The Dollar rose yesterday against most of its major rivals as riskier currencies fell out of favor. Despite strong gains in U.S. equities, the Dollar gained ground as the likelihood of further European Interest Rate cuts loom over the currency markets. At the end of the Thursday's trading, the EUR/USD was little changed, despite high volatility most of the day. The USD/JPY closed higher at 98.32 from 97.77. Against the Pound the Dollar also finished higher at 1.4481 from 1.4585.The dramatic sell off of the Dollar appears to have ceased as yesterday's trading was characterized by reduced market risk and future Interest Rate levels. The Dollar was sold heavily last week, sparked by the announcement that the Federal Reserve will begin a quantitative easing program. Slowly the currency markets are returning to relatively normal trading patterns as traders see little reason to take risks on higher yielding currencies in the face of the economic downturn.Today's trading may be characterized by a glut of economic indicators surrounding consumer spending and attitudes. Due today are personal spending numbers and a revised consumer sentiment report. A better than expected result in the data releases could provide another boost to the Dollar as the currency continues to recoup its losses from last week. Look for the EUR/USD to drop below the 1.3500 level today.
Sunday, April 5, 2009
The Benefits Of Using A Money Management System For Forex Trading
Wise investors use a system to learn when to buy or sell and the amount of money at risk at any particular time. This is their money management program. An electronic, automated Forex trading system is an ideal money management program for anyone involved with the Forex marketplace.
Some people might be skeptical about an automated Forex trading system - after all, don’t such systems try to “time the market”, and isn’t that a no-no for investors? But experienced Forex traders know that good automated software to help them with trading can be set up with their chosen parameters so that no market timing is involved. Instead, the system uses the stop-loss, retracement, and other real-time parameters and couples those stipulations with mathematical algorithms such as often-used Fibonacci formula in order to automatically place buy or sell orders on behalf of the trader.
Due to the fact that there is almost always a currency market that is open at any given time in any area of the world, the Forex markets are open 24 hours daily, 7 days weekly. You do not have to concern yourself with market timing attempts when you have an automated Forex trading system acting as your money management program. It is the ideal software, since it never sleeps.
Knowledgeable individuals may wonder why use a money management program. Perhaps they think that investing is a gamble ranking about the same as visiting a casino. They may reason why you would use such a program if it makes no difference at all.
These people have of course got it all wrong. There is certainly uncertainty and chance involved in the market, but knowing how the market works and being able to manage your Forex trades and your finances can make a huge difference to your odds of success in the market. There are trends which can be seen in the market if you step back and take a look at the larger picture. Automated Forex trading systems use these patterns to make their market analysis and model future market behavior based on these historical patterns and proven mathematical models.
While there are of course plenty of professional gamblers who have made millions. There is no one who is lucky enough to make that many good decisions in a game of chance. While there is uncertainty in gambling just as there is investment, there is a genuine science to both - and in both, there are larger patterns which can be seen and exploited to ensure a greater chance of success.
Forex trading should also be approached in a systematic manner; this is the way to make a success of your trades. Just ask those who have been successful in the Forex market; they didn’t guess their way to wealth, they used a system.
And turning both good and bad luck to your long term advantage and profit is entirely possible with a sound money management program - and that, once again, can be enhanced by an automated Forex trading system.
Euro falls against dollar to $1.3473
The euro fell against the dollar Wednesday as investors digested new U.S. plans to prop up the world's largest economy and financial system.
The 16-nation euro bought $1.3473 in European morning trading, down from the $1.3518 late Tuesday in New York.
The euro had risen to the $1.37 level in the past week after the U.S. government said it would flood the financial system with money and buy up $300 billion worth of long-term Treasurys and $1.25 trillion in mortgage-backed securities. Those moves can also trigger inflation and devalue the dollar, but could help exports from the U.S.
The European Central Bank has so far said it has no plans for similar money injection programs.
On Monday, meanwhile, the U.S. government fleshed out a plan that would combine public and private money to scoop out up to $1 trillion worth of soured assets from banks' balance sheets.In other trading Wednesday, the British pound bought $1.4637 compared with $1.4721, while the dollar bought 97.49 Japanese yen, compared with 97.89 late Tuesday in New York
The 16-nation euro bought $1.3473 in European morning trading, down from the $1.3518 late Tuesday in New York.
The euro had risen to the $1.37 level in the past week after the U.S. government said it would flood the financial system with money and buy up $300 billion worth of long-term Treasurys and $1.25 trillion in mortgage-backed securities. Those moves can also trigger inflation and devalue the dollar, but could help exports from the U.S.
