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Forex Trading Scam Check List
http://www.forexconspiracyreport.com/forex-trading-scam-check-list/ Forex Trading Scam Check List By www.ForexConspiracyReport.com Even been told by someone that they could trade your hard earned money in the Forex markets? Did they say that you were virtually guaranteed healthy profits because of the great track record of the trader involved? And have you heard about Forex Ponzi schemes, Forex pyramid schemes and the fact that in trading Forex currency rates there is no free lunch? Here is our home grown Forex trading scam check list to help you avoid losing money in a Forex scam. It starts with the Roman adage about buyers being careful and ends up with our usual admonition to check out tips, always do your own homework and sit on the sidelines when you do not understand the market. Forex Trading Scam Check List • What Guarantees Does the Trader Offer? • Do You Get References? • Have You Checked the References? • Is the Amount of Money Involved Excessive? • How Quickly Can You Get Your Money Back? • Is There a Trial Period? • And, if this is such a great deal why are they letting you in? Let us say that you have just learned about this spectacularly successful Forex trader in Switzerland who routinely pulls in twenty percent gains each and every month. You gain access to a spreadsheet that proves this. And you see that six months your $100,000 can turn into nearly $300,000 and just one year you see that your $100,000 will be nearly $900,000. Wow! Or is it wow??? Beware of the multiplicative power of a Microsoft Office spreadsheet. All that the person who makes up the spreadsheet needs to do is put in a set of formulas and copy down the page. Any Forex trader in the real world will tell you that even with spectacular results you never see such a great result month after month after month. So: • Is There a Guarantee? • Can You Pull Out Your Money after a Month, Two or Three without a Penalty? • How Fast Do You See Your Money if You Pull Out? • And, just why do they need money in increments of $100,000? Your own Forex trading scam check list should contain at least these questions and you should ask these questions before sending any money to this guy. You may be told that the offer is closing fast and you had better send money now or you will be left out. Get his email or phone number and contact the attorney general in your state and the Securities and Exchange Commission. If he gave you references be sure to check them out and that does not mean just a phone call but a chance to meet in person. If you are going to ante up a quarter of a million dollars it is worth a face to face meeting, photo the person giving the reference and even proof that they really are an investor with the person involved. Conspiracies, Large and Small Last week we posed the question, Are There Really Forex Conspiracies? It turns out that there are! Do not fall victim to a con game. This starts with trading your own capital, learning how and taking care. It progresses to learning how the markets act and trading accordingly. And it hinges not being greedy. If the guy is telling you that there is really a free lunch, ask him to pick up the check right now at that fancy restaurant where he is giving the spiel about his infallible trading system. http://youtu.be/y4nWl-e3PYg
Views: 3086 ForexConspiracy
Trading BRICS Currencies
Trading BRICS Currencies Economists have estimated that by 2050 the economies of Brazil, Russia, India, China, and South Africa will surpass those of the G7 nations in gross domestic production. Along the way the currencies of the so called BRICS nations will likely prosper as well versus G7 currencies. Trading BRICS currencies may well be profitable, both betting on a slow and steady surge in value and trading BRICS currencies during periods of volatility versus the current major currencies. A viable strategy for foreign currency trading in the years ahead may well be to focus on the economic shift of the BRICS nations versus the G-7. The G-7 nations currently account for just over fifty percent of global GDP. G-7 nations include Canada, France, Great Britain, Italy, Japan, the United States, and Germany. Mexico and South Korea, according to some, belong in the BRICS group but most economists consider these nations more economically advanced and closer to being on par with the G-7 nations. Nations that may well enter the economic realm of the BRICS nations in the next few years include Turkey, Indonesia, and Nigeria. From the viewpoint of trading BRICS currencies all of these are nations and currencies to watch. Which Currencies to Trade Let us make the general assumption that the BRICS nations and others mentioned above will continue to prosper and come on par with the current world economic leaders. Over the long term it would seem logical to invest in these nations and gain both as investments prosper and as their currencies grow in value. But, to make money trading Forex we need to trade currencies with diverging values. Thus it might make more sense to trade G-7 currencies versus BRICS currencies. The G-7 currencies, plus Australia are the major Forex currencies (Italy, France, and Germany use the Euro). If you do so you will be trading a major versus a minor Forex currency. Trading a BRICS currency versus a BRICS currency will amount to trading two minor Forex currencies. Although the situation may changes as the BRICS economies grow there is still much larger trading volume when major currencies are involved. This provides a degree of stability to trading and makes technical analysis more accurate. Many times it is not possible to trade one minor currency versus the other but rather one trades the first versus the US dollar and then the US dollar versus the second currency. BRICS Buying Dollars When trading BRICS currencies versus the majors, especially the dollar, remember that Japan, Taiwan, and China have made an art form out of buying US dollars in order to keep the dollar strong and their own currency relatively weaker. These nations do this in order to preserve an advantage in exporting products, especially to North America and Europe. When trading BRICS currencies the trader must keep abreast of the economic and central bank policies of the nations involved. Doing so will allow the trader to benefit from the ups and downs of these currencies as they steadily advance in value compared to the current major currencies. http://youtu.be/NjfSVmzMZKY
Views: 2194 ForexConspiracy
Four Steps to Cell Phone Tower Profits
http://www.forexconspiracyreport.com/four-steps-to-cell-phone-tower-profits/ Four Steps to Cell Phone Tower Profits There are potential investment gold mines all around. Just go for a drive and look. Look up, that is. A great investment can be a cell phone tower. The first of four steps to cell phone tower profits is to go find the cell towers near you. Why are we talking about cell phone towers? Mobile phone companies pay leases to property owners to use on the tops of buildings, towers on places like athletic fields, and hills in the country. They put up mobile phone masts across the country to insure that cell phone communication is possible throughout their service areas. These deals can be lucrative with a good monthly return as well as guaranteed increases over time. In fact, the first of four steps to cell phone tower profits is to lease space to a mobile phone company and collect the rent checks. But, what if you do not own property? Our four steps to cell phone tower profits really have to do with finding cell phone sites, acquiring those sites, and selling for a handsome profit. There will be some work as well as creative thinking along the way and there can be a pot of gold at the end of the cell phone tower rainbow. Cell Phone Towers The mobile phone masts are the backbone of the cell phone industry. They are a necessity and phone companies pay, sometimes dearly, for the privilege of putting a tower on a ridgeline on a farm, at the top of a tall building, or existing radio or TV transmission towers. There are tens of thousands of these sites across the USA and Canada. Cell Tower Gold estimates that over a third of a million sites are available for purchase, rehab, resale, and profits. The first of our four steps to cell phone tower profits is to find these assets. Where Are the Cell Phone Towers? Go for a Sunday drive and look around. Bring the kids and make a game of it. Or go online to sites like www.AntennaSearch.com. Talk to the commercial realtors in your city in case a property is available that happens to have a cell tower on it. And, drop it to the country tax office to check the records. The first of our four steps to cell phone tower profits is the find the towers. Just What Does the Owner Want and Need? The art of making a successful business deal is to find a solution that makes both parties happy. The owner of a cell phone tower may be happy to sell the lease, sell the property itself with the lease, or sell his whole business, including the cell phone lease. To the extent that you can relieve the current owner of a burden you may have success in your second of four steps to cell phone tower profits. Value Enhancement There are two basic ways to make a business more profitable or an asset more valuable. One is to increase income. The other is to reduce costs. If you can purchase a property with a cell tower on it and find a way to reduce taxes you will have increased the value of that asset. If you can take over property that is vacant and fill it with new businesses you increase the value of the property. This sort of "rehabbing" is common in the real estate industry and can be used as one of four steps to cell phone tower profits. There Are People Looking to Buy Cell Towers The prospect of owning a cell tower, collecting lease payments, and getting yearly increases in the lease payments is attractive to many investors. As part of your four steps to cell phone tower profits find investors who want these properties and will reward you for finding properties and setting up the deal. Then, with no capital spent, you can profit handsomely in the world of cell phone towers. If you would like more information about this amazing and unique opportunity, please join our mailing list. We will be sending more information over the next few weeks in our newsletter. For more information about this amazing opportunity, please visit http://www.celltowergold.com http://youtu.be/EcDh3KrPB94
Views: 3824 ForexConspiracy
US Dollar Versus Oil
http://www.forexconspiracyreport.com/us-dollar-versus-oil/ - US Dollar versus Oil - There is commonly an inverse relationship of the US dollar versus oil. On hopeful news the other day that Europe may be on the way to solving its debt crisis, the Euro rose, the dollar fell, and commodities, including oil, rallied. Remember that commodities like crude oil are commonly quoted in US dollars. When the US dollar weakens it does not necessarily mean that there is less demand for crude oil. Thus, as dollar falls, the price of oil often adjusts, upward. Many trading foreign currencies watch oil prices as indications of where the dollar is going and exchange rates of the dollar versus other currencies to anticipate where oil prices are going. Another aspect of the US dollar versus oil prices is that the US economy is the largest in the world. If industrial production is down in the USA the demand for oil falls as well. A weaker US economy commonly leads to both a weaker dollar and lower oil prices. The producers and users of commodities such as oil and its products of distillation commonly trade options on Forex contracts in order to hedge the currency risk of international transactions. The variation of the US dollar versus oil and versus other currencies can be dramatic over the several months that may elapse between signing of a contract and delivery of crude oil, gasoline, or aviation fuel. Traders may simply trade options on Forex contracts or they may trade options on oil futures. Doing so successfully can make the difference between a satisfactory price for a product and a devastatingly high or low price, depending upon whether one is a producer or customer. Not all of the US dollar versus oil relationship has to do with the strength of the dollar or demand based upon the health of the US and global economy. Supply is also an issue. In fact it is an issue for both dollars and oil. First of all oil supply can be precarious. Civil unrest in Nigeria can shut down production, the civil war in Libya certainly did, and the unrest in Egypt and overthrow of long term president Mubarak threatened to close down shipments through the Suez Canal. Today Iran threatens to close the Straits of Hormuz through which an eighth of the world's oil supply flows. The US Navy patrols the area and sends battle groups through the straits in a show of force. If tensions rise in the region oil prices could skyrocket and not based on a US dollar versus oil formula, simply based upon scarcity. Interestingly, the supply of US dollars is rising. As part of the Bernanke Doctrine the US Federal Reserve is buying US treasuries in an effort to keep interest rates low. They are doing so with printed money. The world lost trillions of dollars in equity during the 2008 market crash and its aftermath. Housing values are down. Stocks are down. By printing currency both the US and EU are staving off the second dip of the worst recession in three quarters of a century and striving to keep nations like Greece, Italy, Spain, and even France from defaulting on their national debts. The question here regarding the US dollar versus oil is if twice as many dollars floating around will devalue the dollar and make oil spectacularly more expensive. http://youtu.be/s_43107OYfM
Views: 4991 ForexConspiracy
Why Is Japan Selling US Treasuries?
http://www.forexconspiracyreport.com/why-is-japan-selling-us-treasuries/ Why Is Japan Selling US Treasuries? By www.ForexConspiracyReport.com Next to China, Japan is the biggest holder of US debt. And Japan is having second thoughts. Why is Japan selling US treasuries? Bloomberg writes that America’s biggest creditors are dumping treasuries as a warning to Trump. In the age of Trump, America’s biggest foreign creditors are suddenly having second thoughts about financing the U.S. government. In Japan, the largest holder of Treasuries, investors culled their stakes in December by the most in almost four years, the Ministry of Finance’s most recent figures show. What’s striking is the selling has persisted at a time when going abroad has rarely been so attractive. And it’s not just the Japanese. Across the world, foreigners are pulling back from U.S. debt like never before. From Tokyo to Beijing and London, the consensus is clear: few overseas investors want to step into the $13.9 trillion U.S. Treasury market right now. The prospect of more deficit spending in the USA is part of this as is the odds that interest rates will be going up making current holding less valuable. The chaos that is the Trump administration has rattled investors and that is why Japan and others are selling U.S. treasuries. How quickly might this change the U.S. debt market? Back in 2008 fifty-six percent of US debt was held by foreigners and today that number is 43%. The problem for those who want to dump US treasuries is that if everyone goes to sell at once the price goes down and foreigners as well as Americans lose. Nevertheless Japan, China, the Brits and others are gradually gettin rid of US debt. What will the end result be? Too Much Debt and Too Few Buyers There are two problems here, first is the administration’s desire to cut taxes without a guarantee that there will be matching revenues from increased business. Second is the risk of a trade war and subsequent depression. If no one wants to buy US debt rates will go up until there are buyers. This will hugely increase the cost of servicing America’s debt. According to fixthedebt.org US debt held by the public, domestic and foreign debt holders, is $14 Trillion or 75% of the US GDP. Add in debts owed to other parts of the Federal Government such as the Social Security Trust fund and debt is $19 Trillion or 105% of the GDP. This can be expected to get worse under Trump’s policies. The web site lists the expected effects of an ever increasing national debt. Higher costs of living: Large amounts of debt mean higher interest rates on everything from credit cards to mortgage loans. Slower wage growth: In normal economic times, every dollar an investor spends buying government debt is a dollar not invested elsewhere in the economy. That is, high debt “crowds out” more productive investments, leading to slower economic growth and lower wages. Generational inequality: By not making responsible debt choices, we are placing higher debt burdens on our children and threatening their standard of living and retirement. Reduced fiscal flexibility: Our debt levels doubled between 2008 and 2013 from 35 percent of GDP to over 70 percent, a result of and in response to the Great Recession. We can’t afford another recession. With an already high debt, the government has less room to respond to future crises such as international events or economic downturns. Fiscal crises: Unchecked debt growth could eventually lead to a fiscal crisis, as recently occurred across Europe. At that point, investors in U.S. debt will demand higher returns, driving up interest payments, and leading to a debt situation spiraling out of control. Japan, China, Britain and others have problems of their own. They are selling US treasuries because they doubt the full faith and trust of the American government in the era of nationalist anger personified by the current president. https://youtu.be/jI0Bl_XZDEk
Views: 1308 ForexConspiracy
Who Will Buy US Treasuries?
