How much was your total earning in the past year 2013 ?
2013 is one of the stressful year for Forex traders,do you believe this ?
It is due to the currencies that disobey price in one way or the other,most of prices out look for 2013 was totally fail,why ?
Productivity growth. When people get more productive it puts down inflation and pushes up GDP, simultaneously. This results in a rapid strengthening of the currency. This is one of the primary and lasting factor that moves a currency.
Inflation. Inflation is inversely proportional to currency strength.
Fiscal health of the government. Fiscal health roughly refers to a government’s budget position and how much debt it has taken. More debts and more budget deficits mean weak currency.
GDP growth. When everything else is the same, the currency of a growing economy is stronger than that of a weak economy.
Political stability. A nation undergoing strong political instability will not be trusted by global investors. This will cause a big outflow of capital.
Health of the financial system & banks. As we have seen in Cyprus, Iceland and elsewhere, if the banking system is weak, the entire economy is sent to the drain.
Trade Imbalance. Country with imports > exports will have its currency weakened. If this process is not interfered, a country’s exchange rate will drop enough to make the imports equal to the exports.
Capital outflow. China and Japan invest a lot in the US (through treasuries) and this capital outflow weakens their currency.
Interest rates. Higher interest rates attract more capital.
Restrictions on capital flow. If more restrictions are imposed, currency weakens in the medium term, though in the long-term things can even out if everything else is the same.
Investment opportunities. If the economy is open to investments and there are a number of attractive, investable assets, currency moves up due to inflows.
Portfolio investments from Foreign Institutional Investors (FII) and domestic institutions. Investment flows push up the currency and vice versa.
Stability and fiscal condition of neighbors or peers in the same economic category. If China catches cold, investors will also sell their Indian currency holdings. This is a bane of a highly interconnected world market. When one country is in trouble, investors often get scared of all countries similar to that.
Market psychology of traders in the global Forex market. These traders can push a currency up or down based on their feelings and psychology. But, in a forex market no one is powerful enough to force a currency’s movement in the long-term.
Major purchases or sales of the currency by businesses.
Trading actions of the central bank. A country’s reserve bank constantly plays in the market and that can directly or indirectly affect the exchange rates in the short term.
Stock market and real estate market movements. A rising stock market is an indicator that the economy is sound. This will push up the country’s exchange rates.
Change in consumer habits (touring overseas more or having a fad on imported goods)
Risk appetite has been an improving trend since the end of August
A combination of an easing of global tensions surrounding Syria and encouraging economic data has helped to shore up worldwide investor sentiment. Analysts note that the Baltic Dry Index has rallied in recent days, pointing to an improvement in global growth prospects in the months ahead.
Euro Bulls Ready To Charge On Taper 'Lite' Chatter Dean Popplewell Dean Popplewell Contributor
Syrian Proposal Lifts Investor Sentiment But Will FOMC Inflate Buck? Dean Popplewell Dean Popplewell Contributor
Chinese Premier Li Keqiang said the foundations of a growth rebound are not solid
China’s leader has cautioned that stimulus will not help resolve deep-rooted issues in the world’s second-largest economy. He reiterated recently that China would push forward interest rate and exchange rate reforms, as well as the internationalization of the Yuan, while promoting the currency’s convertibility under the capital account. The People’s Bank of China fixed USD/CNY to a record low of 6.1575 overnight.
The Reserve Bank of New Zealand grows more hawkish
The RBNZ reiterated its guidance to keep rates unchanged this year as expected, but added a more explicit tightening bias with a comment that “Overnight Cash Rate increases will be required next year.” Kiwi policymakers have brought forward their expected timing for the first hike to June, 2014, from September, 2014, and raised its 90-day interest rate projections by +20bps to +50bps across the forecast horizon. There were no attempts to talk down the NZD in the communiqué (0.8134).
Weak employment data Down Under
Australia’s employment data surprised many with a weak reading, falling -10.8k last month versus consensus for a +10k gain. The details were also disconcerting: full-time employment fell -2.6k pushing the unemployment rate to a four-year high of +5.8% from 5.7% in July, while the labor participation rate dropped to 65% from 65.1% (0.9232).
The Bank of England’s forward guidance
The Executive Director of the BoE, Paul Fisher, insists that the Bank’s “forward guidance” policy will support the British economy by making existing monetary stimulus more efficient. Governor Mark Carney says that the message is understood. The rally that made the GBP the best-performing major currency of the past six months is again gathering momentum as the U.K. economy continues to defy skeptics and analysts alike (£1.5812). Meanwhile, Eurozone Industrial Output fell sharply in July to its lowest level in three years (-1.5%), raising new questions about the currency bloc’s ability to keep a modest economic recovery alive – EUR falls from 1.33.
U.S. Treasury yields have lost some upside momentum
Though tapering worries have eased (10′s +2.894%), in-turn providing relief to risk assets including emerging market currencies, the USD continues to lose ground and it looks vulnerable to further slippage.
Gold prices have lost most of their allure
Insofar as safer retreats go, gold sits at $1,340, down -$78 in the last 10 days. Thank the diplomatic efforts between the U.S. and Mother Russia over the calamity in Syria for the drop. U.S. Secretary of State, John Kerry, is to meet Russia’s Foreign Minister, Sergei Lavrov, later today in Switzerland to weigh Russia’s proposal for removing stockpiles of chemical weapons in Syria and placing them under international control.