The European Central Bank has so far said it has no plans for similar money injection programs.
On Monday, meanwhile, the U.S. government fleshed out a plan that would combine public and private money to scoop out up to $1 trillion worth of soured assets from banks' balance sheets.In other trading Wednesday, the British pound bought $1.4637 compared with $1.4721, while the dollar bought 97.49 Japanese yen, compared with 97.89 late Tuesday in New York
US dollar up on strong demand for Treasury bonds
The US dollar rose against the euro and the yen on Thursday amid healthy demand for US Treasury bonds and speculation on rate cuts in Europe to deal with a sharp economic downturn.The euro fetched 1.3522 dollars around 1900 GMT in New York against 1.3583 at the end of trading on Wednesday.The dollar also bounced to 98.52 yen from 97.54 on Wednesday.A better-than-expected fourth quarter GDP data revision for the US economy on Thursday "did little to encourage US dollar buying as players added to short positions on improving sentiment on the back of the rally over the past two weeks in global equities," said Michael Woolfolk of Bank of New York Mellon.Revised data showed a steep 6.3 percent pace of decline in US economic output in the fourth quarter of 2008, lower than the 6.6 percent anticipated by analysts."Currency traders shrugged off the underlying weakness because the GDP report is backward looking," said Kathy Lien of Global Forex Trading."The smaller revision provides relief but investors are still cautious about believing in a recovery," she said, citing rising US unemployment.As it shrugged off the GDP revision, the foreign exchange market closely monitored the bond market, where the Treasury's offering for seven-year notes enjoyed good demand compared with a weak auction a day earlier for five-year notes.Investors were "relieved to see healthy demand for today's Treasury auction, where the government successfully sold a record 24 billion dollars in seven-year notes," said Elizabeth Harrow at Schaeffer's Investment Research.The dollar also rose on continued bearish outlook for the euro zone.A pick-up in German consumer confidence has stalled as Europe's biggest economy has been hit by a steady stream of bad news, the latest survey by the GfK research institute showed on Thursday.A key index compiled by GfK edged lower to 2.4 points for April from a revised 2.5 points this month, the Nuremberg-based think tank said."As Europe's largest economy heads into a deepening recession, the European Central Bank is expected to ease policy further as the outlook for growth and inflation falters," said David Song of Forex Capital Markets.The euro was hit by expectations that the European Central Bank will lower interest rates next week and might announce new measures to breathe life into the contracting European economy."Two influential governing council members... have given clear signals that the ECB is set to ease monetary policy significantly next Thursday," said analysts at Barclays Capital.They said new measures could be unveiled including extending the term of the longer-term refinancing operations and also buying corporate debt.ECB vice president Lucas Papademos suggested on Thursday the European Central Bank could follow its peers in buying corporate bonds to ease credit market tensions.The European Central Bank has so far been reluctant to follow the example of its major counterparts in Japan, the US and Britain, which have programmes to buy corporate bonds aimed at bringing down market interest rates.The US dollar was lower at 1.1268 Swiss francs in New York on Thursday from 1.1318 a day earlier.The British pound fell to 1.4446 dollars from 1.4669. - AFP/de
Dollar Rebound Continues; Euro Under $1.36
The dollar on Friday continues to retrace the sharp losses that it saw during the previous two days.
U.S. stock markets have been unable to notch any solid gains despite the Federal Reserve's new liquidity injection plan, and that's pushing some investors back into the greenback for its safe haven status.
The euro fell to an intraday low near $1.3500 during the New York session and remains under $1.36 after hitting a 10-week high of $1.3739 Thursday. The dollar is back above Y96, three yen higher from a nearly one-month low reached a day earlier.
Much of the dollar's sharp losses earlier this week were attributed to a modest rally in U.S. stock markets after the Fed announced on Wednesday its new plan to revive the economy. The plan calls for pumping an additional $1.15 trillion into the system through the purchase of $300 billion in long-term Treasury bonds during the next six months, and other actions.
But stocks notched losses Thursday, and Friday they are trading rather flat, which is causing some investors to get out of choppy stocks once again and head back into the dollar.
Currency markets showed little immediate reaction to comments Friday from Fed Chairman Ben Bernanke. He said the Fed actions have helped the economy and the financial system and that he's encouraged by market response to the Fed's credit programs.