http://www.forexconspiracyreport.com/who-will-buy-us-treasuries/ Who Will Buy US Treasuries? By www.ForexConspiracyReport.com The Japanese are now the largest holders of US debt ahead of the Chinese. Although the Japanese stockpile of debt is falling the Chinese are selling treasuries faster than the Japanese in order to support the Yuan in the face of massive capital outflow. Who will buy US treasuries if this keeps up? And how will the inability to finance US debt affect interest rates and the US dollar? Bloomberg reports that Japan overtakes China as the largest holder of U.S. treasuries. China’s holdings of U.S. Treasuries declined to the lowest in more than six years as the world’s second-largest economy uses its currency reserves to support the yuan. Japan overtook China as America’s top foreign creditor, as its holdings edged down at a slower pace. A monthly Treasury Department report showed China held $1.12 trillion in U.S. government bonds, notes and bills in October, down $41.3 billion from the prior month and the lowest investment since July 2010. The portfolio of Japan decreased for a third month, falling by $4.5 billion to $1.13 trillion, according to the data. Collectively, the two nations account for about 37 percent of America’s foreign debt holdings. Other countries holding significant amounts of US treasuries include Ireland, Cayman Islands, Brazil, Switzerland, Luxembourg, U.K., Taiwan and Hong Kong, all in the $100 billion to $200 billion range. Borrowing, Interest Payments and Foreign Debt According to the US Treasury web site, Treasury Direct, the expected interest paid on US debt in 2017 will be $51,696,798,645.73. Interest expense on debt outstanding is low for the amount of debt the US has because of historically low interest rates. According to the Center on Budget and Policy Priorities, our federal tax dollars are not enough to cover the budget and the government needs to borrow more each year. In fiscal year 2015, the federal government spent $3.7 trillion, amounting to 21 percent of the nation’s gross domestic product (GDP). Of that $3.7 trillion, over $3.2 trillion was financed by federal revenues. The remaining amount ($438 billion) was financed by borrowing. Thus the USA is paying $51 billion this next year on debt and adding debt each year. That debt will come on line at higher rates. But if foreign countries like China and Japan are selling their US treasuries how will the USA finance its debt? The choices are to reduce expenses or pay higher rates to attract buyers of US treasuries. Social security takes 24% of the budget and health care subsidies take up 25%. Defense takes up 16% and various federal safety net programs take 10%. At the current time interest on debt uses 65% of the budget. If the two main buyers of US treasuries are selling them who will buy and how high will they bid up interest rates in order to take on more US debt? Higher interest rates will make the US dollar stronger which in turn will hurt US exports and jobs. Combine that with a Trump-inspired trade war and things could get nasty. https://youtu.be/lwDClcybSn0
Views: 612 ForexConspiracy
Forex Options Volatility Index
http://www.forexconspiracyreport.com/forex-options-volatility-index/ Forex Options Volatility Index By www.ForexConspiracyReport.com A useful tool for stock trades is the VIX index. Is there also a Forex options volatility index? VIX is a trademarked ticker symbol for the Chicago Board Options Exchange Market Volatility Index. This index is a popular measure of the implied volatility of S&P 500 index options. The VIX is commonly called the fear index or the fear gauge. It measures traders’ expectations of stock market volatility over the coming 30 days. Many stock traders include this index in their market assessment and trade more profitably than without it. The closest thing to a Forex options volatility index also comes from the Chicago Board Options Exchange. It is the CBOE EuroCurrency ETF Volatility Index. What exactly is this Forex options volatility index and how does it help traders? CBOE EuroCurrency ETF Volatility Index According to the CBOE, the CBOE Eurocurrency volatility index measures the market's expectation of 30-day volatility of the $US/Euro exchange rate by applying the VIX methodology to options on the CurrencyShares Euro Trust (Ticker - FXE). Like other VIX benchmarks, EVZ uses options spanning a wide range of strike prices. FXE is an exchange-traded fund (ETF) that holds Euro on-demand deposits in Euro-denominated bank accounts. As such, the performance of FXE is intended to reflect the $US/Euro exchange rate, less fund expenses. Thus the Forex options volatility index that can be applied to trading the USD/EUR currency pair is the CBOE EuroCurrency ETF Volatility Index, So, what does a volatility index really tell us? Volatility Indexes According to Investopedia a CBOE volatility index provides a view of investors' expectations on future market volatility. VIX values greater than 30 are generally associated with a large amount of volatility as a result of investor fear or uncertainty, while values below 20 generally correspond to less stressful, even complacent, times in the markets. In short a high VIX number predicts a volatile market and a low VIX number predicts a tranquil market. The Forex options volatility index, CBOE Eurocurrency volatility index, for the USD/EUR pair applies to trading the US dollar versus the Euro. Forex Market Signals A VIX index is a signal. It does not tell us if the market is going up or down. It tells us that a lot of traders are uncertain. A comparable Forex trading signal is the Doji signal in the Japanese Candlestick system. The Doji Candlestick signals a change in a trend and momentary market indecision as this switch occurs. The appearance of a Doji after a long uptrend is a warning to investors that the trend is either close to peaking, or has already peaked in the open markets. On the other hand, after a long downtrend the exact opposite is true and prices have been forced down. There are four types of Doji candlesticks that investors must learn before day trading stock online using Japanese candlesticks. These four types include the common Doji, the long-legged, the dragonfly, and the gravestone. Signals such as the Forex options volatility index for the USD/EUR pair give the trader a clue as to coming market changes. They should never be used alone but in concert with sound fundamental analysis of the currency pair and up to the minute analysis of market sentiment. http://youtu.be/9LVWR9Nrk4w
Views: 303 ForexConspiracy
Profiting from Cell Phone Tower Leases
http://www.forexconspiracyreport.com/profiting-from-cell-phone-tower-leases/ Profiting from Cell Phone Tower Leases An attractive investment opportunity is leasing sites for cell phone towers. If you have a hilltop on your farm, a tall building in a city or town, or open space on which to build a tower, you may already be profiting from cell phone towers. On the other hand Cell Tower Gold tells us that of the hundreds of thousands of cell phone tower sites in the USA, about 370,000 properties may be available for purchase. Profiting from cell phone tower leases may be as simple as purchasing property and a lease. Many investors would like to receive lease payments for a cell site. These typically pay well and commonly cell tower leases have an escalator clause so that payments increase every year. These investments are similar to buying dividend stocks that do not increase in value but provide a comfortable rate of return year after year. Other ways of profiting from cell phone tower leases include flipping properties or having a buyer lined up and setting up the deal. We recently wrote about four steps to cell phone tower profits. If this subject interests you read on. And, consider the short course offered by Cell Tower Gold. Background Cell towers hold mobile phone masts. These are the relay stations in the mobile phone grid. They are placed close enough to each other so that ideally there is unbroken reception throughout the phone network. You can typically find the cell phone sites in your area by going for a drive and looking up at buildings and towers. You can also go online on www.AntennaSearch.com. Although a small percentage of cell phone towers are owned outright by the phone networks, over ninety percent are privately owned and the land or space is leased to the phone company. These leases are long term and commonly have an escalator clause to at least keep up with inflation, or better. Profiting from Cell Tower Leases Your first step in profiting from cell tower leases is to find cell towers and their owners. Find out if the person is happy with his or her situation or if there are issues that you can exploit in order to gain a cell phone lease or even an entire property. Many times profiting from cell tower leases involves a bit of rehabbing which is common to the real estate industry. A failing business may need a cash infusion as may a growing business. If you are willing to pay a lump sum for the right to a cell tower lease, with or without the total property, you may gain access to long term lease payments. If you have a buyer lined up you may be able to negotiate payment of a percentage of the deal, your expenses, and payment for your time. There are, in fact, investors who like this sort of property and who will pay to have someone else do the leg work. If you would like more information about this amazing and unique opportunity, please join our mailing list. We will be sending more information over the next few weeks in our newsletter. For more information about this amazing opportunity, please visit http://www.celltowergold.com http://youtu.be/tirLnPUX7R8
Views: 1570 ForexConspiracy
Forex School
http://www.ForexConspiracyReport.com - Forex School Many beginning Forex traders wish there were a Forex school where they could learn the basics of currency trading. They would like to progress grade by grade in this Forex school to graduation. Then, with a diploma from their Forex school in hand they would enter the world of trading foreign currencies. There certainly are many ways to learn Forex trading and one can find the equivalent of a Forex school online. There are also business schools where one can learn a lot more about the factors that affect Forex trading. No matter where one starts, however, he needs to study and apply himself in order to develop the knowledge and skill sets needed to trade successfully. Then he typically uses the services of a coach in order to integrate what he knows in order to trade successfully. This is the equivalent of graduate Forex school. Whether Forex training, or Forex school, is formal or casual the things to learn in order to trade successfully are the same. The beginning Forex trader will need to set up a trading account with a broker, purchase and learn to use compatible software, and set up a trade station with a broad band internet connection. The beginning Forex trader will go to Forex school online or on his own to learn about the characteristics of currencies he wants to trade. He will learn about how currencies are traded in pairs. Thus the important factor is how one currency relates to another and not how the two relate to other pairs. He will learn to read and understand economic, employment, interest rate, and other data from the countries who currencies he trades. He will follow the news as it relates to various currencies. A large part of going to Forex School is learning the technical aspects of trading currencies. The fundamentals are quickly discounted by the market but there is profit to be made in trading the market reaction to changes in interest rates, pronouncements of central banks, or the US Federal Reserve Board chairman before congress. Traders learn to develop Forex trading strategies in order to profit from somewhat predictable market reactions to the Forex news. Major international news such as the civil war in Libya, unrest in other nations of North Africa and the Middle East, and the aftermath of the devastating earthquake and tsunami that hit Japan can drive markets into turmoil. At such times of high trading volume and high market volatility traders often resort to buying options, either puts or calls, in order to profit when a currency value moves as anticipated while, at the same time, protecting himself against an unexpected prove movement. Buyers of foreign currency options only risk the price of the premium paid to buy the option as they are not obligated to execute an options contract and will only do so if it is profitable. Although selling options in Forex is often more profitable over time one thing that one learns in Forex school is that the occasional large losses incurred by options writers make this the business of large institutional investors.
Views: 730 ForexConspiracy
Japanese Candlestick Forex Signals
http://www.forexconspiracyreport.com/japanese-candlestick-forex-signals/ Japanese Candlestick Forex Signals There are a dozen major Japanese candlestick Forex signals and forty signals in all. Japanese candlestick signals evolved from rice trading in ancient Japan. These technical trading signals are strong indicators or subsequent market action. Their strong advantage is their clarity. Japanese candlestick trading signals do not show up every day in currency trading. When they do they are useful in achieving profits in predicting changes in foreign currency rates. What follows is and quick overview of Japanese candlesticks and then a brief listing and over view of the dozen major Japanese candlestick Forex signals. Japanese Candlesticks Japanese candlestick Forex signals are pictorial representations of price action in the Forex market. The day's trading is represented by a vertical rectangle. This is the candle. It is white when the day ends higher than when it started and black otherwise. Its ends represent the opening and closing prices for the day. Lines extending from the top and bottom of the candle are called shadows and represent the full range of trading for the day. A trading signal can be one or more unique candlesticks. Here are the dozen major signals for helping predict changes in foreign currency exchange rates. Dark Cloud Cover This dark sounding name is for a two candle set that predicts a reversal of a recent up trending market. The first day trades up. The second day gaps higher on open and falls significantly to close slightly above the previous day's opening price. The Dojis Doji - virtually flat candle with upper and lower shadows Gravestone Doji -- virtually flat candle at the very bottom of the trading range Long Legged Doji - virtually flat candle with one or two very long shadows The principle information that one gains from the various Doji patterns is that the market is indecisive. In a flat market this is useless information. In a market that has been trending up or down it is often a strong indicator of a reversal. Engulfing Patterns Bullish Engulfing Pattern - short black candle on day one and much larger white candle on day two, "engulfing" the first candle Bearish Engulfing Pattern -- short white candle on day one and much larger black candle on day two, "engulfing" the first candle Each Japanese candlestick Forex signal indicates a market reversal in the direction of the second day candle. Piercing Pattern This pattern is a bottom reversal signal. It consists of two candles. The first is long and black. The second is white and starts lower that the first after a gap down to open on the second day. The white candle is as long as the black. Hammer This signal consists of a relatively short white candle with no upper shadow and a long lower shadow. At the bottom of a down trend it predicts an upward reversal. The Stars Morning Star - three candles, first black and long, second small and white below the first, third white, long and higher than the second Evening Star - three candles, first white and long, second black and small above the first, third black and long below the second Both of these are reversal signals that predict that the market will move in the direction set by the last candle. Shooting Star- a short candle with a very long upper shadow and no lower shadow This signal predicts a market reversal after an established trend. Trading Forex with candlesticks gives a trader a clear view of market sentiment in a set of very precise market conditions. Smart traders learn to confirm these signals before jumping in. http://youtu.be/F3eG53dZd2o
Views: 4226 ForexConspiracy
World Reserve Currency
World Reserve Currency http://www.theforexnittygritty.com/forex/world-reserve-currency Most Forex traders view the US dollar as a safe haven currency. After all, the USD accounts for nearly two thirds of foreign currency reserves held by the central banks of the world. The Euro holds second place with just under a fourth of all currency reserves. There are a number of advantages to the USA of having what amounts to the world reserve currency. Virtually all commodities are denominated in US dollars. The USD is part of eighty-five percent of all Forex trades. Many foreign contracts are written in US dollars even though the USD is not the home currency of either party. And, when the United States wants to borrow money to finance its ever-growing debt, everyone still is willing to purchase United States Treasuries with their currency. There is no risk in the short term that this situation will change because of the fact that the US economy is far and away the largest in the world. However, there are a couple of concerns regarding the status of the dollar as the world reserve currency. These are the risk of debt default due to a malfunctioning political system in the USA and continuing long term devaluation of the USD. Risk Hedging versus Speculation Foreign currency trading serves two purposes. First and foremost the Forex market exists to facilitate international trade and the movement of wealth. Companies that do business in the international arena and people who earn their money in unstable regions of the world prefer a stable currency for doing business and storing wealth. The second purpose is speculation. Currency speculators do not especially care for stable currencies. Rather they would prefer that the USD is going up or down but not standing still. The status of the USD as the world reserve currency affects its use in international trade and it especially affects the use of the USD as a safe haven currency. Short versus Long Term Competition for World Reserve Currency Status Given the economic weakness of the European Union and speculation as to its breakup the Euro poses no short term threat of the USD as world reserve currency. China is intent on making the Yuan an international currency. However, the Yuan exchange rate is fixed within a government prescribed trading range. And, the Yuan is to a large degree an instrument of economic and political policy of the ruling Communist regime in Beijing. The Chinese economy is a fraction of that of the USA and would need to continue its breakneck pace of the last couple of decades to catch up. And cracks are showing in the Chinese economic miracle just recently addressed by the Communist hierarchy. In all likelihood no one is going to want to store value long term in Yuan when they can put all or part in the USD, Euro, British Pound, or Swiss franc. To be a world reserve currency means that the currency needs to engender confidence. The Euro is currently questionable. None other is as strong. And until China lets its currency float with the market it will engender no confidence as a safe haven or world reserve currency. Threats to the USD as World Reserve Currency The USD will probably adjust downward a bit as the Fed continues its quantitative easing program. It may jump up as the Fed backs off and interest rates go up. But over time a weaker dollar will help the USA bring manufacturing back home and stimulate the economy. If the dollar continues to fall, year after year, it could eventually be too cheap to be a world reserve currency. After all who wants to hold a currency that is on its way to being worth pennies on the dollar? This scenario is not likely to happen and certainly not in the near future. However, a viable threat is the current dysfunction of the US government. Those who wish to park their wealth in a stable currency are not pleased to think that tomorrow they will not receive interest on their US treasuries or that the US could default on its sovereign debt. To quote Abraham Lincoln, if destruction be our lot we must ourselves be its author and finisher. Or, we have met the enemy and he is us, Pogo Possum. http://youtu.be/9-h3VSX6hvk
Views: 2028 ForexConspiracy
Trading the Colombian Peso
http://www.forexconspiracyreport.com/trading-the-colombian-peso/ Trading the Colombian Peso By www.ForexConspiracyReport.com In 2012 the Colombian peso out distanced all other currencies versus the US dollar. Now trading the Colombian peso has to do with anticipating when the currency will hit bottom versus the dollar and when the price of crude oil will come back up. In December Bloomberg reported that the peso leads global losses due to the massive fall of oil prices. Colombia’s peso fell to a five-year low and led losses among world currencies as the price of crude oil, the Andean nation’s biggest export, sank to a five-year low. The peso sank 2 percent to 2,396.69 per dollar at the close in Bogota, the weakest since April 2009. The drop was the biggest among 31 major currencies tracked by Bloomberg. The peso has tumbled 12 percent in the past month. That was when Brent crude fell below $65 a barrel. Today Brent crude contracts for March 2015 trade at $56.09 a barrel and one dollar buys you 2,406.5 Colombian pesos. The last months have been active for those trading the Colombian peso. What does the future hold? A Weaker Peso Favors Colombian Exports Crude oil is priced in US dollars. But items manufactured or grown in Colombia are denominated in now-weaker pesos and sell more cheaply in world markets. Reuters reports the Colombian finance minister saying he is comfortable with the weakened peso! Colombian Finance Minister Mauricio Cardenas said on Thursday that the peso, which has lost a fifth of its value against the U.S. dollar in 12 months, was trading at an "adequate" level, one that will boost local manufacturing. "The dollar's current level is one we consider adequate. It seems to us it is a level that will enable many Colombian companies not only to export, but also very importantly, Colombians will start to favor national products because imports will become very expensive," he said. For the time being the Colombian central bank is not taking any measures to raise the value of the peso such as buying pesos with their dollar reserves. And, the price of oil has fluctuated before taking the Colombian peso with it. Thus it can be expected that when oil starts to recover so will the peso. Raising Taxes to Balance the Budget Colombia’s current budget was based on the assumption of $100 a barrel oil. As oil revenue has fallen so have tax revenues. The nation has to increase taxes to cover expenses. The Bogota Post analyzes how the Colombian peso is hit hard by the fall in oil. This situation causes a number of problems. Firstly, the dramatic drop in the price of oil means that Colombia’s original 2015 budget is no longer worth the paper it was written on. The country made assumptions on earnings based on a price of oil which no longer applies. This has been adjusted for by raising taxes to plug the budget deficit, but analysts are already saying a further tax hike may be necessary if the price of oil continues to fall. Secondly, although Colombia is not an oil economy in the same way as, for example, Venezuela, oil still accounts for a large portion – over 50 percent – of the country’s exports. If prices stay low in the long-term, the country will be forced to adjust the peso and cut public sector spending to make up for the sudden loss of income. While Colombia muddles through with a weaker peso traders may expect to see the COP recover, as it always does, when the economy improves and the price of oil rises. http://youtu.be/h6owkxCX5bM
Views: 2088 ForexConspiracy
Forex Profit Multiplier
http://www.ForexConspiracyReport.com/FPM - After a LOT of research and testing by one of the Forex trading community's most seasoned trading "veterans", he finally came up with a way to MULTIPLY your profit potential in these highly lucrative markets in 60 seconds or less of active trading... - and he's re-opening access RIGHT NOW to his complimentary presentation that reveals his discovery here: http://www.ForexConspiracyReport.com/FPM http://www.youtube.com/watch?v=BBpzt4JNafY
Views: 20349 ForexConspiracy
Are We Seeing the Death of Dollar Pegs?
