts at $1 million. Each forex firm has a market maker who maintains order and provides liquidity in the market through market trade pricing. In Forex market making, Forex firms receive feeds from outside providers such as EBS, Reuters, or the banks involved in the trades. Market makers review those outside feeds and establish pricing to offer to clients. Each Forex firm also has a market specialist who intervenes in market situations when there are temporary price disparities.
Forex dealers are responsible for making trading opportunities available to retail investors and providing an orderly market for retail investors, forex dealers handle clearing, extend credit to investors, and provide a number of other back office operations. The role of the Forex dealer is a combination of market maker and market specialist in the equity market. When a retail trader views a quote, a Forex dealer is providing that quote. Firms that act as Forex dealers must register as Futures Commission Merchants (FCMs). The Commodity Futures Trading Community (CFTC), an independent entity or the US government, provides a listing of Futures Commission Merchants (FCMs).
In the United States, FCMs are the market makers in retail forex. The CFTC and National Futures Association (NFA) implement strict requirements for all FCMs. Requirements include adequate capitalization and specific provisions regarding ethics and anti-fraud. These requirements are similar to rules established for dealers and brokers in the securities market. Traders are cautioned against trailing with Forex dealers who are not registered as a FCM.
Forex dealers do not trade in the interbank market, though, some claim to do so. Retail traders do not have the credit rating or trading volume to trade in interbank so that Forex dealers provide traders an opportunity to trade in a limited subset of the larger interbank market.
It is retail forex that attracts millions of people all over the world. You do not need millions to enter market. You do not need any licenses and permissions. All you have to do is to find a trading firm and open an account. You can do it online without leaving your house.
With the development of the Internet retail forex has become very popular because it became widely accessible. This simplicity is one of the major causes why most traders fail there. Forex only seems easy. In fact this is a very serious job that requires much knowledge, experience, persistence and psychological readiness to handle big money.
If you are searching for productive forex software - please make sure to read the review of this forex software, before buying any.
It is a must to read unbiased reviews before buying forex software.
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