Mar 21, 2012 / 7:34am / in Carry Trading, Forex Trading, Japanese Yen, Forex News
Many are talking about how carry trades by speculators are at records highs since the financial collapse of 1998. The Japanese Yen has an abundance of short positions as their funding cost is only .25%. The Swiss France has also taken hard hits as
Aug 21, 2008 / 2:34pm / in Forex Trading, General, Forex News
In the days leading up to the European Central Bank’s rate decision on July 3rd, 2008, many political leaders around Europe publically pleaded for the ECB to leave interest rates unchanged. Among others, French President Sarkozy voiced the opinion that the recent rise in inflation was due primarily to the spike in commodity prices.¹ As such, Sarkozy suggested that though hiking interest rates would not really help in lowering inflation, it would adversely impact growth.
Aug 21, 2008 / 2:18pm / in General, Forex News
The price of oil has dictated the dollars recent resurgence, but it has not been favorable to the pound. The United Kingdom is a net oil exporter; through North Sea oil fields that produce around 1.7 million barrels a day. A drop in the price of oil would hurt profit margins at some of Britain’s largest oil producers namely BP. On top of this North Sea oil production has stagnated in the past couple of years. Peak oil is a term used to describe how oil production retreats rapidly after achieving peak output extraction.
Aug 20, 2008 / 3:33pm / in General, Forex News
“It may still just be summer but there is a feeling of chill in the economic air. The British economy is going through a difficult and painful adjustment due to higher energy and commodity prices and in banking, credit and housing markets. This adjustment to our economy cannot be avoided and as a result, inflation is rising and growth is slowing."
Aug 13, 2008 / 3:56pm / in Eastern Europe, General, Interest Rates, News Releases, Western Europe, Forex News
It is not easy for many to admit that they made an error. It seems the President Trichet might finally be starting to embark on that difficult path. After raising rates in the Euro-Zone over the protests of many top figures within that continent, Trichet finally admitted what the rest of the world had realized some time ago: the Euro-Zone’s growth prospects are weak. This announcement/confession reflects that the ECB is starting to question if it did the right thing in raising rates.
Aug 13, 2008 / 3:43pm / in General, Forex News
The Dollars resurgence can be attributed to a variety of factors European stagnation, oils collapse, or better yet Michael Phelps.The most important factor is that the USD is considered the lesser of two evils in regards to economic health.Governor King came out and expressed that the down side risks of recession outweighed the future risks of inflation.Hence the massive sell off of the Cable this morning across the board.The pound yen moved nearly 400 pips over night while the GBPUSD fell off a cliff because expectations were being priced in the market.However the Euro and the pound did no
Aug 6, 2008 / 4:06pm / in General, Forex News
So a week ago, I wrote that the US Non-Farm Payrolls was the event “for all the marbles.” That was true, and we have seen the US Dollar continue its rally through this week largely on the back of that news. However, within the span of one hour tomorrow, there are two news events that are likely to have a similarly large impact. Tomorrow two of the largest central banks in the world are announcing their interest rate decisions.
Aug 6, 2008 / 4:02pm / in General, Forex News
The AUD has had a remarkable run for the past seven years, the AUD has appreciated from .48 to near parity over the past seven years. The commodity boom has been very beneficial to the Australian economy. Exports of iron and raw materials have caused the Aussie economy to boom. The global slowdown will definitely hurt demand for raw materials from the land down under due to there elasticity.
Aug 1, 2008 / 6:24am / in General, Forex News
The theory of Purchasing Price Parity is hard to digest because of the fact that is so abstract and it does not apply non-tradable goods.PPP is a theory that states all goods will cost the same across borders, because if one country charges more then consumers will change their spending patterns.There are a number of assumptions perfect information, immediate capital flows, etc.The theory does have relevancy in the currency market, because it can help traders distinguish over valued currencies.The Big Mac index developed by the Economist magazine is a great way to explain the theory.Essenti
Aug 1, 2008 / 6:22am / in Uncategorized, Forex News
The theory of Purchasing Price Parity is hard to digest because of the fact that is so abstract and it does not apply non-tradable goods.PPP is a theory that states all goods will cost the same across borders, because if one country charges more then consumers will change their spending patterns.There are a number of assumptions perfect information, immediate capital flows, etc.The theory does have relevancy in the currency market, because it can help traders distinguish over valued currencies.The Big Mac index developed by the Economist magazine is a great way to explai