http://www.forexconspiracyreport.com/are-we-seeing-the-death-of-dollar-pegs/ Are We Seeing the Death of Dollar Pegs? By www.ForexConspiracyReport.com More and more currencies pegged to the US dollar are coming under pressure. As speculators bet against the currencies of Saudi Arabia, Hong Kong and others, are we seeing the death of dollar pegs? Bloomberg Business says that in regard to bending dollar pegs, reserves keep them from breaking. Countries with currencies pegged to the dollar are coming under increasing attacks by traders who bet it’s become too expensive for policy makers to continue defending exchange rates amid a soaring greenback and a collapse in commodities prices. It may be the speculators who end up losing. It’s a tempting trade. Already, Kazakhstan, Azerbaijan and Argentina have been forced to devalue, and derivatives tied to the Saudi Arabia riyal and Hong Kong dollar suggest traders expect it won’t be long before the same happens to those currencies. Options prices put the odds of the Hong Kong dollar weakening beyond the weaker end of its current trading range this year at 36 percent, Bloomberg data show. Together, Saudi Arabia and Hong Kong hold $1 trillion in foreign reserves, or enough to cover their imports and spending for years. Devaluations would only serve to destabilize their economies and could undermine Hong Kong’s status as Asia’s financial center, the analysts say. Hong Kong Monetary Authority Chief Executive Norman Chan on Monday reiterated his commitment to keeping the exchange rate’s existing link to the U.S. dollar. But what if a nation does not have strong reserves? And what happens when reserves run out? Because low commodity prices are at the root of the pressure on pegged currencies, how long will oil and other commodities remain weak? When Will the World Economy Revive? The world economy is slowly weakening and taking commodity prices and currency values with it. The Washington Post reports the IMF downgrades its outlook for the world economy. The International Monetary Fund on Tuesday lowered its forecast of global economic growth over the next two years amid the deepening slowdown in emerging markets and a continued slump in oil prices. The IMF now projects the world economy will grow 3.4 percent this year and 3.6 percent in 2017. That pace would be faster than last year, but the projections are 0.2 percent points lower than the IMF estimated in the fall - a sign that the global recovery is still struggling to build momentum. China is expected to see its growth rate fall to 6.3% this year and 6% in 2017. Nations like Brazil that profit from seeing raw materials to China are suffering. Nations whose currencies are pegged to the US dollar are seeing their exports priced out of foreign markets as the dollar rises while other currencies plummet. The temptation is to unpeg ones currency from the USD in order to avoid this dilemma. But there is a price to pay for unpegging for economies like Hong Kong. Hong Kong Dollar Hong Kong is an Asian financial center which position might be hurt by unpegging from the USD. The Hong Kong Standard reports the details of the HK dollar hitting a four year low against the USD. The level reached the midpoint of a 7.75-7.85 trading band under the currency peg with the greenback. It was "a matter of time that the outflow of funds from the HK dollar will lead to the triggering of the weak side," said HKMA chief executive Norman Chan Tak-lam. Chan said there are no plans to drop the peg. For his part, Secretary for Financial Services and the Treasury Ceajer Chan Ka-keung said a faster pace of capital outflow might mean Hong Kong has to raise the interest rate sooner than some had forecast, although he believed a rise would be gradual. The course for Hong Kong will be to adjust interest rates and make other internal modifications in order to cope, and not unpeg from the USD. That does not say that Hong Kong, Saudi Arabia, China and others will not let the peg range gradually slide to weaker levels! As always when trading currencies, do your own homework first. https://youtu.be/kwdNwGiq25o
Views: 808 ForexConspiracy
How To Trade Currency
http://www.theforexnittygritty.com - Learning how to trade foreign currency can lead to profits as the currencies of the world rise and fall. To profit in foreign exchange trading a trader watches both the fundamentals of various currencies and technical factors that drive market price. For example, the dollar rose in Forex trading the other day as a result of stronger than expected economic reports. After that traders waited for minutes of a Federal Reserve Board meeting, looking for hints of any changes in monetary policy, especially anything that would lead to changes in interest rates. Meanwhile, individuals at trade stations bought dollars with Euros and sold Swiss francs with Yen with the intent of profiting from the changes in relative value of currency pairs of the major currencies of the world. How to trade Forex successfully is to learn the basics of how to trade currencies and then learn the specifics of currencies that the individual wants to trade. The basis of how to trade currency is that currencies are traded one on one. This only makes sense because the Forex market evolved to support foreign trade. A company buys a product from a producer in another nation. The company pays with its own currency and the producer needs to change the currency for its own. Likewise, the company may need to convert its currency to that of the producer in order to make payment. The foreign exchange market provides an orderly means of providing a fair rate of exchange from one currency to the other. How to trade currency is to deal through a broker or dealer who is connected electronically with one of the major Forex markets, New York, London, or Tokyo. The trader picks a currency pair such as the EUR/USD pair. This means trading Euros for American dollars. Other major currencies include the Yen, British Pound, and Swiss franc as well as the Canadian and Australian dollars. These currencies are called the majors. They trade in high volume and high liquidity. The trader will almost always work from a trade station from which he is connected through his broker to one of the markets. This is done via an electronic communications network and allows the Forex trader to buy and sell currencies based upon technical analysis of short term price fluctuations. How to trade currency most successfully requires a thorough knowledge of the fundamentals of each currency that one chooses to trade. This means learning about the economies of each nation, their monetary policy, and any other factors such as local politics that will drive the value of their currency in relation to those of other nations. Once the trader knows the basics of the currencies he wishes to trade he will follow the markets to decide which trading situations looks the most profitable. He will learn how to trade Forex online. How to trade currency most profitably requires being in the right currency pair at the right time. An alternative for how to trade currency is to trade currency options. These work much like stock options in that the trader will purchase the option to buy one currency for another. He purchases this option and will execute it if conditions are profitable. He is under no obligation to make any purchase so he will only lose the price of the premium paid if the currency he wants to buy heads down when he expected it to go up. http://www.youtube.com/watch?v=oNuJhPYKvq8
Views: 2544 ForexConspiracy
Three Ways to Avoid Losing Money in Forex
http://www.theforexnittygritty.com/forex-trading/three-ways-to-avoid-losing-money-in-forex Three Ways to Avoid Losing Money in Forex By www.TheForexNittyGritty.com There are good and bad reasons to trade the Forex market. Proponents of trading foreign currencies note that the Forex market is huge and trades nearly twenty-four hours a day. Major currency pairs include the Yen, Euro, British Pound and the US dollar which is part of eighty-five percent of all trades. These currencies trade in high volume and liquidity making technical analysis more accurate. Proponents also note that you can trade with high degrees of leverage such as 100 to 1. However, there are winners and losers in each and every trade. With that thought in mind we take a contrarian approach and consider three ways to avoid losing money in Forex. Three ways avoid losing money in Forex may well include simply not trading foreign currencies but we assume that you are reading articles on this site because you want to trade Forex. So, read on for our three ways to avoid losing money in Forex. Remember That Trading Currencies is a Business Forex trading in the Forex market is a job. Forex trading can be a very lucrative job with wonderful Forex profits. You make your Forex profits in the Forex market by doing your homework, knowing your Forex software, and being well versed in the Forex market currency pairs you work with. But Forex trading is with real money and for every person who makes Forex profits there is a person who does not. In fact for every person who makes a lot of money there may be lots of people who lose money. The first of our three ways to avoid losing money in Forex is to take the job seriously. That means learning the necessary skills, showing up for work on time every day, doing your homework and learning to manage your trading capital. Getting In, Getting Out, and Keeping a Reserve to Exploit Opportunities as They Arise The second of our three ways to avoid losing money in Forex specifically has to do with managing and protecting trading capital. Forex trading is not gambling and you should never bet your money all in on a hunch. Good traders analyze the fundamentals of the currencies that they trade and they keep up to date on a daily basis. They also follow evolving market sentiment with technical analysis tools. Smart traders use specific signals that are based on statistical analysis to set up and execute trades. They do not go looking for trades but let the trades come to them. And smart traders always, always set their trading stops so that they limit their losses in sudden market shifts. And they pay attention so that they can adjust their stops as a currency rises in value. The most important aspect of this is to always keep part of your trading capital in reserve. First and foremost this assures that you will not be wiped out in a big market swing. So while you are letting profits mount in one trade you will be able to take advantage of a golden opportunity that comes along at the same time. Do Not Be Too Much of a Contrarian Be careful not to assume that no one makes money in Forex. Study, patience, and execution are by themselves three ways to avoid losing money in Forex. You can trade all day in simulation trading to build up your skill set. There is nothing wrong with spending an hour or two a day reading up on factors that drive currency prices. No one ever lost money simply watching the market when things are confusing. And learning to push the button at the right time, get in, get out and count your money is absolutely possible. http://youtu.be/oSHmpHZi_D8
Views: 2550 ForexConspiracy
Competitive Devaluation of Forex Currencies
http://www.theforexnittygritty.com/forex/competitive-devaluation-of-forex-currencies Competitive Devaluation of Forex Currencies Today in the world of Forex exchange trading there appears to be a competitive devaluation of Forex currencies. That is to say, more and more central banks are buying other currencies, setting low interest rates, or running up debt as a means of reducing the value of the home currency. To understand how this competitive devaluation of Forex currencies will play out let us first look back in history. As Japan rose from the ashes of World War Two it built its economy on exports to North America and Europe and later to the rest of the world. Cheap and poorly made products were the first wave and then Japan emerged as a maker of high end electronics, automobiles and more. When Made in Japan was meant cheap it was easy to sell low priced goods to willing customers in the USA especially. When Japanese goods improved and become more expensive Japan had to find a way to keep prices down and exports up. Thus Japan bought foreign currencies, primarily US dollars and by way of currency manipulation kept the Yen low and kept its exports flowing. To a great degree the current competitive devaluation of foreign currencies is an attempt to follow the Japanese model. But, how is that going to work out? And what should someone who speculates on foreign currency rates do, to profit in the coming weeks, months, and years? What Is Good for One Is Good for Two, Three, or Four Currency devaluation as national policy worked for Japan and then for Taiwan, South Korea, and Mainland China. The problem may have started when China industrialized and started trading with the rest of the world. Its economy grew and attracted investment. China flooded the world with underpriced goods and may well have been part of the cause of the worst recession in 75 years. The result of the recession was and is that North Americans and Europeans are buying less from China, South Korea, Taiwan, and Japan and thinking seriously about devaluing their own currencies. The stated reason for devaluing Western currencies is to stimulate Western economies. However, a beneficial side effect of these policies is to make it profitable to bring industry back to the West. Now we are not talking about half a dozen strong economies manipulating the currency markets. We are seeing the USA and EU, far and away the two largest economies in the world, seeking to devalue their currencies. Who will win this competitive devaluation of currencies? And how can a Forex trader make a profit? Long Term Trends and Short Term Detours Fundamental analysis of Forex pairs tell us where the eventual relative values of a currency pair will stand. Technical analysis of Forex pairs is essential to short term profits. If the major economies choose to devalue their currencies then we can expect to see the USD and EUR being substantially cheaper over time. However, when the US decides to ease off on its stimulus program, for example, expect a short term rise in the value of the USD as interest rates rise in the USA. http://youtu.be/39tGZm89dio
Views: 365 ForexConspiracy
Increased Bond Yields Drive the Dollar Higher
http://www.theforexnittygritty.com/forex/increased-bond-yields-drive-the-dollar-higher Increased Bond Yields Drive the Dollar Higher The US Federal Reserve has stated its intention to reduce its bond buying program known as quantitative easing. The US central bank has been purchasing $85 Billion in US treasuries every month. This policy was meant to stimulate the US economy, keep interest rates down, and help relieve unemployment. It was never intended to be permanent. As the end of this policy approaches the bond market has reacted with large scale selling and interest rates have risen. As a general rule increased bond yields drive the dollar higher. The USD rose against most major currencies and reached a three week high against the yen. While increased bond yields drive the dollar higher the Euro is maintaining strength on news that the European Central Bank does intend to drive interest rates down as the recession in the EU is finally relenting. Before looking at how this will affect foreign currency trading let us look at just what quantitative easing is. What Is Quantitative Easing? Quantitative easing or QE is an unconventional monetary policy. It has only been used when standard monetary policy is not successful in stimulating an economy. A central bank implements QE by buying financial assets from commercial banks and other private institutions. This increases the money supply. The goal is to keep interest rates low. In addition the central bank buys government bonds as another measure to keep interest rates low. This policy was used by the Bank of Japan to fight deflation in the early 2000's. It has been used by the European Union, Great Britain and the United States since the onset of the Great Recession of 2007 and forward. QE 1, 2, 3 and the USD The US Federal Reserve has had three rounds of quantitative easing, QE 1, QE 2 and QE 3. QE 3 will be phased out by mid-2014 according to the Feds. In the first round the Feds purchased $2.1 Trillion in bank debt, mortgage backed securities and treasury notes. In the second round the Fed purchased an additional $600 Billion of US Treasuries. QE 3 started in the fall of 2012 with bond purchases of $40 Billion a month and raised the amount to $85 Billion in December of 2012. The Fed program of quantitative easing was successful in that it helped the nation recover from the recession. And it was never intended to be permanent. But when the Fed chairman announced an eventual end to the program stocks fell and bond owners sold. Bonds have gone up as increased bond yields drive the dollar higher as well. What many traders anticipate is a further rise in the US interest rate. As increased bond yields drive the dollar higher there is the potential for profits in online currency trading. The ten year bond has been trading just under 3% and experts expect rates to go up to nearly $5 by the end of the third quarter of 2014. As increased bond yields drive the dollar higher traders will watch both fundamental analysis of Forex pairs and technical factors in predicting price movement and searching for profits. http://youtu.be/bSrCw2gtJtY
Views: 360 ForexConspiracy
VIX Fear Factor
http://www.theforexnittygritty.com/forex-strategies/vix-fear-factor VIX Fear Factor By www.TheForexNittyGritty.com The so called VIX fear index is in the news as the volume of put contracts on the Chicago Board Options Exchange (CBOE) Volatility Index rose to a level of three puts on each call contract. The CBOE Volatility Index itself is a measure of market expectation of coming price movement of the S&P 500 over the coming 30 days. It uses a weighted measure of the prices of puts and calls in the S&P index as its base. The costs of buying puts and buying calls go up with expectation of market volatility and down when traders expect a more tranquil market. When the VIX fear index is high it is indicative of a volatile market. However, an extremely high VIX has often been seen before a market rally extending over a year. Thus the VIX fear factor is not always a fear factor and can be an indicator of better times for the stock market or Forex trading as the same principles apply to volatile currency trading as well as to stock volatility. Why Would Forex Traders Watch a Stock Options Index? Since 2006 it has been possible to trade options on the VIX itself. Options traders expecting to see the VIX fall are the ones buying puts on the so called fear index itself. Traders can trade the VIX directly but stock traders more commonly use the VIX fear index as a guide in helping predict market trends or a market correction. Traders using Candlestick analysis for technical analysis of stocks can use the so called VIX fear index as an adjunct to understanding and predicting changes in market sentiment. When the VIX fear index peaked recently, traders, expecting a fall from historic highs, bought puts on the index. Those trading the VIX fear index directly can use both fundamental and technical analysis. Those who simply use the so called VIX fear index as a guide will use the expectation of a decline in stock volatility into their calculations for future stock trading. The extreme stock price volatility and index volatility that the market has displayed recently seem to stem largely from concern about the potential economic effects of the European Union not solving its sovereign debt dilemma. Recent pronouncements by German and French leaders seem to have calmed the markets a little to which some credit to the likelihood of decreased market volatility. Considering how uncertain this situation still is traders will be well advised to keep up their Candlestick charts in order to accurately tap into market sentiment. As fundamentals are quickly discounted by the market traders use Japanese Candlestick charting to anticipate approaching price changes and buy stocks or sell stocks accordingly. Forex traders will watch the state of the US economy for clues as to how Forex trading will develop in coming days, weeks, and months. Technical Guides to Trading Forex Again it is useful for Forex traders to keep an eye on the economy and the VIX index which uses the S&P 500 as its guide. Remember when using the VIX as a guide that the so called VIX fear index does not differentiate between a high volume of puts on the S&P 500 index which indicates a potentially falling market and a high volume of calls which indicates a potentially rising market. Also remember that calls and puts on the VIX index itself have to do with expectations of higher or lower volatility, not a higher or lower stock market. No matter what the so called VIX fear factor seems to tell us, traders using Candlestick pattern formations as a guide know that market sentiment can always change and that with Candlestick signals as a guide they can profit in both up and down markets in both stock and foreign currency trading. http://youtu.be/delFKdM6JFM
Views: 192 ForexConspiracy
Run on French Banks
http://www.TheForexNittyGritty.com - Run on French Banks Could there be a run on French banks if credit agencies downgrade their debt ratings? A bank run is when many customers of a bank simultaneously wish to withdraw funds. They do this, commonly, because they believe that the bank might go into bankruptcy and that they, the customer, will lose money. If a sufficiently large number of customers decide to withdraw their money for fear of the bank becoming insolvent it can become a self-fulfilling prophecy. A possible run on French banks is of concern because the large deposits that many nations, including Germany and the US have in these banks. It was the run on many US banks in the early 1930's that helped create the Great Depression. The prospect of a Greek debt default is especially worrisome for French banks as they hold substantial amounts of Greek debt. As with other bank runs it is the prospect of losing money that drives depositors to withdraw funds. There are a number of ways that banks attempt to prevent a run. An old and often successful procedure is to close the bank temporarily. Such a "bank holiday" stems the flow of capital out of the bank while other measures are instituted to protect the bank. Deposit insurance helps protect depositors but the amounts of deposit insurance are useful for individuals and not for nations. The interconnectedness of banks and other financial institutions is such that damage from a run on French banks and subsequent collapse could spread to North America and Asia. It is a measure of how seriously investors take this situation that when news of a possible resolution to the European debt dilemma emerged this last week stocks soared in the US and worldwide. Varying foreign currency rates have been a hallmark of this situation. Nations throughout the world have been trying to get a hand on the degree to which their banks are exposed to this situation. The US Federal Reserve announced that it is analyzing the books of the six largest US financial institutions for European, especially French, debt. It is pertinent that Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, JPMorgan Chase, and Wells Fargo have deposits equal to two thirds of the US GDP which comes to a little under $10 Trillion USD. The concern of the Fed is the currency swaps in which these folks have engaged. In a currency swap two parties exchange currencies or interest payments on currencies on a fixed future date. These are Forex transactions. Speculators use these in search of profits. Central banks may use these to keep currencies stable. The concern of the Fed is that US banks may have excessive exposure to the Euro and the risk of a Euro collapse if the European debt dilemma becomes unsolvable. This combination of Forex and sovereign debt has plagued the markets for over a year and may, indeed, produce a run on French banks. As credit agencies such as Moody's appraise the situation Forex traders are wary of movement of the Euro and the US Federal Reserve is pumping dollars into Europe in order to forestall a global financial disaster.