Friday afternoon in New York, the euro was at $1.3568 from $1.3678 late Thursday, and the dollar was at Y96.15 from Y94.41, according to EBS. The euro was at Y130.45 from Y129.14. The U.K. pound was at $1.4455 from $1.4518. The dollar was at CHF1.1246 from CHF1.1228 Thursday.
Meanwhile, the Canadian dollar is little changed Friday around noon EDT as currency traders try to gauge wavering levels of risk aversion as reflected in equity market developments.
The Canadian currency showed little response to news of a surprise 1.9% jump in Canadian retail sales in January, and analysts say it is generally seen as headed for a period of consolidation after its recent sharp upward move.
Currency strategist Jacqui Douglas of TD Securities in Toronto said that the U.S.-Canadian dollar pair is currently trying "to find some stable footing within the newly established C$1.2200-C$1.2600 range."
Recently, the dollar is at C$1.2370, from C$1.2373 late Thursday.
U.S. stock markets have been unable to notch any solid gains despite the Federal Reserve's new liquidity injection plan, and that's pushing some investors back into the greenback for its safe haven status.
The euro fell to an intraday low near $1.3500 during the New York session and remains under $1.36 after hitting a 10-week high of $1.3739 Thursday. The dollar is back above Y96, three yen higher from a nearly one-month low reached a day earlier.
Much of the dollar's sharp losses earlier this week were attributed to a modest rally in U.S. stock markets after the Fed announced on Wednesday its new plan to revive the economy. The plan calls for pumping an additional $1.15 trillion into the system through the purchase of $300 billion in long-term Treasury bonds during the next six months, and other actions.
But stocks notched losses Thursday, and Friday they are trading rather flat, which is causing some investors to get out of choppy stocks once again and head back into the dollar.
Currency markets showed little immediate reaction to comments Friday from Fed Chairman Ben Bernanke. He said the Fed actions have helped the economy and the financial system and that he's encouraged by market response to the Fed's credit programs.
Friday afternoon in New York, the euro was at $1.3568 from $1.3678 late Thursday, and the dollar was at Y96.15 from Y94.41, according to EBS. The euro was at Y130.45 from Y129.14. The U.K. pound was at $1.4455 from $1.4518. The dollar was at CHF1.1246 from CHF1.1228 Thursday.
Meanwhile, the Canadian dollar is little changed Friday around noon EDT as currency traders try to gauge wavering levels of risk aversion as reflected in equity market developments.
The Canadian currency showed little response to news of a surprise 1.9% jump in Canadian retail sales in January, and analysts say it is generally seen as headed for a period of consolidation after its recent sharp upward move.
Currency strategist Jacqui Douglas of TD Securities in Toronto said that the U.S.-Canadian dollar pair is currently trying "to find some stable footing within the newly established C$1.2200-C$1.2600 range."
Recently, the dollar is at C$1.2370, from C$1.2373 late Thursday.
WORLD FOREX: Dollar In Partial Recovery From Post-FOMC Rout
The dollar managed Friday to retrace some of its recent sharp losses in a partial recovery from one of its worst weeks in several decades.
The U.S. currency had been battered severely by the Federal Reserve's announcement Wednesday of its new plan to revive the economy. Fears that a monetizing of U.S. debt would debase the dollar had placed the euro and other currencies on track for significant gains.
Even with Friday's advance, the dollar suffered its biggest single-week decline since 1985 on the dollar index (DXY), which measures the U.S. currency against a basket of six major currencies.
National Bank's Toronto-based managing director of foreign exchange Jack Spitz termed Wednesday's Fed actions a "watershed moment in terms of dollar sentiment globally."
Friday's quiet tone in currency markets stood in stark contrast to the tumultuous movements earlier in the week, when an already sagging dollar plunged in the wake of the Fed announcement that included the purchase of $300 billion in long-term Treasury bonds during the next six months, among other actions.
In trading characterized mostly by end-of-the-week position-squaring and illiquidity due to a holiday in Japan, the dollar rallied back against the euro and yen Friday, and notched more modest gains against a range of other currencies as well.
Nevertheless, the euro exited active trading with one of its biggest weekly advances versus the dollar since the single currency's introduction in 1999, said Brian Dolan, chief currency strategist at electronic trading platform Forex.com. The euro was up nearly 5% from $1.2920 a week ago.
Late Friday, the euro was at $1.3560 from $1.3678 late Thursday and the dollar was at Y95.90 from Y94.41, according to EBS. The euro was at Y130.07 from Y129.14. The U.K. pound was at $1.4440 from $1.4518. The dollar was at CHF1.1295 from CHF1.1228 Thursday.
