Foreign exchange specialists

ECB divided over debt

The euro has weakened further versus its major counterparts amid signs of division among European governments over how to stem the regions debt crisis. ECB Executive member Stark has today called on governments to take action to solve the sovereign debt crisis. He noted that the ECB is “not in charge of fiscal policy” and that “our mandate is not to make it easier for governments to refinance their debt”. For the euro, focus this week will be on the EU summit and whether any new mechanism to deal the sovereign debt problems is agreed upon.

The US Dollar is trading marginally higher in a relatively quiet start to the week with market participants easing into an end of year trading style. Looking ahead, tomorrows FOMC policy meeting will have investors paying close attention to what the Fed has to say. Any signs of downplaying the need for additional quantitative easing, while at the same time sounding more upbeat on the outlook for the economy, will likely open a fresh round of dollar buying.

Data released in Britain overnight showed that UK home sellers cut asking prices for a second month in December to the lowest level in almost a year and may reduce them by a further 5 percent in 2011. Sterling showed little reaction to the news, though it did ease back slightly versus the dollar and euro. Ahead this week, Consumer Price Index figures are due for release with the BoEclosely watching whether headline prices remain stubbornly high amid the challenging growth outlook.

All in all, a quieter week is expected in the markets.

How to earn through forex

Modernity allowed things to become a lot easier, and this includes forex trading. It is a fact that earning profits hasn’t been deemed as easy or convenient for lots of individuals worldwide, however with the web based forex trading it is safe to say that getting rich instantly is quite possible.

Currency trading or forex trading is a multi-billion business for this reason earning money specifically in this sector is not difficult and the reason why so many people are attempting their luck by committing to this occupation.

Online businesses are sprouting out like mushroom in the internet and since forex trading has also joined in the bandwagon, more people are now able to have to be able to quickly make income using it.

Note that, trading foreign currency doesn’t have someone to be a college graduate or be amazingly brilliant. As a matter of fact, you can be just the guy next door and still make big and serious money, like the other professional traders. How is this possible, the secrets is in the software or forex robot large amounts of online traders are using nowadays.

Forex robots are the tool to help newbies and professional traders continually generate income night and day. So, regardless if you are sleeping or playing your computer game your software alternatively is making a killing online. It is for this reason why it’s much easier to trade online.

What’s more, the beauty of online forex trading is the reason that you do not have to invest massive amount capital to begin with. Plus, you can safely try first to help you learn even more about the system to guide you in the long run.

Moreover, since online forex trading or foreign exchange refers to the exchanging of the currencies worldwide. Buying low and selling high is the key to getting rich instantly.

So in order to be one of the numerous successful traders and investors, It is suggested that you just consider online forex as the next financial venture.

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Vietnam More Credit Worthy than Portugal and Spain?

You may have read that European bond spreads have widenend to record levels but how bad is that really? To put everything into perspective, investors are demanding more premium to lend to Ireland, Portugal and Spain than to emerging countries in Europe and Asia. To be more specific, these 3 European countries that have made headlines on a daily basis are now considered less credit worthy (or are assumed to be a greater risk) than Romania, Lebanon, Vietnam and Indonesia. The following table shows the current 5 year credit default swap spreads for some of the major countries. Triple A rated countries such as the U.S., Switzerland, Germany, Denmark and Sweden have swap spreads less than 50bp.

For those of you that are unfamiliar, the Credit Default Swap (or CDS) spread is the premium paid by a protection buyer to the protection seller over a length time. If a default occurs, the protection seller would have to cover the losses. The CDS spread is quoted in basis points per annum of the contract’s notional amount.
In case you are curious, the two countries that have the lowest CDS swap spreads and are therefore considered the most credit worthy are Norway and Finland.

Top 10 Forex Blogs

Here’s a list of my top 10 forex blogs. I follow these blogs via my RSS reader on a regular basis, and I find them interesting and very informative. I think they should be on every forex trader’s feed. Last updated on May 27th 2010.
So, here are my top 10 forex blogs:

1. Kathy Lien - Head of currency research at Global Forex Trading (GFT). She provides interesting technical and fundamental analysis, forex signals and strategies. A significant part of posts are of her interesting TV interviews.
2. FXPath: Great technical analysis by forex expert James Chen. He’s also the author of the book: Essentials of Foreign Exchange Trading.
3. Currency Thoughts: Larry Greenberg, a veteran currency economist brings forex news from many places all over the world, and in-depth analysis of current events.
4. Forex Blog: This forex blog is written by Andrei. Since 2006, Andrei’s excellent blogs forex news,  updates on forex software  (including code), technical lines and lots more.
5. Forex Blog: Adam Kritzer writes technical and fundamental analysis about the forex market. He has a special interest on China’s growing role in currency markets.
6. Forex Magnates: Michael Greenberg focuses on bringing up to date news about the forex industry with a very clever analysis. His blog also consists of occasional forex news, analysis, and educational resources.
7. Francesc Riverola: CEO of FXStreet provides forex industry news, detailed statistics of his big forex portal and spices up his blog with other stuff as well.
8. The Forex Articles: James Wooley speaks his mind regarding forex strategies, forex trading ideas and more.
9. Trading U – Chicago Blog: Jay Norris writes about psychological effects of forex trading, trading patterns, technical analysis and much more.
10. Winners Edge Trading: Last but not least, Casey Stubbs at Winners Edge Trading, with a special focus on one of the most popular currency pairs: EUR/USD. His great posts about trading psychology also have a big share in his content.