Views: 501 ForexConspiracy
Russian Capital Flight
http://www.forexconspiracyreport.com/russian-capital-flight/ Russian Capital Flight By www.ForexConspiracyReport.com The Russian ruble lost about half its value against the U.S. dollar starting at the beginning of 2014. The precipitous drop in the price of oil and sanctions placed on Russia by the EU and USA because their annexation of Crimea and support of a secessionist civil war in Eastern Ukraine have further damaged the currency. However, a French economist blames the weakness of the Ruble on income inequality and capital flight. Bloomberg Business reports the story. Count Russian reserves as another casualty of income inequality that Thomas Piketty believes is reshaping the world’s biggest economies. Russia, which is struggling to rebuild holdings depleted during last year’s currency crisis, has missed out on building a bigger stockpile in the past 15 years by failing to create a more transparent financial system to ease inequality and distribute the spoils of a boom in commodities prices, said Piketty, the author of the bestselling “Capital in the 21st Century.” Jailing “a couple of billionaires from time to time” is no way to address the challenge, the French economist said in an interview in Moscow on Thursday. “In the long term, Russia should have much more reserves, given the level of its trade surplus,” he said. “It’s important to realize that Russia is being stolen money from, by capital flight and by the fact that billionaires and millionaires outside Russia and sometimes inside Russia are able to benefit from natural resources of Russia much more than they should.” According to the Global Wealth Report by Credit Suisse, the top ten percent of Russians control eighty-seven percent of household wealth. This is far higher than any other major economic power. The oligarchs are siphoning off the wealth of Russia and using it to buy villas on the Riviera and condos in London while the Ruble suffers. Foreign Direct Investment The Profitable Investing Tips website wrote about foreign direct investment. Money goes where there is the prospect of profit and that requires stability and a sound currency, both of which are currently lacking as Russia faces currency flight. If you are looking for offshore investment ideas, take a look at where foreign direct investment goes year after year after year. There have been changes afoot regarding where foreign direct investment is going. A very useful reference in this regard is the just published United Nations study, World Investment Report 2013. We have used 2007 and 2012 as bookend comparison years as 2007 was just before the onset of the worst recession in three quarters of a century and 2012 is the most recent year reported. Of note is that direct foreign investment has fallen in the large majority of nations but there are exceptions that should help guide investors with their fundamental analysis of where to put their money in the years ahead. First take a look at the data and then read about foreign direct investment. Russia is one of the nations that lost foreign investors between 2007 and 2012. That only got worse when Putin annexed Crimea and sent Russian troops into neighboring Ukraine. But, the basis of Russian capital flight is the large amount of wealth being siphoned off by a small percentage of Russians who then spend and invest outside of Russia where they believe economies and politics are more secure. China Too Rich Chinese are already taking what money they can and buying property or setting up businesses offshore. Investors expect a thirty percent devaluation of the Yuan in the coming months. Add Chinese capital flight to Russian capital flight and it adds investing capital in the West and it damages both China and Russia. “The downside scenario for China seems more intimidating than ever before,” billionaire Dan Loeb wrote on Oct. 30 to investors at Third Point, which manages $18 billion. “The new question is not whether but how severe the slowdown of the world’s foremost growth machine will be.” Russia is taking steps to keep capital in the country. It may be too late for China. https://youtu.be/4F0L0NR6cUY
Views: 186 ForexConspiracy
How Much Money Are Chinese Taking Out of the Country?
http://www.forexconspiracyreport.com/how-much-money-are-chinese-taking-out-of-the-country/ How Much Money Are Chinese Taking Out of the Country? By www.ForexConspiracyReport.com As China’s economy slows wealthy investors are moving money offshore. How much money are Chinese taking out of the country and why does it make a difference? Bloomberg writes about suitcases of cash leaving China with tourists. The explosive growth of spending overseas by Chinese tourists dwarfs the increase in the number of Chinese traveling abroad. The most likely reason? Disguised capital outflows. So says former U.S. Treasury official Brad Setser, who drilled into the spending data provided by some of the most popular destinations for Chinese travelers. The nation’s tourism deficit - a measure of foreign visitor expenditure in China minus what its citizens spend overseas - soared to $206 billion in the 12 months through June 30, up from $77 billion in 2013, the last year of the yuan’s one-way appreciation trajectory. More Chinese are traveling than a few years ago, up about 50%, and the amount of money that Chinese carried with or spent offshore tripled during the same time frame. It appears that wealthy Chinese are finding ways of getting their money out of China, out of Yuan and into foreign currencies or assets valued in foreign currencies. These folks are buying property abroad, buying life insurance policies payable in other currencies or simply opening bank accounts to hide money offshore. Why Should This Matter? There are two things that matter about Chinese taking money out of the country. The first is that smart investors who made their money during China’s growth phase are seeing the handwriting on the wall and getting out. This fact is probably more predictive than all of the stats that the Chinese government offers. The other thing is that the world could use more consumers to boost the global economy. The USA or Europe would be better off if wealthy Chinese bought their products than if these Chinese buy homes in London, New York or Chicago. Where Are the Chinese Economy and Yuan Going? How much money Chinese are taking out of the country is important as it is a predictor or their economy and their currency. The Telegraph talks about the $2 Trillion black hole in China’s economy. Bad debts in the Chinese banking system are ten times higher than officially admitted, and rescue costs could reach a third of GDP within two years if the authorities let the crisis fester, Fitch Ratings has warned. The agency said the rate of non-performing loans (NPLs) has reached between 15pc and 21pc and is rising fast as the country delays serious reform, relying instead on a fresh burst of credit to put off the day of reckoning. It would cost up to $2.1 trillion to clean up this toxic legacy even if the state acted today, and much of this would inevitably land in the lap of the government. China’s growth was largely credit driven but that was not a problem as expansion simply covered the debt. That is no longer the case. Debts are piling up, not getting paid and that economy is going to suffer. That is why there is so much money going out of China. https://youtu.be/Ja-ENb_PAR8
Views: 1296 ForexConspiracy
Swiss Franc Forex Conspiracy
http://www.forexconspiracyreport.com/swiss-franc-forex-conspiracy/ Swiss Franc Forex Conspiracy By www.ForexConspiracyReport.com The most dangerous Forex conspiracies are those hatched by central banks. The Swiss franc Forex conspiracy bankrupted many Forex traders and brokers. However, not all brokers suffered when the Swiss National Bank eliminated its cap on the Euro and the value of the franc instantaneously rose by nearly forty percent! Many are demanding payment from traders whose accounts were wiped out. And traders who were awake and trading when the news broke typically went long on the franc and short on the Euro and made money. But, if someone knew in advance of the Swiss National Bank decision they could have made a lot of money! Every Trade Has a Winner and a Loser The news is full of how traders and brokers lost money. There is little news about who made money in these trades. Certainly more than one person with the Swiss National Bank knew in advance. Did any of them enter currency trades that later became immensely profitable? Fallout from a Stronger Franc Many Swiss banks report their assets in francs but hold currency reserves in Euros, Dollars, Yen and British Pounds as well. Credit Suisse commented that it will not have lost much money from the change in value of the franc but that its profits may suffer this year. Many Swiss companies will be hurt by this decision as their products have immediately become thirty percent more expensive outside of Switzerland. An alternative is for these companies to cut prices and absorb their losses. The amount of damage spread out in this case suggests a Swiss franc Forex conspiracy which may or may not come to light. Why Would the Swiss National Bank Do This? The answer is that it was getting too expensive to prop up the Euro and keep pushing down the value of the franc. And it was going to get more difficult when the European Union starts printing money for a Quantitative Easing Stimulus program much like the US Federal Reserve used to rescue the US economy. In this sense it was not a Swiss franc Forex conspiracy so much as necessary shift in Swiss monetary policy. However, the damage done to Forex accounts across the world is the same. Forex conspiracy rates change minute by minute but rarely so dramatically in a major currency. The damage is done and perhaps traders will learn their lesson to stay at the terminal when trading Forex or to only buy Forex options in which loss is always limited and profit is always possible. Who Is Next? An interesting follow up to this story is the suspicion that the Chinese Yuan may follow the Swiss franc in ceasing to support foreign currencies and suppress itself. China has a bigger economy and dreams of internationalizing the yuan. If the Swiss bank move was a Swiss franc Forex conspiracy remains to be seen. However, considering the non-transparency of Chinese markets and actions a Chinese yuan Forex conspiracy in which insiders profit is certainly likely. http://youtu.be/P-FziIu5EMQ
Views: 320 ForexConspiracy
Why Is the Dollar Falling?
http://www.forexconspiracyreport.com/why-is-the-dollar-falling/ Why Is the Dollar Falling? By www.ForexConspiracyReport.com The Fed just raised rates and conventional wisdom says the dollar should be going up. But according to Business Insider the dollar is tumbling. Why is the dollar falling? The US dollar index is down by 0.6% at 99.82 as of 7:53 a.m. ET. This is the lowest level for the index since early February The euro, pound, Mexican peso, rupee and ruble have all gained at the expense of the USD. What happened and why is the dollar falling? Too Little, Too Late and Not Often Enough According to Reuters the problem with the dollar is that the Fed says the rate hike pace will be gradual. The dollar posted steep losses against major currencies on Wednesday after the Federal Reserve raised interest rates as expected but signaled a more gradual pace of monetary tightening this year than many in the market anticipated. The Forex market had already priced in a more substantial set of rate increases than what the Fed is signaling. That is part of why the dollar is falling. And signals from the US economy are not helpful. PoundSterlingLive.com comments as the US dollar falls against the Pound Sterling. There is more than the number of interest rate bumps in this picture. The Dollar had been seen falling ahead of the event on weaker-than-expected US retail sales data which outweighed the impact of a robust CPI figure. The Fed will only raise rates as the economy warrants and that includes retail sales figures which were disappointing. What Does the Future Hold for the Dollar? Any long term dollar rally will depend on a greatly stimulated economy. First of all it is the economy that drives the currency. And when the economy starts to hum it brings on inflation and the job of the Fed is to fight inflation, primarily by raising interest rates. The economy may do well with Trump’s proposed plans to reduce taxes, repatriate offshore corporate cash and spend on infrastructure. However, whenever a party controls both houses of congress and the White House they tend to bicker among themselves and that is what is happening right now with the attempted repeal and replacement of the Affordable Care Act. If the rest of Trump’s agenda plays out the same way don’t expect to see much economy growth and thus don’t expect to see a longer term dollar rally based on that growth. And If There Is a Trade War Trump’s talk of high tariffs on Chinese goods has cooled down but according to Bloomberg there is a 50% chance Trump will start a trade war with China. There is a 50 percent chance Donald Trump could start a trade war with China, raising investment risks across emerging markets this year, according to Loomis Sayles & Co. The threat of a trade spat between the world’s two biggest economies is “quite real” as the U.S. president pledges to protect American industry, said Lynda Schweitzer, vice president and portfolio manager at the investment firm that oversees $240 billion. While a clash isn’t a certainty, the chance has “got to be 50-50,” prompting the company to stay lukewarm toward emerging market debt investments, she said. These folks are concerned about taking on emerging market debt because a trade war between China and the USA would have global ramifications and a substantial Forex impact on any and all currencies. https://youtu.be/GfBChrCV2I4
Views: 243 ForexConspiracy
Forex Profits With the Kicker Signal
http://www.forexconspiracyreport.com/forex-profits-with-the-kicker-signal/ Forex Profits With the Kicker Signal The Kicker Signal is a Japanese candlestick technical analysis pattern. It is used in trading stocks, commodities, or currencies. One can gain substantial Forex profits with the Kicker Signal as it is perhaps the most powerful indicator or a substantial market reversal. The Kicker Signal can occur in up or down markets and when the market has been trading in a flat line. It is a two day signal that is often occasioned by dramatic market news. To gain Forex profits with the Kicker Signal it is necessary to learn trading Forex with candlesticks, the clear and easy to read signals that have been around for centuries. Technical Trading of Forex Pairs Forex trading can be confusing for the uninitiated. Prices go up and they go down. Pronouncements by the European Central Bank, US Federal Reserve, or Japanese Central Bank can lead to dramatic market shifts but the shifts are not always in the direction one might anticipate. In order to gain Forex profits with the Kicker Signal and other candlestick signals one needs to learn the signals and seek to recognize them on a Forex price chart. What is the Kicker Signal? The Kicker Signal is just two candlesticks. They are of roughly equal length. When the first is black indicating a down day in the market the second is white. Like the Morning Star in Forex trading it predicts an uptrend. When the first is white indicating an up day in the market the second is black. As the Evening Star predicts bear markets so does this aspect of the Kicker Signal. Although the candlesticks are one after the other on the Forex chart they give the appearance of being placed end to end. This is because the market opens at the same price to days in a row. However, the price of the traded currency rises or falls substantially on the first day, gaps back the next morning to erase the gains or losses of the first day and continues in the direction of the correction and closes so that it moves twice the distance of the first day. It is not important what the market has been doing prior to these two candlesticks. What commonly is happening here is that important news has hit the market and prices are responding. One can gain Forex profits with the Kicker Signal if one is aware of its meaning and ready to react. What Does the Kicker Signal Indicate? The powerful Kicker Signal tells us that the market is likely to keep going in the direction of the second candlestick of the pair. Gaining Forex profits with the Kicker Signal is more likely the sooner that the trader recognizes that the pattern is happening. This is typically when the second day gaps up or down and erases the gains or losses of the first day. A savvy candlestick trader will recognize the beginning of the signal and will be aware of the news that is shaking the market. He will use both his knowledge of a change in fundamentals and his insight into market sentiment to gain Forex profits with the Kicker Signal. A smart trader will not put all of his capital into the trade too early, however. If the currency gaps back the subsequent day it may be wise to exit any trades and reassess the news and market sentiment and foreign currency rates. http://youtu.be/bpsvvnh7UU4
Views: 346 ForexConspiracy
The Federal Reserve Buying Gold and Foreign Currency Affects the Forex Markets
http://www.theforexnittygritty.com - The Federal Reserve buying gold and foreign currency can affect the Forex market in a number of ways. The Federal Reserve and the central banks of many nations routinely intervene in the Forex market in order to maintain the strength of a given currency or in order to hold its price down. The Federal Reserve buying gold and foreign currency can affect the US dollar or affect any currency the Fed chooses to buy with dollars. The Fed will, for example, choose to intervene in the currency markets in order to reduce the relative value of the dollar compared to the currencies of its trading partners. By selling dollars and buying gold or Yen, Euros, Swiss francs, or any other currency the value of the dollar tends to be reduced across the board. By buying Yen the price of Yen tends to go up in relation to the dollar. The same is true with Canadian dollars, Australian dollars, British Pounds, and the rest. How to trade Forex successfully will include having an understanding of how the Federal Reserve buying gold and foreign currency can affect the currency pair that one is trading. The Federal Reserve buying gold and foreign currency can affect US exports, imports, and the US balance of payments. That is, in fact, why the Fed will choose to intervene in the Forex markets. The value of the US dollar in relation to other currencies is only important so far as it affects issues such as how effectively US companies can export their products and compete with foreign imports. The Asian exporters, Japan, Taiwan, and China, especially, have acted for years to raise the value of the US dollar and keep their currency values low in comparison. This has made their products cheaper, and thus more attractive to US buyers. It has given them a competitive advantage and contributed greatly to their success as exporters. The problem for the USA and the value of the dollar lies in the economic success of the USA and the relative stability of its currency, economy, politics, and national borders. The US dollar is a safe haven currency. In times of world wide turmoil and instability people buy dollars. This is a tribute to the high standing of the dollar and tends to keep the dollar artificially high. For the trader, as an example, how to invest in Euro is to buy the day before the US Fed decides to buy a few billion Euros with dollars. The Federal Reserve buying gold and foreign currency can affect the artificial elevation of the value of the US dollar. When a big player, like the Fed or a large central bank, dumps a large amount of its currency in the Forex market there are immediately more sellers than buyers of the currency and will be until the price of the currency comes down to where every last offered dollar is purchased. The affect is to reduce the value of the dollar and raise the value of each and every currency which the Fed buys. The same applies to gold. Gold goes up when the US replenishes its gold reserves. How to trade Forex in these situations is to keep up with the Forex news and any announcements by the Fed. It is to anticipate when the Fed is likely to intervene. Then the trader needs to be able to anticipate just how well the sale of dollars will work in reducing the value of the dollar and just how soon it will rebound and trade accordingly.
