Latest Economic News Overview

USD

USD Gaining on Negative Fundamentals

After stock markets plummeted to a 12-year low this past week, the USD apparently responded with a strong appreciation in value. Against its primary currency rival - the EUR - the greenback gained almost 100 points in early trading hours, and is currently trading near the price of 1.2600. It made similar gains against the GBP as it started the day at 1.4314 and currently stands near 1.4260.

Lately the U.S. Dollar has been strengthening as a result of a weakening global economy. With talk of multiple bailouts, stimulus bills, and stipulations for domestic investment, many large hedge funds are beginning to bank on those currencies which benefit from protectionism. Economies which rely on exports typically suffer the most from protectionism, whereas those economies which import more possess the ability to regain lost momentum during times of international draw-back. The USD is benefiting from just such an action.

Many banks and large financial firms are pulling out of risky investments and into safe-haven currencies, the Dollar being the primary safe-haven among them. As a result, traders are seeing a reversal to typical economic outcomes. With more negative news coming from every economy, traders may actually expect the value of the primary global safe-havens - the USD and Gold - to continue their rally and gain levels of strength not seen in decades. The coming week will be no different considering a multitude of economic indicators are expected to be released, all of which are forecast to show a continuation of economic suffering across the boards.

EUR

EUR Weakness Evident as Investor Confidence Writhes in Anxiety

Losing value to the majority of its currency pairs these past few trading days has made the EUR look less and less appetizing for willful traders. Trading down against the USD, just under the 1.2600 price barrier, the pair has been gaining momentum on its downward slide. Against the British Pound, the EUR is also taking losses, trading close to the 0.8840 price level in today's early trading hours.

Not helping this large regional currency was the fact that the European Union (EU) rejected recent calls for additional aid to Eastern European countries in need of financial assistance. What many analysts feared all along might just come true. The Euro-Zone is appearing to polarize into rival camps with the potential of instituting trade restrictions and protectionism within the region. Large economies, such as Germany, are pairing against the smaller, harder-hit economies of East Europe. Investors are bailing out of the 16-nation currency as a result.

After a series of economic data which has highlighted just how weak the Euro-Zone economy has become, the European Central Bank (ECB) appears poised to slash interest rates yet one more time to a record low of 1.50%. Britain may also be following this rising trend by cutting their rates by 50 basis points as well to 0.50% this Thursday. Traders have begun to price in these upcoming rate cuts and many investors believe this week will be one of the more interesting weeks in forex trading for 2009 thus far.

JPY

JPY Weakness Growing More Apparent

Those investors trading the JPY lately have taken note of the recent downward trend occurring with this island currency. When the global economic recession began, there was a rush to unwind carry trades when interest rates were being slashed. This helped strengthen the JPY. As economies posted continuous negative data the JPY became a safe-haven. However, nowadays the JPY is also showing signs of continued stress which has investors worried that the Japanese economy may not be able to withstand the rising tide.

Trading at record highs against its currency rivals in recent months, the JPY now stands to lose most of what it has gained. The foreboding of such a disastrous turn of events for Japan, this currency weakness will no doubt harm the island economy in ways which it may struggle to recover from. The JPY is currently trading at its lowest level in 2009, with a reading of 97.55 against the Dollar and 122.67 against the EUR. Traders won't likely see this trend reverse anytime soon.

Source: Forexyard

How To Guarantee Failure In Forex Trading

Right now due to the Worldwide economic crisis Forex trading has become one of the most exciting new ‘games’ in town. The stakes are variable enough that almost anyone can play, and the potential winnings are high enough to tempt even the most conservative into the running. There’s something romantic and dashing about trading in money – something that stock, bonds and mutual funds just don’t have. With trillions of dollars changing hands everyday, it seems like everyone’s got a fail-safe method that will make you rich overnight.

Here are nine failsafe facts that will guarantee that you fail in forex trading.

1. There is a failsafe method to make money on every trade.

Just like there’s no such thing as a free lunch, there’s no such thing as a failsafe method. You WILL lose money on some trades, it’s inevitable. Expecting to always win is a guarantee that you will hang on to trades long past the point that an experienced trader would have found an out.