Important notes:

War = Good News for South Korea?

South Korea was in the midst of figuring out what to do with its appreciating Won when disaster struck, in the form of an unprovoked attack from North Korea. Combined with a worsening of the sovereign debt crisis in Europe, the news was enough to send the Won down 5% over the course of a couple weeks. From the standpoint of managing its currency, it looks like the (distant) prospect of war is actually a blessing in disguise.
Over the last decade, South Korea has been one of the world’s largest serial interveners in currency markets. Over the last two years alone, as evidenced by the growth in its foreign exchange reserves, it has spent more than $100 Billion defending the Won. As the so-called currency war has intensified, so, too has the Bank of Korea intensified its efforts to hold down the Won, having spent more than $20 Billion since July towards this effort.

You could say then that South Korea’s hosting of the G20 Summit on November 15 put it in a slightly awkward position. Still, it was determined to make clear that it would continue to take steps to combat the rise in the Won. According to Shin Hyun-song, the special economic advisor to President Lee Myung-bak, “This means that countries can intervene in the currency market when the market is in disorder and when there is a gap between the market rate and underlying economic fundamentals.” Of course, fundamentals is hardly an objective notion in this case.
While the G20 predictably called on participants to “move toward a market-driven exchange rate system and to refrain from competitive devaluations,” it nonetheless also guided them towards “implementing policy tools for bringing excessive external imbalances down to sustainable levels.” The underlying message is that certain countries should curtail their reliance on exports and try to achieve more balanced growth.
Naturally, South Korea’s interpretation was that while direct intervention is now taboo, taxes and other capital controls are sanctioned. Thus, it has been reported that “the Korean government has been gauging its timing to launch further measures to tighten the financial market and protect it from volatile global capital movement..bank levies on non-deposit liabilities and taxes on foreign purchases of government bonds are both possible options.”
As I said, though, the South Korea now has some breathing room. Its Won depreciated rapidly in the minutes after the shelling of Yeonpyeong island, which killed four and wounded 20, was first reported. The fact that the US government immediately pledged its support and solidarity (by sending over an aircraft carrier) is not instilling confidence. One analyst indicated, “We see a strong chance of further Korean won weakness in the days ahead as more details emerge, particularly if public opinion in South Korea puts pressure on the government there to take a stronger stance.”

Even before this episode, the EU sovereign debt crisis had spread to Ireland, and put Spain and Portugal at risk, too. As a result, the Dollar-as-safe-haven mindset re-emerged, and spurred some capital movement back to the US. In this context, the drama with North Korea only exacerbated the climate of risk aversion.
Ultimately, both the EU fiscal crisis and the tensions with North Korea will subside, which should cause the Won to resume its rise. (In fact, Korean exporters have come to view this as inevitable, and have taken advantage of the relatively favorable exchange rate to repatriate overseas earnings). At this point, you can expect the Bank of Korea to begin implementing capital controls and continue the face-off with currency markets.

Advantages Of Online Forex Trading

A foreign currency exchange naturally acquires no fee or transaction charge in addition to the quoted spread. This is in great difference to the equity market, where fees for stock trades choice from 8 to 70 USD or yet higher, as well as the quoted spread.

Profit possible in spite of forex market direction:

An investor with an open position is by meaning long one currency and shorts one more. If a trader trusts a foreign currency is about to decrease in value, he or she sells that currency short and goes long a new currency. In the foreign exchange market, selling or shorting is an essential part of carrying out a foreign trade. Profit possible survivals in the Forex market in spite of whether a trader is buying or selling and in spite of whether the market is going up or down. In the US equity markets, short-selling is fewer general and harder to carry out because of dissimilar regulations and market rules. This creates it harder to create a profit.

No limits in foreign currency exchange:

No limits are relevant to the foreign exchange and there are extremely small account balances. This denotes that traders can take pleasure in profit chances in all market situations.

A foreign exchange rate is the comparative value among two currencies. More especially it is the needed amount of one currency to buy or sell one unit of one more currency. This is as well named a pairing; Euro to dollar at 1.3250 denotes that one Euro can be exchanged for 1.3250 US dollars.

Get To Be Comfortable With Pips Values In Currency Trading

A trading platform refers to the software in which the online forex trade is taking place. Foreign exchange trading has shifted online in the software coded by programmers where real time investors tend to participate in the trading process.

The forex trading software brings in several sellers and buyers from different part of the world in an iconic representation in the software. The buying and selling takes place via an online account.

When you are trading in forex it is important that you get used to the meanings of the terms pips and lots. You will come across this terminology very often while you are in to the forex trading process.

It is important that you get to be comfortable with pips values before you start up with any kind of currency trading process.

What is pip? Ideally, this is the difference in the quotation of the currency pair. Ideally this is the differences between the last decimal place in the quotation. This is the method that is important to help you asses your profit and loss in forex trading.

Every currency that you are going to trade with is going to have its own value. So, there has got to be a reference standard for the currency you are trading with in the forex trading platforms. So, without pip you might not be able to trade the different currencies.

Apart from having a proper understanding of the PIP it is important that you get used to the lot size in forex trading. Currencies will be usually traded in lots and based on the platform you are trading in you need to know what 1 lot means.