Views: 8392 ForexConspiracy
Forex and Stability on the Indian Subcontinent
http://www.forexconspiracyreport.com/forex-and-stability-on-the-indian-subcontinent/ Forex and Stability on the Indian Subcontinent Often times the factors that drive currency rates do not start with pronouncements by heads of central banks or the US Federal Reserve. Sometimes a peaceful meeting of heads of state of adversarial nations is a first step to prosperity. Thus we wonder about Forex and stability on the Indian subcontinent after a welcome meeting of the president of Pakistan with the Prime Minister of India. The first visit of the leaders of these two in seven years occurred recently in India. Asif Ali Zardari, president of Pakistan, came to India to visit a holy Muslim shrine. Along the way he met for half an hour with India's Prime Minister, Manmohan Singh. These leaders met after months if not years of behind the scenes talks aimed at normalizing relations between their nations. The sad fact is that these two nations have engaged in three wars and have been at the brink of a nuclear war during the decades since they were created from the breakup of Colonial India. As events move toward more normalized relations finance, trade, Forex and stability on the Indian subcontinent hold great promise. The World's Most Populous Democracy India is the world's most populous democracy with 1.2 Billion people. It has the world's tenth largest economy but, if measured in purchasing power parity it ranks number 3 due to its lower cost of living than the economies of Europe and North America. With nearly 180,000 million people, Pakistan has the sixth largest population in the world. These two nations' populations combined exceed that of China. As trade groups visit between the two nations and talks for normalizing relations continue there is the chance that this could become the most populous single economic zone in the world. Forex and stability on the Indian subcontinent are intertwined as the Indian rupee and the Pakistani rupee are can be expected to increase in value as trade prospers and tensions settle down. Economic Growth Machine of South Asia Prior to the Pakistani president's visit to India the Pakistani government granted "most favored nation" status to trade with India. This helps Forex and stability on the Indian subcontinent and is a great improvement over threats of nuclear war! Both nations have promised not to let the issues of rights to Kashmir, terrorism, and more get in the way of a steadily improving relationship. Unlike Japan, China, North America, and Europe, both India and Pakistan have young and increasing labor pools. Education and skill levels in trades and engineering are steadily improving and a growing middle class in both nations is helping grow the consumer market. India is well known in the West for its call centers and tech support. Its history as a British colony has left it with ample English skills and strongly democratic political institutions. These factors and an increasingly free market economy are expected to bring India to an economy with purchasing power parity equal to the USA by the middle of the 21st century. Pakistan has seen impressive industrial and technical growth. Its agricultural sector has shrunk as a percentage of its economy but Pakistan still produces more wheat that all of Africa combined and nearly as much as all of South America combined in a given year. India is considered one of the next economic super powers along with Brazil, Russia, South Africa, and China. Pakistan is considered one of the "next 11" with an economy that is expected to grow in par with India so long as regional differences do not reemerge as impediments. Traders will be wise to keep track of Forex and stability on the Indian subcontinent as relations between India and Pakistan move forward. http://youtu.be/V6ZMvlG1wss
Views: 673 ForexConspiracy
Post Euro Settlement System
http://www.ForexConspiracyReport.com - Post Euro Settlement System If the Euro Zone breaks up will there be a post Euro settlement system for Forex transactions? The possibility of southern tier nations pulling out of the European Union brings up the issue of Forex settlements on individual national currencies. If Greece pulls out it will likely use the drachma again as its currency. Italy would use the lira, Portugal the escudo, and Spain the Peseta. How would this affect a post Euro settlement system for those wishing to trade these nation's currencies? Nearly three fourths of currency trades in major currencies use CLS Bank International to contain counterparty risk. Although trading a new currency in Forex is said not be especially complicated the business of insuring that transactions are processed and payments made can be more complex. Thus banks that engage in currency trading and institutions such as CLS Bank International are said to be making contingency plans for breakup of the EU and for one or more new currencies in the Forex market. Although a nation can decide to print its own post-Euro currency again, the devil is in the details. For example, at the heart of the EU debt crisis is the ability of Greece, Italy, and others to pay their national debts. Bonds issued by these nations may be denominated in Euros but may contain wording that allows the nation to pay with its own currency if it pulls out of the EU. This could be a fast and easy solution for any or the entire PIIGS group if they were to greatly devalue their new currency in regard to the bonds that carry their national debt. For the Forex trader a post Euro settlement system would function much like what is currently in use. However, a lot of preparation may be required in order to streamline the so called back office processing of counterparty risk issues. For a Forex trader interested in trading any new currencies that may evolve from the European debt crisis, a streamlined post Euro settlement system could be only one of many issues. When a new currency comes into being it is as a declared value but, in fact, the market quickly decides the currency value related to the Euro, USD, and other major currencies. The same basic factors that determine the value of the dollar, Euro, or Swiss franc come into play. What is a nation's balance of payments? Does it have cash reserves? What is the employment picture? How great a debt does it have? Many traders may choose to ignore any risks inherent in a post Euro settlement system in order to trade any new currencies that might arise. The market inefficiency that typically follows great changes in fundamentals provides opportunity for profit for currency traders. Traders may choose to trade options on any new currencies in order to contain their risk. Those selling Forex options contracts involving any new southern tier European currencies may well choose to price their offering very high due the risk involved. The entire issue of a post Euro settlement system may well play out in the days ahead if the EU is unable to contain the crisis. For more insights and useful information regarding the Forex markets and foreign currency trading, visit www.ForexConspiracyReport.com.
Views: 281 ForexConspiracy
Foreign Exchange Trading
http://www.theforexnittygritty.com/ - Foreign Exchange Trading Daily foreign exchange trading volume has more than tripled in the last decade to roughly $4 Trillion US. Much of the increase comes from speculators in currency markets, especially individuals taking advantage of online Forex trading. Online foreign exchange trading allows traders to buy and sell foreign currencies virtually around the clock on all business days. The major currency markets are London, New York, and Tokyo. How to trade Forex starts with opening a trading account and obtaining software compatible with that of a broker. Then any person with sufficient capital can engage in foreign exchange trading. The US dollar is part of over 80% of trades and the vast majority of all trades are between the major currencies which are as follows: United States Dollar -- USD Euro -- EUR British Pound -- GBP Japanese Yen -- JPY Swiss franc -- CHF Canadian Dollar -- CAD Australian Dollar -- AUD Foreign exchange trading can be lucrative and foreign exchange trading can be financially disastrous. Would be traders need to learn the fundamentals that drive Forex markets and develop Forex technical strategies that lead to profits. Like all business endeavors there is a high rate of failure in the early months and years. The problem for the beginning trader is that he is always trading against professionals with years of experience and substantial research experience. As hedge funds and other new investors enter into foreign exchange trading they bring with them or hire professionals who map market trends and develop increasingly sophisticated computer programs to anticipate market movement and execute split second trades. The backbone of foreign currency trading is comprised of the international companies and banks that exchange currencies as part of their business. These companies often engage in options trading in order to hedge currency risk and have decades of experience in reading the Forex markets. Professional Forex trading operations typically have a host of professionals at every level of trading, strategic development, and IT in order to develop and execute successfully. While the beginning Forex investor is simply wondering how to trade currency an institutional trader will be using complicated algorithms to profit from the volatility of the Euro in the face of an ever growing debt crisis. Traders will develop dozens of trading models and then test and compare with historic trading data. The beginning investor can do the same but does not have the "horse power" to keep up with the large operations. The flip side is that an individual trader does not need to enter into every possible trade. He does not need a steady income stream to pay the salaries or dozens of support personnel. An individual trader has the option to follow the currency pair or pairs of his choice and execute the occasional, hopefully profitable, trade based upon clear and compelling data and reasoning. A common means of limiting investment risk and also leveraging investment capital is to buy options in foreign exchange trading. A trader buys puts in order to profit from a down turn in a currency he owns and calls to profit from an upturn in a currency he wishes to buy. His investment risk is limited to the premium paid and he has the potential for a multiple return on investment.
Views: 1164 ForexConspiracy
Emerging Market Carry Trade Weakens USD
http://www.theforexnittygritty.com/forex/emerging-market-carry-trade-weakens-usd Emerging Market Carry Trade Weakens USD Currency speculators are starting to bet against the USD in the coming months. An emerging market carry trade weakens the USD but other factors are at fault. First of all, for many, the USD is no longer a safe haven currency. Although the political game playing that brought the USA to the brink of default on its debts is temporarily quiet many are concerned that this is just the lull before the next storm. To the extent that political gamesmanship drives the USD fundamental analysis of Forex pairs is difficult to impossible when half of the trade is the USD. As money moves to other currencies it drives the value of the USD down. And, many emerging markets are raising interest rates in order to attract capital. Traders move capital out of low interest rate markets into high interest rate ones. This amounts to a carry trade and an emerging market carry trade weakens the USD. US interest rates will stay down until the economy starts to mend more thoroughly and the Fed cuts back on its quantitative easing program which in turn holds interest rates down. The Long Term Every trader has one eye on the US Fed to see when they reduce the $85 Billion a month stimulus program as doing so will drive up US Treasury interest rates and the value of the US dollar. However, the recurring issue of possible sovereign debt default is a serious one for the USA. It could end up like the story of the boy who cries wolf too many times. Eventually people will start ignoring the USA and banking their reserves in other currencies. When no one shows up to purchase US debt the rates will go up unless the country learns to live within its means. The long term issue is still the huge US debt burden. Although currency traders today are focusing on higher interest rates in offshore economies the longer term focus may be away from the USD. While an emerging market carry trade weakens the USD today not dealing with the debt burden and short sighted politics is likely to damage the USD more severely in the long term. If that is the case those USD assets that are converted to reales, colones, various pesos, rubles, yuan, rand, and rupees may never come back. Trading Today As An Emerging Market Carry Trade Weakens the USD The countries where this tactic will work will be those whose currencies suffered most in midsummer sell-offs. These include the Indian rupee, the Indonesian rupiah, the South African rand, the Brazilian real, and the Turkish lira. As always timing is important and factors can change. Keep an eye on China as their debt structure is still suspect and their exports are falling as Europe and North America are not coming back on line as the patrons of cheap products from China that they once were. And when the Fed acts to ease quantitative easing and increased bond yield drive the dollar higher the short term situation will change. As always do your own homework and do not be afraid to sit out a trade that you do not understand. http://youtu.be/H3jPX23MNn0
Views: 184 ForexConspiracy
US Dollar Deflation
http://www.ForexConspiracyReport.com - US Dollar Deflation The recent good news-bad news about the housing market also has to do with US dollar deflation and Forex markets. The good news for the economy in general is that there are more housing starts in the USA. The good news for home buyers is that when the price of new and existing homes falls it makes it easier for new buyers to enter the housing market. The bad news is that the same process brings down the value of existing homes. Home values have already taken a real beating over the last few years. Thus a further decline is home values will further reduce the asset and credit base of American families. This could, in theory, lead to a deflationary spiral. US dollar deflation would also raise the value of the dollar versus other currencies. Since the housing bubble burst in 2006 the average loss in home value across the USA has been a third. Because many new homes are unsold and because there are many mortgage foreclosure homes on the market there is a downward pressure on home prices. Economists contend that the housing market is still correcting from the bubble of the early 2000's. Although the decline in housing values is general there are a few exceptions such as Phoenix where, it would appear, folks who still have money are moving. Economists are typically not concerned about a slow rate of inflation but even a slow rate of US dollar deflation gets them to worry. The concern is that the decreased wealth effect associated with low housing values results in decreased spending which in turn results in less production, fewer jobs, and a further decrease in wealth. While this can be a disaster for US citizens it can be very profitable for those who have US dollars and, especially, those who trade Forex. A stronger US dollar increases buying power abroad. It was in the 1980's when the US dollar was strong that many US companies bought large stakes in foreign competitors. US dollar deflation increases the real value of the US dollar over time. This is great if you have US dollars and want to buy assets in the US or elsewhere. It is a problem if you are a US manufacturer who wants to compete in foreign markets. It is especially a problem if you are a US worker who is priced out of a job because it is cheaper to hire someone overseas and pay them in a foreign currency. US dollar deflation comes from there being less available money. Less available money comes from less savings, tighter credit, lower wages, and excessive debt. This last issue may be central to both the US and Europe. The two largest economies in the world are both heavily in debt and both have tight credit as a response to the worse economic downturn in three quarters of a century. The problem can be alleviated in the short run by increasing credit and providing economic stimulus, essentially by printing money. However, these approaches drive up debt and can lead back to the same fix we are in and US dollar deflation, at least in the US housing market. For more useful information and tips regarding foreign currency trading visit www.ForexConspiracyReport.com.
Views: 1094 ForexConspiracy
Chinese Fake Imports in Order to Export Money
http://www.forexconspiracyreport.com/chinese-fake-imports-in-order-to-export-money/ Chinese Fake Imports in Order to Export Money By www.ForexConspiracyReport.com The plight of the Yuan continues. On one hand China is supposedly stabilizing even though imports and exports are falling. On the other hand we see that wealthy Chinese fake imports in order to export money to Hong Kong from when it can go anywhere. Bloomberg Business writes about fake Chinese imports from Hong Kong. China’s problem with fake trade invoices appears to be getting worse. Imports from Hong Kong surged a record 204 percent last month, data on Sunday showed, intensifying the spotlight on a channel used to get capital out of the country. While the value at $2.1 billion is relatively small, the suspected use of phantom goods to secure hard currency shows concern persisting among Chinese savers and companies that the yuan will weaken. “As long as there is an expectation of yuan depreciation against the dollar, there will be a massive outflow of funds,” said Iris Pang, Hong Kong-based senior economist for greater China at Natixis Asia Ltd. “As long as channels under the capital account are still semi-closed, trade will remain a shadow channel for fund outflows.” The point is that those in the know, and with the wherewithal, believe that the Yuan will continue to fall and that the glory days of the Chinese economy are over. Forex traders should pay attention when trading the Yuan versus other currencies, especially the US dollar. Yuan Edging Lower As trade decreases so does the Chinese Yuan. The Daily Mail reports that the Yuan edges lower due to disappointing trade data. The yuan eased against the dollar on Monday, dampened by bearish market sentiment after China reported its exports and imports fell more than expected in April, adding to concerns about the health of the world's second-largest economy. The People's Bank of China set the midpoint rate at 6.5105 per dollar prior to market open, 0.15 percent firmer than the previous fix 6.5202. Spot yuan opened at 6.4960 per dollar and then fluctuated widely as traders rushed to adjust their positions after a flurry of worse-than-expected domestic economic data over the weekend. From 2011 to early 2014 the Yuan strengthened steadily against the dollar. But since that time the Yuan has weakened, especially when the U.S. Federal Reserve announced that they would be raising interest rates and eventually did so. Today the Yuan trade at around 6.5 to the dollar which is where it was five years ago. The difference is that today Chinese exports and imports are shrinking and smart money is fleeing the country, driving down the Yuan in the process. The use of Chinese fake imports in order to export money is a signal that Forex traders should not ignore. Where Is the Money Going? So long as the dollar was on the rise the logical place for wealthy Chinese to put their expatriated Yuan was in dollars or real estate denominated in dollars. Now, as the Fed holds off on more interest rate increases where will that money go and how will it affect Forex rates? The Australian Financial Review looks at how wealthy Chinese move money offshore where they invest in property. As the Chinese economy stumbles, wealthy families are increasingly trying to move large sums of money out of the country, worried that the value of the currency will fall and their savings will be worth less. To get around the country's cash controls, individuals are asking friends or family members to carry or transfer out $US50,000 apiece ($70,000), the annual legal limit in China. A group of 100 people can move $7 million overseas. The practice is called Smurfing, named after the blue, mushroom-dwelling cartoon characters, and it is part of an exodus of capital that is casting doubt on China's economic prospects and shaking global markets. Over the last year, companies and individuals have moved nearly $US1 trillion from China. Some of the methods used by Chinese to deal with the weakening Yuan are legal and make sense. For example, Chinese can buy businesses or property offshore and they can pay off debt denominated in dollars before the Yuan falls even more. The end results of all these efforts is the persistent weakening of the Yuan. https://youtu.be/YqhX8uPKig4
Views: 401 ForexConspiracy
What Is the Value of a Swiss Franc in Dollars?
http://www.theforexnittygritty.com - What is the value of a Swiss franc in US dollars? To find out what is the value of a Swiss franc in US dollars one only needs to go online and visit any of the free currency converters. As of this writing 1.00 CHF is equal to 1.03794 USD, that is to say that one Swiss franc is worth just under a dollar and four cents. In Forex trading the pair is referred to as the CHF/USD pair and is quoted as 96 cents to a Swiss franc. For the Forex trader the current exchange rate is not the issue. The future exchange rate is. What is the value of a Swiss franc in US dollars going to be next week, month, year, and decade? A decade, or even a year away, sounds extreme for the currency trader speculating in the foreign exchange market. Traders in Forex can be in and out of trades in minutes and even seconds. Day traders virtually always close their positions before the end of trading hours in their market. The issue is different for companies doing business internationally. Understanding the Forex markets requires an understanding of currency risk hedging by companies doing business internationally. A ship building contract or a contract for jumbo jets may be agreed upon and prices set in US dollars, Euros, Yen, Yuan or any other currency. The problem for a buyer of a ship from a builder in China or a jet from Boeing in the USA is that exchange rates change over time. The buyer may need to convert his currency to Yuan, Yen, US dollars, or Euros in order to pay the bill. If his currency falls in value he will need to pay more, in his currency, than he hoped in order to come up with enough to pay the bill. If it is the seller who needs to convert a foreign currency a fall in the value of payment currency will likewise hurt him. This is why companies doing business across borders and across currencies resort to Forex options in order to guarantee an exchange rate and eliminate currency risk in their businesses. What is the value of a Swiss franc in US dollars, or any other currency, is pertinent when the Swiss franc is half of a currency pair involved in foreign trade. Because of its stability how to trade Forex in Swiss francs tends to be to side with the franc as the likely currency to rise, but not always. The Swiss franc is a very stable and strong currency. As an example, it took over four francs to buy a dollar up until 1970 and by 2000 it only took 1.6 francs. Today the currency trades one to one with the dollar. What is the value of a Swiss franc in US dollars going to be tomorrow? Periodic recoveries of the dollar have driven the Swiss franc briefly downward. However, if the mountain of debt that the US is taking on to bail out financial institutions and stimulate the economy is any guide we may see the franc leave the dollar it is wake. What is the value of a Swiss franc in US dollars going to be in a few years may not be of direct interest to the daily currency trader but it is of vital interest to companies with multiyear contracts for international goods and services where one of the two currencies involved is the Swiss franc. Companies in Switzerland that come immediately to mind are Nestle, Roche pharmaceuticals, Ciba-Geigy, and Credit Suisse. Forex technical strategies will always apply to trading all currencies, including the Swiss franc. The fact of the matter is, however, that the Swiss studiously guard the value of the currency with sound fiscal discipline. Thus, the long term route of the franc is most likely upwards. http://www.youtube.com/watch?v=hc3y0mYs6ac
Views: 2943 ForexConspiracy
What is a Trillion Dollars in Yuan?