The dollar's decline might have carried over into Friday were it not for the reversal that occurred in European trading when the euro suffered from chatter that the European Central Bank may be preparing to substantially increase its bailout plans for struggling euro-zone and eastern European economies.
Talk had been circulating during a two-day summit of European Union leaders in Brussels that the ECB had created a contingency fund to rescue troubled euro-zone economies, including those of Ireland and Greece.
But E.U. leaders, finance ministers and the ECB on Friday said no such fund has been established. German Finance Minister Peer Steinbrueck told a news conference after the summit that the euro zone is ready to help any member country in need, but said no member is currently in that position.
Nevertheless, the European developments played into a market impulse for some stabilization and consolidation of the extreme moves of the previous two days, said National Bank's Spitz.
"The market was looking for reasons to pare back short dollar positions, and the ECB rumors were the catalyst and gave the market an opportunity to square up positions going into the weekend," Spitz said.
The corrective tone carried over into North American trading Friday, as U.S. stock markets continued to flounder despite the Federal Reserve's new liquidity injection plan, encouraging some investors to cautiously inch back into U.S. dollar positions on safe-haven considerations.
Currency markets showed little immediate reaction to comments Friday from Fed Chairman Ben Bernanke. He said the Fed's actions have helped the economy and the financial system and that he is encouraged by market response to the Fed's credit programs.
The U.S. currency had been battered severely by the Federal Reserve's announcement Wednesday of its new plan to revive the economy. Fears that a monetizing of U.S. debt would debase the dollar had placed the euro and other currencies on track for significant gains.
Even with Friday's advance, the dollar suffered its biggest single-week decline since 1985 on the dollar index (DXY), which measures the U.S. currency against a basket of six major currencies.
National Bank's Toronto-based managing director of foreign exchange Jack Spitz termed Wednesday's Fed actions a "watershed moment in terms of dollar sentiment globally."
Friday's quiet tone in currency markets stood in stark contrast to the tumultuous movements earlier in the week, when an already sagging dollar plunged in the wake of the Fed announcement that included the purchase of $300 billion in long-term Treasury bonds during the next six months, among other actions.
In trading characterized mostly by end-of-the-week position-squaring and illiquidity due to a holiday in Japan, the dollar rallied back against the euro and yen Friday, and notched more modest gains against a range of other currencies as well.
Nevertheless, the euro exited active trading with one of its biggest weekly advances versus the dollar since the single currency's introduction in 1999, said Brian Dolan, chief currency strategist at electronic trading platform Forex.com. The euro was up nearly 5% from $1.2920 a week ago.
Late Friday, the euro was at $1.3560 from $1.3678 late Thursday and the dollar was at Y95.90 from Y94.41, according to EBS. The euro was at Y130.07 from Y129.14. The U.K. pound was at $1.4440 from $1.4518. The dollar was at CHF1.1295 from CHF1.1228 Thursday.
The dollar's decline might have carried over into Friday were it not for the reversal that occurred in European trading when the euro suffered from chatter that the European Central Bank may be preparing to substantially increase its bailout plans for struggling euro-zone and eastern European economies.
Talk had been circulating during a two-day summit of European Union leaders in Brussels that the ECB had created a contingency fund to rescue troubled euro-zone economies, including those of Ireland and Greece.
But E.U. leaders, finance ministers and the ECB on Friday said no such fund has been established. German Finance Minister Peer Steinbrueck told a news conference after the summit that the euro zone is ready to help any member country in need, but said no member is currently in that position.
Nevertheless, the European developments played into a market impulse for some stabilization and consolidation of the extreme moves of the previous two days, said National Bank's Spitz.
"The market was looking for reasons to pare back short dollar positions, and the ECB rumors were the catalyst and gave the market an opportunity to square up positions going into the weekend," Spitz said.
The corrective tone carried over into North American trading Friday, as U.S. stock markets continued to flounder despite the Federal Reserve's new liquidity injection plan, encouraging some investors to cautiously inch back into U.S. dollar positions on safe-haven considerations.
Currency markets showed little immediate reaction to comments Friday from Fed Chairman Ben Bernanke. He said the Fed's actions have helped the economy and the financial system and that he is encouraged by market response to the Fed's credit programs.
Noose around stamp paper racket
Stamp papers from the Northeast are being smuggled to Bangladesh and Nepal to produce counterfeit Indian currency notes, sleuths have warned Dispur, prompting the government to put in place a verification mechanism.
All the district administration in the state have been asked to check the daily stock of stamp papers with the vendors and the indents sent by them.