2. You don’t need to know anything about the market to make money in it.

Not knowing your playing field is a sure way to hit every bump and hole in it. It’s not enough to read a few articles from your dealer. You need to make a concentrated effort to understand the forces that drive the market so you’ll know the best times to make a move.

3. You can play a winning game by making frequent trades with small profits.

If your goal is to make a few hundred dollars a day, you may be ahead of the game, but you’re seriously limiting your profit potential. The only people getting rich on frequent tiny trades are the dealers taking commission on them.



4. You don’t need a plan to make money in the currency market – making money IS a plan.

Trading without a well-thought out plan is like jumping out of a plane without a backup chute. Your plan is what keeps your eye focused on your goal, and gets you through the inevitable losses. Currency trading isn’t a short-term game, but most new traders (95%) quit within the first year because they didn’t have a plan to follow.

5. If you stick with a losing trade long enough, it will turn around.

Sticking with a losing trade is a good way to lose more money. When a deal isn’t going the way that you expected, it’s hard to admit that you were wrong and get out – but it’s the best way to avoid losing even bigger money. Winning on one trade isn’t going to make you rich overnight. Consistently knowing when to get out – whether it’s to cut your losses or grab your winnings – is the way to be a successful currency trader.

6. Where there’s smoke, there’s fire.

Rumors are just that – rumors – 99% of the time. If you want to win at the game, base your trades on reality, not hearsay. On the other hand, rumors can alert you to look at what’s really happening and make a decision based on the movement that you see.

7. The more currencies you trade, the better your chances are of scoring a big profit.

The more you know about a currency, the easier it is to predict how and when it will move. The more intimately you understand the way it behaves, the better your chances are of consistently making successful trades in that currency. If you’re trying to focus on too many different currencies, you’ll be spreading yourself too thin to really get to know any one of them.

8. Thinking long-term and trading short-term is a sure way to make money in the long run.

That’s one of those logical fallacies that sound good on the surface. Look at it more closely though. If you’re trading in the short term, then you need to keep your eyes on the short term rather than trading to what you think the market will be in a week. Today is today – if you make your best trade today every day, you’ll consistently be ahead of the game.

9. The way to make money in forex is to always have a trade in motion.

Sometimes there just isn’t a trade that’s going to profit you. Making a trade just to make a trade is a sure way to do yourself no good – and possibly a great deal of harm.

Online Forex Trading

The Forex market is not something new, it exists for over thirty years. Prior to the advent of the Internet, Forex trading was mainly done via phone, fax or in-person orders. Most of the trading could only be executed during business hours as well as the activities related to Forex, like deposits and profit taking.

The Internet has caused a radical change in the way Forex trading is conducted throughout the world. The Internet made it possible around-the-clock trading and conveniences such as the use of credit cards for fund deposits. With the introduction of computers, and then the Internet, the Forex market continues to grow as more and more people and businesses alike became aware of this trading market and were given easier access to it.

Online foreign exchange trading occurs in real time. The exchange rates change so rapidly, in intervals of seconds, that the quotes are accurate for the exact time they are displayed only. A different rate may be quoted at any moment. When a trader locks in a rate and executes a transaction, that transaction is immediately processed and the trade completed.

Due to the constant changing rates the Forex software used for online trading must be able to provide real time access to the most current exchange rates, to deal and order making, to deposits and withdrawals and to monitoring the status of positions and trader's accounts. Online trading platforms normally operate 24 hours a day just as the Forex market.

There are two basic steps to fulfill before you can start trading online:

1. Register at a trading platform: registration is done online and the basic information required is the trader's name, address, e-mail, telephone, and sometimes an ID number (passport, SSN or driver's license). The information requirements may vary from one trading platform to another. As part of a global anti-money laundering policy the registrant must declare that the funds used for trading are not the result of money laundering or any criminal activity.

2. Deposit funds: after registering, funds must be deposited to facilitate trading. Many Forex platforms require that, in addition to the funds used for trading, an additional amount be deposited as a “maintenance margin”, which works in fact as an additional guaranteee.

Some trading platforms require the download and installation of specific software that will grant access to trading only to computers that have the software. Others have fully web-based systems that enable trading to be conducted from any computer connected to the internet from anywhere in the world.