http://www.forexconspiracyreport.com/what-is-a-trillion-dollars-in-yuan/ What is a Trillion Dollars in Yuan? By www.ForexConspiracyReport.com According to the Investor’s Business Daily Chinese capital outflows reached $1 trillion last year. Which brings to mind what is a trillion dollars in Yuan? As exchange rates vary this number may go up or down but the current exchange rate is 6.5 Yuan to the US dollar so six and half trillion Yuan were converted to foreign currencies and fled China in 2015. China’s capital outflows jumped in December, with the estimated 2015 total reaching $1 trillion, underscoring the scale of the battle facing policymakers trying to hold up the yuan amid slower economic growth and slumping stocks. The entire year’s estimated trillion-dollar total was more than seven times 2014’s $134.3 billion, a record for Bloomberg Intelligence data dating back to 2006. In addition to capital exiting the economy, exporters are holding funds in dollars instead of converting them to yuan, said Tom Orlik, Bloomberg’s chief Asia economist in Beijing. “The immediate trigger for a pickup in capital outflows toward the end of the year was the People’s Bank of China’s poor communication over its shift in currency policy,” said Mark Williams, chief Asia economist for Capital Economics Ltd. in London, who previously worked on China issues at the U.K. Treasury. “Outflows are likely to remain strong because the People’s Bank still has not been able to generate confidence among investors that it knows what it’s doing or that it’s able to achieve its policy objectives.” As rich Chinese move their wealth offshore they sell Yuan and buy dollars, yen, euros or other currencies. And the Yuan goes down in value. A Year of USD/RNB Bloomberg Business has a graph that shows the last 12 months of USD/CNY exchange rates. A year ago a dollar got you 6.2 to 6.25 Yuan and as recently as a month ago the exchange rate was 6.59 Yuan to the dollar. It turns out that five years ago the exchange rate was about 6.5 Yuan to the dollar and the Yuan steadily fell to bottom out at 6.04 to the dollar at the end of 2013 as the USD rallied against all other currencies. Why Is Wealth Leaving China? The Wall Street Journal discusses China’s capital outflow quandary. As China’s foreign exchange hoard drops by hundred-billion-dollar chunks, a key question for economists and investors is what China’s bottom line is and what Beijing can do to defend it. China’s net foreign-exchange reserves have fallen by over $600 billion from their mid-2014 peak of $3.99 trillion as Beijing intervenes to prop up its weakening currency. China’s capital outflow was as much as $1 trillion last year by some estimates if trade surpluses and inbound investment flows are included. Some put Beijing’s red line at $3 trillion, which may not be far off if reserves fall another $200 billion by early March, as some forecast. China’s January figures are due out on Sunday. Trying to assess what Beijing is thinking takes on added importance as China’s problems batter global markets, commodity producers and confidence. China’s central bank and foreign exchange watchdog didn’t immediately respond to questions. Whether Beijing can stem the outflow soon is an open question. Economists say Beijing is working particularly hard to keep ordinary households from losing confidence in the yuan. The problem for China is that a falling Yuan is a self-fulfilling prophecy. Wealthy Chinese take money out of the country because they fear that the currency will devalue as the economy weakens and by their actions cause both a weaker currency and a cheaper Yuan. https://youtu.be/SHysuz_cI0I
Views: 300 ForexConspiracy
Will the Falling Mexican Peso Damage Mexico’s Economy?
http://www.forexconspiracyreport.com/will-the-falling-mexican-peso-damage-mexico%E2%80%99s-economy/ Will the Falling Mexican Peso Damage Mexico’s Economy? By www.ForexConspiracyReport.com The worst performing currency in the world right now is the Mexican peso. Will the falling Mexican peso damage Mexico’s economy or help it by raising exports? As its currency falls Mexico is taking measures to stabilize the peso. Bloomberg Business reports on comments by Mexico’s finance minister. Mexican Finance Minister Luis Videgaray told investors to expect the unexpected after this week’s unprecedented steps to save the peso from the world’s worst rout. Surprise moves such as the ability to sell dollars in the spot market with no advance notice and raise interest rates whenever needed are a key element to counter speculators who pushed the peso to a record low this month, Videgaray said in an interview Friday. Stemming declines in the currency is key to keeping inflation expectations under control, protecting Mexico’s consumers and preserving economic growth, he said. "We have reserves and a full set of tools on the monetary and currency side to intervene if necessary,” he said. “And that’s an important message we wanted to convey to the market. And it seems the market has listened." To a degree the Mexican peso has come to be used as a hedge for the risk of all the world’s developing economies. That is because the currency is perhaps the most liquid and tradable of all developing markets. The strategy taken by Mexican regulators is to make the currency less appealing to currency speculators as Mexico could intervene at any point and ruin a short term trade. The Mexican Economy According to the CIA World Factbook Mexico has $2.2 Trillion economy and is the third largest source of imports into the USA and second largest market for US goods. Mexico's $2.2 trillion economy has become increasingly oriented toward manufacturing in the 22 years since the North American Free Trade Agreement (NAFTA) entered into force. Per capita income is roughly one-third that of the US; income distribution remains highly unequal. Mexico has become the United States' second-largest export market and third-largest source of imports. In 2014, two-way trade in goods and services exceeded $590 billion. Mexico has free trade agreements with 46 countries, putting more than 90% of trade under free trade agreements. In 2012, Mexico formally joined the Trans-Pacific Partnership negotiations and formed the Pacific Alliance with Peru, Colombia and Chile. The currency government has made substantial strides in improving competitiveness and economic growth across the entire economy. However growth as stagnated along with the slowing of the world economy and Mexico is still plagued by corruption and the weak rule of law. A weaker peso, however, will make Mexican products more competitive in world markets and help offset the threat posed by an ever-weakening Chinese Yuan. Trading the Mexican Peso High volume rapid trading of the Mexican peso just became more difficult as Mexican authorities changed their approach to supporting the peso. However, the same fundamentals apply to trading the peso as to all currencies. As the economy strengthens and interest rates rise so does the currency. To the extent that competitive lowering of currencies results in a trade war, Mexico may be better positioned. As such traders may expect that Mexico will not rush to raise interest rates in the short or medium term. https://youtu.be/TRkv7NqlYqY
Views: 1787 ForexConspiracy
Trading the AUD
http://www.theforexnittygritty.com/ - Trading the AUD - Forex traders trading the AUD do well to keep their eye on the commodities markets, specifically coal, iron ore, copper, gold, natural gas, wheat, cattle and uranium. Australia is a large island nation (sixth largest in the world) with a relatively small population (22 million being number 55 in the world. It is blessed with abundant natural resources and proximity to the growing industrial powers of Asia. Thus Australia only suffered one quarter of negative growth during the current worldwide recession and has seen its currency, the Australian dollar -- AUD -- go up from 1.3285 to the USD in 2006 to 1.0902 to the USD in 2010 (CIA Factbook). How to trade currency such as the AUD always has to do with understanding the fundamentals that drive currency rates. Trading the AUD also has to do with reading market sentiment as the actions of many traders and businesses hedging currency risk come together to create a market price. The proximity of China, Japan, and Korea, especially, to Australia and its natural resources provides the Australian economy with advantages that can result in the ascent of the AUD. This ascent may not be only versus the USD, EURO, and YEN but against the Chinese Yuan. The perception of continued growth lends itself to profits for those who understand day by day market sentiment in trading the AUD. Trading the AUD can be similar to trading the Real - BRL, Rupee - INR, Yuan - CNY, or Ruble - RUB. Brazil, India, China, and Russia all have growing economies. These nations also have economies that are substantially smaller than that of the USA or the EU. This situation gives these nations substantial room to grow and prosper. In trading the AUD it is not important that there are a lot more US dollars or Euros than Australian dollars in the world. The only important factor for those trading the AUD is the relative value of a currently falling EURO versus a rising Australian dollar or the recent strengthening of the USD dollar against the Australian dollar. Although the AUD is commonly quoted against the USD it can be traded against any major currency, including the Yen, Euro, Swiss franc - CHF, British Pound - GBP, or Canadian Dollar - CAD. Trading the AUD against another generally rising currency such as the Real, Rupee, or Yuan will typically not be as profitable as trading the AUD against a currency that is in trouble, such as is the case with the EURO today. A Forex trader considering how to short the EUR may, at times, do better shorting the Euro against the AUD than against the USD. A long term consideration in trading the AUD is that Australia is a net exporter of both raw commodities such as coal and wheat as well as an exporter of finished products such as steel and processed meats. As Asia leads the world out of the recession Australia is ideally situated to do business with and China, Japan, and Korea as well as other prosperous Asian nations like Singapore and Taiwan or the most populous Islamic nation in the world, Indonesia. As always we are not suggesting that traders buy or sell AUD but offer an example of thinking through the fundamentals of a major world currency. Trading the AUD can be profitable but a successful Forex trading system requires thoughtful preparation, discipline, and timing.
Views: 293 ForexConspiracy
Buy the British Pound
http://www.theforexnittygritty.com/forex/buy-the-british-pound Buy the British Pound By www.TheForexNittyGritty.com It seems to be time to buy the British pound as the Bank of England contemplates raising interest rates. This is because the economic recovery is moving along in Britain. As noted in Investing.com, the British pound is trading at five year highs against the dollar. The pound was trading close to its highest level in almost five years against the dollar on Wednesday, amid heightened expectations for a U.K. interest rate hike in the early part of next year. GBP/USD pair is trading near 1.70. This is the best that the pound sterling has done against the greenback since the early fall of 2009. Traders are looking at a support to resistance range of 1.69 to 1.70. This good news for the GBP comes after a promising purchasing manager index as evidence of a continuing recovery. Further Evidence of British Recovery According to Reuters, the British purchasing manager's index is up and surging output boosts manufacturing numbers: Surging output and an influx of orders helped British manufacturing activity grow last month at a much faster rate than expected, a survey showed on Thursday, boding well for Britain's swift economic recovery. The Markit/CIPS UK Manufacturing Purchasing Managers' Index (PMI) rose in April to 57.3, its highest reading since November, compared to a March reading of 55.8 that was revised up from 55.3. As we have often noted on these pages, a major factor in the value of currency is the strength of the nation's economy. As increased factory orders lead to higher production the GBP is likely to go up as well. The intermediate factor here is that the Bank of England is likely to raise interest rates within a year which has a direct bearing on the value of the British pound versus other currencies. Trading the GBP If you are going to buy the British pound you need to buy it with something. The handiest currency to use in this regard is the US dollar, the USD. However, if you want to make a profit you need to think of a currency that is likely to suffer in the coming year and buy the British pound with that. The XE web site is a good source of information about British pound rates: The British Pound is the currency of United Kingdom. Our currency rankings show that the most popular United Kingdom Pound exchange rate is the EUR to GBP rate. The currency code for Pounds is GBP, and the currency symbol is £. Although the most popular quoted rate may be the USD/EURO that may not be the most profitable pair to trade. The Euro zone as a whole is getting better as well and one can expect the Euro to do reasonably well in the coming year. About a year ago we wrote about trading BRICS currencies. The BRICS nations are Brazil, Russia, India, China and South Africa. These nations were leading the charge out of a global recession but their economies have cooled off. Russia is especially having problems after annexing part of a neighboring country and China has still not convinced folks that its real estate bubble will not rapidly burst. Any of these currencies may be a better bet for profits than the USD or EUR if you want to buy GBP. That assumes, of course that you plow your profits back into one of these currencies and that their economies subsequently recover. As always do your own homework and sit out any trades that you do not fully understand. http://youtu.be/Z4Dio3avqsg
Views: 678 ForexConspiracy
What Caused Venezuela’s Currency to Fall So Far?