“We are taking the matter very seriously and the district administrations have been asked to strictly monitor the stocks and take swift and stern action if anything was found amiss,” an official said.
Sleuths of state and central agencies stumbled upon the disturbing fact while investigating cases related to seizure of fake currency notes in various states of the Northeast during the past year.
A source in Assam police today said a probe into the method employed by the fake currency racketeers revealed that the stamp papers were used because of their “thickness” and “good quality”.
“According to the information available with us, they (the racketeers) are using stamp papers because their quality is very similar to the paper that is used to make currency notes at the government-owned Nasik Road India Security Press in Maharashtra,” the police source said.
“Usually, they first paste the original currency note on a piece of stamp paper, which is used for its thickness and good quality, and then they take coloured print-outs of that using the latest printing technology. The fake notes were generally used along with original notes in bulk amount to avoid detection,” he said.
It is believed that the printing dens are based in countries like Bangladesh and Nepal, which share porous international borders with India.
“After the new fact was unearthed, it became necessary that the state governments take every possible measure to tighten the noose around the unscrupulous stamp paper vendors to stop the illegal diversion of the stamp papers to the fake currency rackets,” the police official said.
The law-enforcing agencies — the police, the CID and the CBI — have also heightened vigilance to bust these international rackets, which are pumping fake currency notes into India in an attempt to destabilise the country’s economy.
What worries the security agencies, however, is the quality of the fake notes, which makes it difficult for even the sleuths to detect a fake note from an original one.
“Since these notes resemble the originals so closely that the police forces of the northeastern states are taking help from forensic experts for scientific examination of the seized notes to confirm their suspicion,” he said.
An official source at the Forensic Science Laboratory in Guwahati said one-third of the cases received by the laboratory last year were related to counterfeit currencies.
The laboratory has received the highest number of such cases from Mizoram followed by Assam in 2008.
“During examination of these fake currencies, it was found that the paper used to produce the fake notes was stamp paper,” the laboratory source said.
The single largest haul of last year — which was sent to the laboratory for examination by Mizoram police — contained several bundles of fake notes totalling Rs 25 lakh.
All the seized notes were of Rs 100, Rs 500 and Rs 1,000 denominations.
All the district administration in the state have been asked to check the daily stock of stamp papers with the vendors and the indents sent by them.
“We are taking the matter very seriously and the district administrations have been asked to strictly monitor the stocks and take swift and stern action if anything was found amiss,” an official said.
Sleuths of state and central agencies stumbled upon the disturbing fact while investigating cases related to seizure of fake currency notes in various states of the Northeast during the past year.
A source in Assam police today said a probe into the method employed by the fake currency racketeers revealed that the stamp papers were used because of their “thickness” and “good quality”.
“According to the information available with us, they (the racketeers) are using stamp papers because their quality is very similar to the paper that is used to make currency notes at the government-owned Nasik Road India Security Press in Maharashtra,” the police source said.
“Usually, they first paste the original currency note on a piece of stamp paper, which is used for its thickness and good quality, and then they take coloured print-outs of that using the latest printing technology. The fake notes were generally used along with original notes in bulk amount to avoid detection,” he said.
It is believed that the printing dens are based in countries like Bangladesh and Nepal, which share porous international borders with India.
“After the new fact was unearthed, it became necessary that the state governments take every possible measure to tighten the noose around the unscrupulous stamp paper vendors to stop the illegal diversion of the stamp papers to the fake currency rackets,” the police official said.
The law-enforcing agencies — the police, the CID and the CBI — have also heightened vigilance to bust these international rackets, which are pumping fake currency notes into India in an attempt to destabilise the country’s economy.
What worries the security agencies, however, is the quality of the fake notes, which makes it difficult for even the sleuths to detect a fake note from an original one.
“Since these notes resemble the originals so closely that the police forces of the northeastern states are taking help from forensic experts for scientific examination of the seized notes to confirm their suspicion,” he said.
An official source at the Forensic Science Laboratory in Guwahati said one-third of the cases received by the laboratory last year were related to counterfeit currencies.
The laboratory has received the highest number of such cases from Mizoram followed by Assam in 2008.
“During examination of these fake currencies, it was found that the paper used to produce the fake notes was stamp paper,” the laboratory source said.
The single largest haul of last year — which was sent to the laboratory for examination by Mizoram police — contained several bundles of fake notes totalling Rs 25 lakh.
All the seized notes were of Rs 100, Rs 500 and Rs 1,000 denominations.
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