A weaker USD/JPY (¥99.33) has managed to drag the Nikkei 0.2% lower
2013 is one of the stressful year for Forex traders,do you believe this ?
It is due to the currencies that disobey price in one way or the other,most of prices out look for 2013 was totally fail,why ?
Productivity growth. When people get more productive it puts down inflation and pushes up GDP, simultaneously. This results in a rapid strengthening of the currency. This is one of the primary and lasting factor that moves a currency.
Inflation. Inflation is inversely proportional to currency strength.
Fiscal health of the government. Fiscal health roughly refers to a government’s budget position and how much debt it has taken. More debts and more budget deficits mean weak currency.
GDP growth. When everything else is the same, the currency of a growing economy is stronger than that of a weak economy.
Political stability. A nation undergoing strong political instability will not be trusted by global investors. This will cause a big outflow of capital.
Health of the financial system & banks. As we have seen in Cyprus, Iceland and elsewhere, if the banking system is weak, the entire economy is sent to the drain.
Trade Imbalance. Country with imports > exports will have its currency weakened. If this process is not interfered, a country’s exchange rate will drop enough to make the imports equal to the exports.
Capital outflow. China and Japan invest a lot in the US (through treasuries) and this capital outflow weakens their currency.
Interest rates. Higher interest rates attract more capital.
Restrictions on capital flow. If more restrictions are imposed, currency weakens in the medium term, though in the long-term things can even out if everything else is the same.
Investment opportunities. If the economy is open to investments and there are a number of attractive, investable assets, currency moves up due to inflows.
Portfolio investments from Foreign Institutional Investors (FII) and domestic institutions. Investment flows push up the currency and vice versa.
Stability and fiscal condition of neighbors or peers in the same economic category. If China catches cold, investors will also sell their Indian currency holdings. This is a bane of a highly interconnected world market. When one country is in trouble, investors often get scared of all countries similar to that.
Market psychology of traders in the global Forex market. These traders can push a currency up or down based on their feelings and psychology. But, in a forex market no one is powerful enough to force a currency’s movement in the long-term.
Major purchases or sales of the currency by businesses.
Trading actions of the central bank. A country’s reserve bank constantly plays in the market and that can directly or indirectly affect the exchange rates in the short term.
Stock market and real estate market movements. A rising stock market is an indicator that the economy is sound. This will push up the country’s exchange rates.
Change in consumer habits (touring overseas more or having a fad on imported goods)
Risk appetite has been an improving trend since the end of August
A combination of an easing of global tensions surrounding Syria and encouraging economic data has helped to shore up worldwide investor sentiment. Analysts note that the Baltic Dry Index has rallied in recent days, pointing to an improvement in global growth prospects in the months ahead.
Euro Bulls Ready To Charge On Taper 'Lite' Chatter Dean Popplewell Dean Popplewell Contributor
Syrian Proposal Lifts Investor Sentiment But Will FOMC Inflate Buck? Dean Popplewell Dean Popplewell Contributor
Chinese Premier Li Keqiang said the foundations of a growth rebound are not solid
China’s leader has cautioned that stimulus will not help resolve deep-rooted issues in the world’s second-largest economy. He reiterated recently that China would push forward interest rate and exchange rate reforms, as well as the internationalization of the Yuan, while promoting the currency’s convertibility under the capital account. The People’s Bank of China fixed USD/CNY to a record low of 6.1575 overnight.
The Reserve Bank of New Zealand grows more hawkish
The RBNZ reiterated its guidance to keep rates unchanged this year as expected, but added a more explicit tightening bias with a comment that “Overnight Cash Rate increases will be required next year.” Kiwi policymakers have brought forward their expected timing for the first hike to June, 2014, from September, 2014, and raised its 90-day interest rate projections by +20bps to +50bps across the forecast horizon. There were no attempts to talk down the NZD in the communiqué (0.8134).
Weak employment data Down Under
Australia’s employment data surprised many with a weak reading, falling -10.8k last month versus consensus for a +10k gain. The details were also disconcerting: full-time employment fell -2.6k pushing the unemployment rate to a four-year high of +5.8% from 5.7% in July, while the labor participation rate dropped to 65% from 65.1% (0.9232).
The Bank of England’s forward guidance
The Executive Director of the BoE, Paul Fisher, insists that the Bank’s “forward guidance” policy will support the British economy by making existing monetary stimulus more efficient. Governor Mark Carney says that the message is understood. The rally that made the GBP the best-performing major currency of the past six months is again gathering momentum as the U.K. economy continues to defy skeptics and analysts alike (£1.5812). Meanwhile, Eurozone Industrial Output fell sharply in July to its lowest level in three years (-1.5%), raising new questions about the currency bloc’s ability to keep a modest economic recovery alive – EUR falls from 1.33.
U.S. Treasury yields have lost some upside momentum
Though tapering worries have eased (10′s +2.894%), in-turn providing relief to risk assets including emerging market currencies, the USD continues to lose ground and it looks vulnerable to further slippage.
Gold prices have lost most of their allure
Insofar as safer retreats go, gold sits at $1,340, down -$78 in the last 10 days. Thank the diplomatic efforts between the U.S. and Mother Russia over the calamity in Syria for the drop. U.S. Secretary of State, John Kerry, is to meet Russia’s Foreign Minister, Sergei Lavrov, later today in Switzerland to weigh Russia’s proposal for removing stockpiles of chemical weapons in Syria and placing them under international control.
A weaker USD/JPY (¥99.33) has managed to drag the Nikkei 0.2% lower
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