http://www.forexconspiracyreport.com/what-caused-venezuela%e2%80%99s-currency-to-fall-so-far/ What Caused Venezuela’s Currency to Fall So Far? By www.ForexConspiracyReport.com The official exchange rate of Venezuela’s Bolivar to the US dollar is 10.1075 to 1 but this is misleading. The real rate at which anyone will buy the Bolivar with the dollar is on the black market and there it takes 5,100 to purchase one greenback. Once upon a time the Bolivar was on par with the US dollar. What caused Venezuela’s currency to fall so far? The Historic Slide of the Bolivar The Bolivar has been Venezuela’s currency since 1879. It was fixed to the US dollar in 1934 at 3.914 bolivares to one dollar. That exchange rate was corrected downward over the years but the Bolivar was generally considered to be the most stable and internationally accepted currency in Latin America until Black Friday in 1983. By 2003 exchange controls were instituted and it took 1600 to buy a US dollar. Much is made of the current situation and of mismanagement and corruption by the Chavez and then Maduro regimes but part of the fall of the bolivar began long before Hugo Chavez took power. Nevertheless how is the bolivar doing today? Free Fall The fact of the matter is that there was some degree of control of the bolivar until the last few years but not anymore. Bloomberg Markets writes about Venezuela’s 99.5% currency plunge. President Nicolas Maduro has overseen an unprecedented depreciation in his country’s currency since taking office, with the bolivar now down 99.5 percent to 5,100 per dollar in the black market that everyday Venezuelans use. The sharp decline has wiped out savings and made buying imported goods all but impossible, helping fuel the anger directed at the government in street protests that have turned deadly in recent weeks. While Maduro has raised the minimum wage almost 20 times during his tenure, it’s still the equivalent of just $40 a month. The most recent cause of the fall of the bolivar is the fall in the price of oil. Venezuela has the world’s largest proven oil reserves and is an oil exporter. When oil prices fall, so does the bolivar. However Russia is an oil and gas exporter and so is Colombia, the country next door to Venezuela. Colombia’s peso is about 40% weaker than when oil was at its peak and Russia’s ruble is down about 50% and remember that Russia is dealing with sanctions levied by the EU and USA because of its annexation of Crimea and meddling in Ukraine. Why are things so much worse in Venezuela? From Economic Star to Sub-Saharan Conditions Exporting a lot of oil is not enough to keep a nation’s economy going, especially when the price of oil falters. CNBC notes that nobody cares that Venezuela just announced a new exchange rate. "Ultimately, this is a fool's errand, because the government fails to address the major economic issues facing Venezuela," said Jason Marczak, director of the Latin America Economic Growth Initiative at the Atlantic Council's Adrienne Arsht Latin America Center. "Venezuela has launched a number of exchange rates over the years, and none of them have kept pace with the black market." Business activity in Venezuela has virtually collapsed, with many companies and skilled workers leaving the country, Marczak said. "This is a country that was an economic star in the region, and now we have a country with sub-Saharan conditions in our hemisphere." What has caused Venezuela’s currency to fall so far in the last twenty years as opposed to the previous twenty years has been the willful destruction of private business and industry by strong men bent on retaining power at all costs. The situation is likely to continue to worsen, if that is possible, until changes occur at the top and private investment and initiative are rewarded again. https://youtu.be/16vsE-tAIkk
Views: 200 ForexConspiracy
Next Dollar Liquidity Crisis
http://www.forexconspiracyreport.com/next-dollar-liquidity-crisis/ Next Dollar Liquidity Crisis By www.ForexConspiracyReport.com The man who accurately forecasted both the beginning and the worst of China’s stock boom now predicts a financial crisis in China. And that crisis may spread across the globe. The crux of his argument is that when a nation does not have enough dollars (dollar liquidity) it is prone to an economic crisis. Bloomberg Business writes about crisis risks of the next dollar liquidity crisis. A shortage of dollars was the common feature in the oil rout in the 1970s, Latin American debt turmoil in the 1980s, the Asian currencies collapse in 1997 and the global crisis in 2008. Next year will see Federal Reserve interest-rate increases, an improving U.S. current-account balance and a stronger greenback, putting strains on the most-leveraged parts of the world’s second-largest economy. "Historically, every time the U.S. current account improved, concurrent with dollar strength, some country somewhere in the world plunged into some sort of crisis," Hong said. “The pressure from a Fed tightening and thus a dollar liquidity shortage scenario will more likely show up” in Hong Kong property as well as China’s online lending and high-yield corporate bonds, he said in an interview. When everyone expected the Yuan (RNB) to continually increase against the USD, borrowers preferred debt in USD. Now that the Yuan is on the verge of free fall there is a shortage of dollars to pay off debt, the next dollar liquidity crisis. The Flow of Capital Money flows to where risk is the least and profit is most likely. As China copes with a falling Yuan, those with the cash are moving it out of China and into North America, the EU and Great Britain. The underlying concern is that China will be unable or unwilling to part with an unsustainable of growth model of investment and exports. The Financial Times speculates on how China affects the global outlook for the next few years. Next year will provide conclusive evidence on whether plans to rebalance the economy towards consumption and continue with financial liberalization have gone out of the window. If they have, China will pay a higher price later on for perpetuating a hugely costly misallocation of resources. The rest of the world also stands to pay a price. A malign external outcome of China’s unsustainable growth model is that returns in many industries have been depressed because of the Chinese contribution to global excess capacity. That is an undermentioned factor in the low levels of investment by industry in the US and much of Europe since the financial crisis. As the Yuan falls and business gets worse in China, cash flows offshore, setting up the next dollar liquidity crisis. Where Is the Dollar Heading? One of the aspects of a dollar liquidity crisis is that the dollar gets stronger. This has been the case for the last few years. However, now that the U.S. Federal Reserve has raised rates it appears that the market had already priced in the rate increase. And, since the Fed says that it will make other raises ever so slowly and carefully there is a chance that the dollar will correct and not head a lot higher. Thus, the next dollar liquidity crisis, if it happens will have to do with a shortage of cash in the nation at risk and not so much with a strong USD. https://youtu.be/ziyvwOVeizM
Views: 432 ForexConspiracy
Beat the Forex Conspiracy
http://www.forexconspiracyreport.com/beat-the-forex-conspiracy/ Beat the Forex Conspiracy Central banks manipulate currencies in pursuit of their nations' monetary policies. High ranking officials from the wealthy nations consult privately regarding acceptable rates of exchange. No matter the reason for these actions they can be viewed as a conspiracy to manipulate an otherwise free market. For anyone who seeks to profit from changes in foreign currency exchange rates the issue is how to beat the Forex conspiracy. There are conspiracies to manipulate the currency markets to drive currency values down and to drive them up. There are times when a savvy Forex trader can anticipate changes in monetary policy, trade figures, employment rates and other factors that drive currency prices. And there are times when a conspiracy by leading nations will drive the market in such a way as to make both fundamental and technical analysis useless. How to beat the Forex conspiracy in these cases is often to resort to trading strategies that make money and contain risk no matter which way the market is going. Forex Options Buying Forex options is a time honored means of limiting risk and locking in opportunity in the currency markets. Options are commonly used by companies that need to pay for goods or services in a foreign currency. The relative values of a home currency versus a foreign currency many change drastically between the signing of a contract and when payment is due. Buying calls on the payment currency gives the buyer the right to execute the contract and use the gain to help pay if the payment currency goes up. If the payment currency goes down the buyer does not execute and enjoys the savings of paying in a now-weaker currency. Currency speculators can also use this approach to beat the Forex conspiracy. A trader can proceed as though there were no risk of intervention by foreign banks or changes in monetary policy. He can buy calls if he believes that prices will rise and buy puts if he believes that prices will fall. He can use Japanese candlestick signals such as the Morning Star in Forex trading. If there is no market manipulation he can execute his contract and buy or sell as is profitable. And he can beat the Forex conspiracy if there is one, as he is under no obligation to trade if doing so is not profitable. Making Money on Every Trade With the use of sophisticated Forex trading software it is possible to make very small trades throughout the trading day. By scalping small profits during the normal daily fluctuations a trader can make money and limit risk. It is important to set trading stops with each trade and not to get greedy or fearful. This sort of trading does not focus on big market moves, trading within channels, or anticipating big jumps in currency prices. Rather it allows the trader to make money no matter which way the market is moving and no matter what the reason is for the movement. Scalping can be an effective way to beat the Forex conspiracy. http://youtu.be/pjl9AE80K-Y
Views: 573 ForexConspiracy
Free Renminbi Exchange Rate versus the Dollar
http://www.theforexnittygritty.com/forex/free-renminbi-exchange-rate-versus-the-dollar Free Renminbi Exchange Rate versus the Dollar By www.TheForexNittyGritty.com China is allowing banks to set a free Renminbi exchange rate versus the dollar in over the counter trading. This may well be a first step in freeing its currency from state control according to a Reuter's article reported in the New York Times. China has permitted banks to freely set their own exchange rates for the renminbi against the dollar in over-the-counter transactions - another step toward freeing the exchange rate from government control. China has been moving slowly toward a free floating currency although slower than North American and European nations would have liked. Most recently banks were required to set Renminbi US dollar exchange rates within three percent of a government dictated exchange rate. The bottom line to a free Renminbi exchange rate versus the dollar is that China believes that its currency is now fairly priced versus the US dollar. As such a free Renminbi exchange rate versus the dollar or other major currencies will not result in a run on the dollar or a run on the Renminbi. Renminbi Internationalization It is a goal of the Chinese government to internationalize the Renminbi. According to the Euromoney online the move to a free Renminbi exchange rate versus the dollar is meant to further the Renminbi's internationalization. A common complaint of companies working in China is managing liquidity with what has been a government controlled currency. In a survey conducted by Euromoney's Research Group in association with ICBC on the Renminbi's rise, close to 3,000 treasury and finance professionals of international companies with exposure to China responded and shared their views on renminbi liquidity management, cross-border trade settlement, inter-company invoicing and some of the main operational challenges corporate treasurers face in the country. Additionally, China would like to have the clout that the US does in international affairs as seen in the ability of the United States and its Western allies to shut down trade with rogue nations via the international banking system. A free Renminbi exchange rate versus the dollar could be viewed with that aspect in mind as well. Free Trade, Fair Trade and Central Banks A seemingly eternal complaint of the North Americans and Europeans is how China manipulates its currency in order to drive up the value of the US dollar and Euro. This practice has made Chinese products more competitive and resulted in the growth of the Chinese industrial machine. Now that there is a move to a free Renminbi exchange rate versus the dollar, one might be naïve enough to think that currency manipulation is over with. Think again. Central Banks are always free to buy and sell currencies and even with a free floating Renminbi the People's Bank of China can still buy dollars to drive the price up and maintain a competitive advantage in trade. Meanwhile China is poised to pay for Russian oil and natural gas in Renminbi, trade Renminbi in London and is setting up Renminbi clearing bank in South Korea to facilitate a bilateral trade deal and trade denominated in Renminbi. Chinese and South Korean leaders have pledged to sign a bilateral trade agreement by the end of this year and introduce direct trading of their currencies to spur cross-border renminbi transactions and deepen economic ties in two of Asia's largest economies. So much for the USD as the only currency to trade against the minor currencies of the world! http://youtu.be/H0e5BJAYo-U
Views: 2424 ForexConspiracy
Profit When China Removes Currency Cap
http://www.theforexnittygritty.com/forex/profit-when-china-removes-currency-cap Profit When China Removes Currency Cap By www.TheForexNittyGritty.com The Forex world was shocked when the Swiss Central Bank removed the currency cap on the Swiss franc versus the Euro. According to their central bank the Swiss were forced by circumstances to remove the currency cap. Newsweek reports the news. The Swiss franc has risen dramatically against the euro following the unexpected removal of the long-standing exchange-rate control by the Swiss National Bank (SNB). The cap - which was introduced in 2011 - was designed to prevent the Swiss currency from falling below 1.20 francs per euro in order to protect Swiss exporters. The announcement on Thursday immediately sent the currency market into a flurry of panic, causing the Swiss franc to soar by around 37% in value against the euro at its peak. Whilst it has since leveled out, it still remains at around 30% of pre-removal value. It simply was going to be too expensive to continue to buy Euros as the EU institutes quantitative easing to stimulate their economy and fight inflation. Those who were betting on a weaker franc at 20 fold leverage were wiped out. Those who were in the opposite trade made huge profits. The question we pose today is who will profit when China removes its currency cap! Is China Next? The practice of buying foreign currency to suppress the value of your own is a common monetary policy for countries like Japan, Taiwan and China. However, it becomes expensive over time. MarketWatch wonders out loud if China will be the next Forex peg to break. The surprise move by Switzerland to scrap its currency ceiling against the euro EURCHF, -0.97% last week is a reminder there can be unexpected collateral damage from central banks waging currency wars. As markets digest last week’s turmoil, expect focus to turn to other fault lines on the global currency map. Here China stands out, as like the Swiss, it runs an implicit currency peg that is becoming increasingly painful to maintain. Due to its longstanding crawling peg to the U.S. dollar, the yuan USDCNY, -0.15% USDCNH, +0.00% has increasingly found itself pulled higher against just about every major currency. The world’s largest exporter has already had to endure two years of aggressive yen USDJPY, +0.70% devaluation since the introduction of Abenomics and its accompanying quantitative easing. To the extent that China has had a thriving economy with double digit economic growth the policy of suppressing its currency is effective. Now that the Chinese economic miracle is slowing down and deflation is knocking at the door it may simply become too expensive to keep buying and losing in Forex trading. But, how can you profit when China removes the currency cap? Will Yuan Currency Cap Removal Be Another Swiss Surprise? What China would like eventually is for the yuan to be an international currency. They would like to export and be paid in yuan and they would like to use their currency directly for foreign investments and purchases. According to Reuters China is a fourth of the way there. A quarter of China’s payments are now in yuan. Nearly a quarter of all cross-border payments in China last year were settled in yuan, the central bank said on Tuesday, underscoring the renminbi's growing dominance as it heads into the league of major currencies. A total of 9.95 trillion yuan ($1.6 trillion) worth of cross-border payments were made in yuan last year, the People's Bank of China (PBOC) said in a statement on its website, as it vowed to increase international usage of the currency this year. For this policy to be totally successful China needs to remove the currency cap and let the yuan float normally with other major currencies. But, when will this happen and how? In all likelihood the decision, like that of the Swiss will come as a surprise or a series of small surprises. Those who trade in markets where the yuan trades will be positioned to profit when China removes its currency cap. http://youtu.be/V4A2YjA1seg
Views: 220 ForexConspiracy
Yuan Ruble Currency Swap
http://www.forexconspiracyreport.com/yuan-ruble-currency-swap/ Yuan Ruble Currency Swap By www.ForexConspiracyReport.com We have written about the persistent fall of the ruble. We have also written about China’s attempts at internationalizing the Yuan. Now the two issues have met as China helps bail out the falling ruble with a Yuan Ruble currency swap. Bloomberg comments on the $24 billion swap program. China is stepping up its role as the lender of last resort to some of the world’s most financially strapped countries. Chinese officials signaled Saturday that they are willing to expand a $24 billion currency swap program to help Russia weather the worst economic crisis since the 1998 default. China has provided $2.3 billion in funds to Argentina since October as part of a currency swap, and last month it lent $4 billion to Venezuela, whose reserves cover just two years of debt payments. The International Monetary Fund is typically the lender that bails out failed currencies. The price is typically that the country gets its financial house in order so that it gets out of debt and so that its currency maintains its value. The price the Chinese exact is different, access to raw materials and alliance on global political issues. Access to Raw Materials There are products that require very specific and often hard to find raw materials. One of these is the solar power cell. An article in PVTech looks at competition for raw materials, especially from the view of a growing Chinese economy. No discussion of commodities would be complete without a mention of China - clearly the 800 pound gorilla in the room. Despite the slowdown in the rate of economic growth to just over 7% in 2014 from over 10% per year in recent years, the country is still growing and doing so from a much larger base than before (the World Bank estimates that China’s GDP is US$9.24 trillion). Effectively, the country is still both the primary producer and consumer of dozens of metals and minerals and is growing more slowly in percentage terms, but still producing and consuming similar amounts of raw materials as she builds out high-tech supply chains and caters to the growing middle class there. This phenomenon must be worrisome to those involved in PV production outside of China as it implies higher raw materials prices in the future (and lower margins), unless technological breakthroughs in how we use metals and minerals in solar are made and commercialized. The point of the Yuan Ruble currency swap as well as help that China is offering to Argentina, Venezuela and others is that China wants and needs access to a wide variety of rare earth minerals, oil, natural gas, etc., etc., etc. The price of the yuan ruble swap is not to get the Russian financial house in order but to hold Russia hostage to the Chinese as their lender of last resort. Sino Soviet Bloc In the bad old days of the Cold War, Russia and China together were commonly referred to as the Sino Soviet bloc. This was despite battalion sized battles on the Russian frontier with China! Now President Putin of Russia is rapidly burning his bridges with the West and cozying up to China again. Not surprisingly the Russian press sees this as a sign of trust between the former allies. Tass writes: China’s readiness to back up Russia’s financial system with its national currency is a sure sign of mutual trust and mounting cooperation between the two countries, polled analysts have told TASS. On Monday, China’s Foreign Minister Wang Yi said China was prepared to support Russia with the yuan and that Russia had the "opportunities and wisdom" for finding a way out of the economic turmoil. The issue in focus is a 150-billion-yuan swap deal between the Bank of Russia and the People’s Bank of China, which allows the central banks to directly buy Yuan and Ruble in the two currencies, rather than via the US dollar. If you look at the Yuan Ruble currency swap as a political move by Russia back to the East instead of a bailout of the Ruble it has significant meaning. China has a slowing economy but significant currency reserves. And China has great expectations of being the most powerful nation. Beware Russia of your rich and hungry neighbor who is lending you money! http://youtu.be/Ax_6GEwTXro
Views: 406 ForexConspiracy
Are There Really Forex Conspiracies?
http://www.forexconspiracyreport.com/are-there-really-forex-conspiracies/ Are There Really Forex Conspiracies? By www.ForexConspiracyReport.com Are there really Forex conspiracies or is the idea of Forex market manipulation just a fantasy? We at the Forex Conspiracy Report are here to tell you that Forex conspiracies are real and that they can cost you big money! Any person, any institution or any government entity may well manipulate the Forex markets if they have motive, means and opportunity. Are there really Forex conspiracies of hidden groups working behind closed doors? Are there groups of Forex traders sharing pricing information via online chat rooms? Do large banks engaged in massive Forex trading manipulate their rates and their trades in such a way as to increase their profits at the expense of their clients? And, are there Forex scams in which individuals say that they can trade your cash on the Forex market and give you huge profits, in return for big commissions? And are there pyramid schemes in which these traders guaranteeing huge profits simply take money from the last person in to pay the person who is leaving? The answer to all of these questions is a resounding YES! And, what do you, the lonely Forex trader, do about this situation other than limit yourself to Forex options to contain risk or simply quit trading in the Forex markets? Individual Dirty Tricks and National Policy We have written about Forex investigations into institutional traders who share info and make more profitable trades because they know in advance where the market will go. This is a dangerous factor in the Forex markets but when it is discovered it is dealt with and the culprits typically spend a long time far away from their Forex trade stations and are barred from trading when they leave prison. And, we have written at length about how Japan, Taiwan, mainland China and many other nations buy US dollars in order to raise the price of the USD and drop the price of their own currency. This has been an effective way for Japan and the rest to sell lots and lots of goods to the North American and European markets. Their goods really do cost less and consumers would be silly not to take advantage. Are there really Forex conspiracies when nations do this? Think of this as a national monetary policy and factor it into your thinking for fundamental analysis of Forex currency rates. Conspiracies in the Shadows The Bilderberg Group has been suspected of all sorts of shadowy activity. The Bilderberg Group is actually an annual get together of about 120 leaders, two thirds from Europe and a third from North America. A third of these people are political leaders and other politicians and two thirds are from areas outside of politics. The meetings are private so that leaders can speak their minds without fear of being instantly quoted on the evening news or an internet chat room. The group was set up in the days following the Second World War as an attempt to keep lines of communication open across the Atlantic and avoid another global war. A similar endeavor in the public eye has been development of the European Union. The idea behind both of these endeavors has been that when people talk and trade they do not go to war. To the extent that Bilderberg is very private it may have elements of a conspiracy but the actors who would carry out the details live in public view. Traders who analyze both fundamental and technical aspects of the market can stay ahead of the curve and still make a profit. Forex Scams The Romans had an answer for this sort of thing. Let the buyer beware. If the guy is telling you that there is such a thing as a free lunch in Forex, do not just walk away, run as fast as you can! http://youtu.be/X8pm5D4ubtU
Views: 301 ForexConspiracy
Chinese Debt Defaults
http://www.forexconspiracyreport.com/chinese-debt-defaults/ Chinese Debt Defaults By www.ForexConspiracyReport.com How many Chinese debt defaults will it take to alert the international business community to the risks of an economic slowdown in the land of Communist managed capitalism? Reuters reports that Chinese bottle maker Zhuhai Zhongfu is likely to miss a bond repayment. Chinese bottle maker Zhuhai Zhongfu Enterprise Co Ltd said it was likely to miss bond repayments due next week, as regulators show increased tolerance for bond defaults even as economic growth slows. If the company misses the payment, it will mark the fourth public bond default in China's onshore bond market, and comes shortly on the heels of another onshore default in April and an increased tempo of Chinese corporate bond defaults offshore. The company, which says it works with clients such as The Coca-Cola Co and PepsiCo Inc, said in a filing late on Thursday that it was still short of 447 million yuan ($72.16 million) to pay interest and principal on bonds due on May 28. As the article notes this will be the fourth recent default in China’s internal bond market. And corporate bond defaults offshore by Chinese companies are happening more frequently. We have worried on these pages for some time about mounting Chinese debt and a not very transparent economic system. Our concern is that these Chinese debt defaults are the tip of the proverbial iceberg and that the Chinese economy and the Chinese yuan are set for a fall. Chinese Bond Yields Rise Chinese provinces are carrying a lot of debt and are having to pay higher interest rates in order to borrow. The Economic Times reports on China sovereign yields. [T]he murky nature of the new provincial debt - nominally issued by the provinces but with strong backing from Beijing - could also be pressuring medium term sovereign yields, according to analysts. Money market investors may be stepping cautiously ahead of an expected bond default by Zhuhai Zhongfu Enterprise Co. , a bottle making firm. The company informed investors last week that it might be unable to fully repay 621.15 million yuan ($100.14 million) of principal and interest due May 28. This is reminiscent of the Greek debt crisis as which bond investors demand a higher interest rate in return for taking on more risk. The situation is not as acute as with Greek debt but if the Chinese financial house of cards collapses the effects will be damaging and more widely felt than a Greek debt default. Chinese debt defaults could be felt across the wide range of developing economies that supply raw materials to China and Western investors with investments in China. The Chinese yuan would likely fall sharply if the economy in China tanks. When Does Debt = Equity? Bloomberg reports that China has passed France is the largest seller of “perpetual bonds.” New regulations allow Chinese companies to hold more than $50 billion in debt as equity! China has surpassed France as the biggest perpetual bond seller this year, creating $15.7 billion of new debt that never has to be repaid and is classed as equity. Rating companies don’t see that as a cause for celebration. Chinese companies now have at least $53.2 billion of the notes on the equity part of their balance sheets, reducing leverage on paper. In reality, debt burdens can be just as onerous because perpetuals typically have coupon increases after a few years that act as an incentive to repay the bonds, the three biggest rating companies said. “Accounting standards treat these perpetuals as equity, but we treat them most of the time as debt,” said Kalai Pillay, a senior director at Fitch Ratings Ltd. in Singapore. How far will this go until there are more and more Chinese debt defaults, a true recession and long term damage to the Chinese currency? http://youtu.be/kFIgyQoa9k0
Views: 205 ForexConspiracy
How Far Will the British Pound Fall?
http://www.forexconspiracyreport.com/how-far-will-the-british-pound-fall/ How Far Will the British Pound Fall? By www.ForexConspiracyReport.com There is a distinct possibility that Great Britain will vote against EU membership in the upcoming June referendum. Forex traders are already speculating on how badly a so-called “Brexit” would hurt the pound sterling. How far will the British pound fall? Bloomberg Business writes that economists see 1985 levels for the pound if the Britain leaves the EU, the so-called “Brexit.” A British exit from the European Union would be so devastating for the pound that 29 out of 34 economists in a Bloomberg survey see it sinking to $1.35 or below within a week of a vote to leave -- levels last seen in 1985. Twenty-three of the economists say sterling wouldn’t recover from that rate within three months of the June 23 referendum. Seven see the U.K. currency falling below $1.20 immediately after a “Brexit” vote. And just one sees it above $1.40. That’s stronger than its low on Wednesday, when the pound fell through $1.39 for the first time since 2009. The BOE would respond to a vote to leave the EU by cutting interest rates from a record-low 0.5 percent, said Enrique Diaz-Alvarez, chief risk officer at Ebury Partners, a London-based broker which topped Bloomberg’s rankings for forecasting euro-sterling in the second quarter of 2015. This could happen as soon as the day after the vote, he said. British citizens may have their own reasons for wanting to the leave the European Union but if they vote to leave there will be a price to pay starting with a falling pound sterling and following up with broad based economic consequences. How Britain’s Economy Does Outside of the EU? The Financial Times looks at three possible economic consequences of Brexit. The three possibilities are a successful transition with a booming economy, a shaky transition with an economic slide and a disastrous transition with a recession, loss of confidence in the British economy and loss of trade partners. Here, the FT looks at the case for three very different economic futures for a UK outside the EU: a Booming Britain, a Troubled Transition and a Disastrous Decision. The first envisages a vibrant economy unconstrained by Brussels red tape; the second foreshadows a period of turmoil and financial instability before the UK finds its way; the third portends an economy that suffers long-term damage. The free flow of goods and people is an economic stimulus that will be lost if the UK leaves the EU. The will be lost in a Brexit. However, leaving the EU will remove what some consider as an excessive regulatory burden. Britain will regain control of her borders but find trade more difficult. And international businesses such as British banks are already talking about setting up shop in Paris and Berlin in order to continue to do business on the continent. Trading the GBP The pound has already fallen a bit on the news of a referendum in Britain staying in the EU. And the fall of the pound extends across various trading pairs. According to ExchangesRates.org in the UK, EU referendum uncertainties weigh heavily on the pound. The dramatic falls experienced by the Pound in the last four days has seen the Pound lose over six cents in value against the Aussie (Australian Dollar) to trade at its lowest level since May 2015. The catalyst has been the decision by British Prime Minister David Cameron to set the date of the ‘in / out ‘ referendum of the UK’s membership of the European Union for 23 June. Cameron confirmed the date in an address to the British Parliament noting "The deal we have negotiated with the EU's 27 other states would give Britain a "special status" within the Union and ensures it never becomes part of a European super-state." Further pressure was heaped on both Cameron and the Pound after London Mayor Boris Johnson backed the 'leave EU' campaign raising fears about a British Exit or 'Brexit' from the EU. If British citizens accept that their prime minister has negotiated a deal that will protect them from dominance by an EU super state the pound may recover. Otherwise how far will the British pound fall? That will play out after the referendum in June. https://youtu.be/WjpyGK7eEJs
Views: 2464 ForexConspiracy
Strong Wholesale Funding Regulations
http://www.theforexnittygritty.com/forex/strong-wholesale-funding-regulations Strong Wholesale Funding Regulations By www.TheForexNittyGritty.com The new US Federal Reserve chairman, Janet Yellen, spoke recently about strong wholesale funding rules. As reported in the online Fox News, Yellen focused on liquidity issues in banks, a problem that has been partially addressed by raising international standards for the amount of capital banks need to keep in reserves. The need for strong wholesale funding regulations goes back to the near collapse of financial markets in 2008 when large banks did not have sufficient cash and borrowers could not get help in short term credit markets. The Fed believes that strong wholesale funding regulations are needed on top of the so called Basel rules which raised capital reserve requirements for major banks. For those of us who are not international bankers, however, just what is wholesale funding? Wholesale Funding Banks rely on wholesale funding for capital when deposits are low such as when interest rates are very low or when the economy is weak. Wholesale funding is the use of other resources of capital outside of core deposits used by banks to manage operations and limit risk. Sources of wholesale funding include monies from local, state and federal sources, advances from the U.S. Federal Home Loan Bank, the primary credit program of the United States Federal Reserve, foreign source deposits, deposits from internet or CD listing services and brokered deposits. A major issue with wholesale funding is that it is typically very interest rate sensitive. Sources of wholesale funding such as wealthy foreign investors commonly chase high interest rates and can easily pull a large chunk of a bank's wholesale funding overnight. Whatever the reason, when wholesale funding drops off, a bank will not have enough working capital to do business. This is what happened to many large banks during the recent financial crisis. This is why Fed chairman Yellen is talking about stronger wholesale funding regulations. Basically when banks are less leveraged they are more secure. However, the Fed has been fighting a battle to insure liquid capital markets since the 2008 market crash and before and is not going to tighten up credit markets as to cause another credit crunch. Is Any of This Working? Deutsche Bank details its funding and wholesale funding sources in its Investor Relations Funding online page. Diversification of our funding profile in terms of investor types, regions, products and instruments is an important element of our liquidity risk management framework. Our most stable funding sources are capital markets and equity, retail, and transaction banking clients. Other customer deposits and borrowing from wholesale clients are additional sources of funding. Unsecured wholesale funding represents unsecured wholesale liabilities sourced primarily by our Global Liquidity Management business. Given the relatively short-term nature of these liabilities, they are primarily used to fund cash and liquid trading assets. Unsecured wholesale funding comprises a range of unsecured products e.g. Certificates of Deposit (CDs), Commercial Paper (CP) as well as term, call and overnight deposits across tenors primarily up to one year. In addition, included within financing vehicles, is €11 billion of asset-backed commercial paper (ABCP) issued through conduits. The bank goes on to show through a number of graphs where its wholesale funding comes from. Is the Fed Doing Enough or Too Much? From the viewpoint of a Forex trader stable financial markets are good for hedging risk in international transactions. Volatile markets can lead to trading profits if the speculator can successfully anticipate which currency will win and which will lose during a financial meltdown. Stronger whole funding regulations are part of the picture of what the Fed is doing. And the stimulus program in which the Fed purchased US Treasuries and other bonds is another. The Fed is tapering its stimulus program and is generally expected to close out monthly purchases by year end. Interest rates are at issue here and their effect on the economy, national and global. The current online issue of Forbes speculates on when interest rates will rise and a change in Federal Open Market Committee interest rate targets. The FOMC participants raised their short-term interest rate projections from 0.75% by the end of 2015 to 1.0%. Though the increase wasn't very large, it was a move the markets did not embrace judging by the ensuing sell off in equities. The 2016 forecast jumped from 1.75% to 2.25%. This also seems to indicate a change in the FOMC's thinking. A concern for Forex traders is how well the Fed under Yellen can handle all that is on its plate. And a bigger concern is how the market reads the actions of the Fed and will over adjust driving currency prices too high or too low. http://youtu.be/jYw1OyunJYA
Views: 157 ForexConspiracy
Do Forex Signals Work?
http://www.forexconspiracyreport.com/do-forex-signals-work/ Do Forex Signals Work? By www.ForexConspiracyReport.com Currency traders use signals to guide their buying and selling. Do Forex signals work? First remember that there are three kinds of Forex signals. These are basic fundamental information that affects currencies, technical signals on a trade station program and messages from an alert service suggesting what to buy or sell. First, let’s look at the fundamentals. The World of the Fed When the chairman of the US Federal Reserve speaks everyone listens. An announcement that interest rates are going up will invariably send the dollar higher and a drop in oil prices will hurt currencies such as the Canadian dollar or Colombian peso and other oil producers. These signals work and traders should pay attention. Rice Trading to Technical Analysis Long ago when there were Samurai in Japan there were rice markets and rice traders. And those rice traders recognized that when the price of rice fluctuated in a certain way that one could predict what would happen next to the price of rice. This was a first instance of technical analysis and is referred to as Japanese Candlesticks based on the symbols that describe daily trades. A purely technical trader relies on charts and trading patterns to guide his trades. In fact today there are people trading Forex with candlesticks. If Japanese Candlesticks are statistically based why not use any of the many Forex trading programs that are available? An advantage to trading Forex with Candlesticks is that the Candlestick signals are clear and easy to read. There is less chance of a trader missing a signal due to an overly complex system. In addition, Candlestick signals can be superimposed on stock charts of varying complexity and used as attention getters among the vast amounts of data that some programs throw at the trader. Today there are many statistically based programs that traders use. The advantage of the old candlestick system is that it is visual, easy to learn and simple to use. Do these signals work? They have stood the test of time. The key to using any technical system is to learn it first and stick with trades where the program offers a clear indication of profit. Another caveat is to only apply technical analysis to major Forex pairs that trade in high volume and liquidity. There may be profits in minor currencies but too often the trading volume is so small that technical analysis is inaccurate. Advice from the Experts Where do signals from others come into play in trading currencies? If you are trading a given currency and news hits that indicates higher volatility in another currency you may wish to switch. In this case a Forex signal from a paid for service will be of use. Likewise if you are busy trading and have missed a major news release that might affect your current trading pair it might be good to know before you get blindsided in your trades. If you are going to pay for a service make sure that the info that you get helps your trades and does not just subtract from your bottom line. That should be the guide to whether or not signals work. https://youtu.be/YbMKSkUgFSw
Views: 219 ForexConspiracy
UBS Suspends Six Forex Traders
http://www.forexconspiracyreport.com/ubs-suspends-six-forex-traders/ UBS Suspends Six Forex Traders By www.ForexConspiracyReport.com News reports reveal a widening Forex investigation as UBS suspends six Forex traders. We wrote previously about an international investigation of Forex markets by the U.S. Department of Justice, the UK Financial Conduct Authority, and authorities in the European Union. As always our concern for the Forex trader is beating the Forex conspiracy as the wealthy and well-connected manipulate currency markets. News Update as UBS Suspends Six Forex Traders According to the Forex news, UBS suspended two traders in Zurich, three in New York, and one in Singapore. This is a result of the ongoing Forex investigation and a direct result of the bank's own internal investigation in rigging of currency benchmarks. To date there have been thirty Forex traders suspended from eleven banks. Allegations are that traders used chat rooms to share info and rig Forex benchmarks allowing them to trade more profitably while others incurred losses. Another Libor or More As UBS suspends six Forex traders at once investigators are wondering if this will turn into another LIBOR scandal. The LIBOR scandal was when investigators found that banks were rigging inter bank loan rates. The end result of the LIBOR scandal as that banks had to pay billions in fines to regulators, fire dozens of traders and are still are facing law suits that could run into the billions of dollars. Now we hear that silver and gold trading may also have been subject to the same sort of problems as the Forex Conspiracy with traders fixing benchmarks. Strategies for Traders With all of this underhanded dealing going on how how do you beat the Forex conspiracy? If you cannot trust the end of day fixings and benchmarks how can you profit in trading Forex? There are still lots of profitable Forex strategies even if someone is attempting to rig the market. All of them, however, probably involve very short term market exposure. If someone is manipulating a currency pair you may see substantial and unexpected price movement. If you simply scalp profits while the trend continues you will typically be able to make money provided that you do move in and out of the market rapidly. Also one can follow intraday trends but with the same admonition, keep your presence in the market short. Untrustworthy Fundamentals As UBS suspends six Forex traders in a widening scandal, we are reminded of a simple fact. When there is a Forex conspiracy you cannot trust fundamentals in the short or medium term. However, you can still trust fundamentals in the very long term. Unscrupulous traders may be messing with the benchmarks each and every day. But, they are not deciding how trade figures between Japan and the USA will turn out and they have no say in the US non-farm payroll report. The Forex Conspiracy folks who fiddle with benchmarks do not have anything to say about the Russian takeover of Crimea and the subsequent fall of the Ruble. So, as UBS suspends six Forex traders do not give up on Forex trading but rather adjust your trading practices in order to minimize any losses and trade smart. http://youtu.be/0UMmzheH9rE
Views: 254 ForexConspiracy
Commodities and Currency Exchange Rate
http://www.forexconspiracyreport.com/commodities-and-currency-exchange-rate/ Commodities and Currency Exchange Rate By www.ForexConspiracyReport.com According to Bloomberg currencies of commodity exporters are falling as raw material demand from China falls off. Currencies of commodity-exporting nations including Australia fell as a gauge of raw materials slid to a five-year low on speculation demand will drop after China signaled slower economic growth. The Australian dollar sank to a seven-month low against its U.S. counterpart, dropping against most of its 31 major peers. South Africa’s rand and Brazil’s real weakened, and an index of emerging-market currencies reached the lowest level since 2009. Commodities and currency exchange rate are connected because a major source of income for nations like Brazil, South Africa and Australia is selling their raw materials to nations like China. As the Chinese economy slows so do those of their raw material suppliers and commodities and exchange rate are so connected that the real, rand and Aussie dollar are taking a hit as well. Australia Coal Exports and Pollution Control Efforts in China The Sidney Morning Herald notes that there is an Australian export risk due to an impending ban on dirty coal in China. Australian coal exporters are scrambling to clarify the fallout from changes to China's coal import rules, which could expose the industry to billions of dollars in lost sales as China seeks to cut air pollution. The Chinese government is to limit the use of imported coal with more than 16 per cent ash and 3 per cent sulfur from January 1, 2015, in a bid to improve air quality, especially in the major cities such as Beijing and around Shanghai. Apparently the only issue tying commodities and exchange rate for the Aussies is not just a fall off in Chinese manufacturing. Pollution in major Chinese cities has become a big issue and may be a driving force to reduce imports of low quality coal. The net effect for Australia either way will be a reduction in exports and a hit to the AUD. Trading Exporter Currencies The Financial Times reports that the export dip weighs on Australian growth. Australia’s economy slowed in the three months to end of June as a dip in exports cooled growth that had reached its fastest pace in two years during the previous quarter. Official figures on Wednesday showed gross domestic product had risen 0.5 per cent in the second quarter, slightly above analysts’ expectations but below the 1.1 per cent rate recorded three months earlier. Year-on-year growth moderated to 3.1 per cent over the financial year to June 30, against 3.5 per cent on the previous quarter, according to the Australian Bureau of Statistics. A ten percent fall in economic growth is sufficient to drag down the value of the Aussie dollar because of the connection of commodities and currency exchange rate. Trading Exporter Nation Currencies To profit in Forex trading from the connection between commodities and currency exchange rate the trader needs to follow the world of commodities and commodity trading. Many times options traded on commodities give a hint as to where commodity values are going. And knowing who produces what and who they sell it to will help a trader make money in the world of commodities and currency exchange rate fluctuations. http://youtu.be/IH-FT2LIS9k
Views: 286 ForexConspiracy