Latest Posts

  • Carry Trading Danger

    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

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  • ECB Outlook: It’s Time to Cut Interest Rates

    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.

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  • Recent USD Rally… Why?

    Jul 23, 2008 / 4:37pm / in Economics, General, Oil, Patterns, United States Dollar, Forex News

    With mixed news coming out of the world’s remaining superpower in recent weeks, the recent US dollar rally induced widespread befuddlement. With Europe suddenly looking economically worse-off than America, it is easy to understand why the USD has rallied against the EUR. However, the USD has rallied against many of the major currencies, including the JPY and the CHF. In other words, it is not only bad news coming out of the Euro-Zone that is fueling this USD rally. So, the important question is what exactly is causing this rally?

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  • The Joys of Being in a Range-Bound Market

    Jul 17, 2008 / 6:51pm / in Currency, General, Money, Patterns, Forex News

    For several months, one of the hottest debates in the currency world has been “1.50 or 1.60?” Those who follow the Euro-US Dollar currency pair have been debating its future for several months. Since around the end of February, the price has been locked within a range of 1.50 and 1.60. Only on three days has the price ventured outside that area during the past few months, yet each of those days, the price closed back within the range.

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  • Psychology and Investing

    Jul 10, 2008 / 1:26pm / in Economics, Forex Trading, General, Money, Forex News

    Take your emotions out of the picture, that’s what they say. While some investors are able to treat securities in an indifferent manner, few are able to ignore the feelings of greed or fear that come with profits and losses. For people involved in financial markets, finding ways to trade without emotion is one of the toughest and most important tasks that an investor will attempt.

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  • End of the World Trade

    Jul 2, 2008 / 4:16am / in Americas, derivatives, International Investing

    I asked one investment banker what might cause half of North America’s top corporations to default. No ordinary economic recession or natural disaster short of an asteroid strike could do it: no hurricane, for example, and not even ‘the big one’, a catastrophic earthquake devastating California. All he could think of was ‘a revolutionary Marxist government in Washington’. That’s not a likely scenario, yet the cost of insuring against it had shot up ten-fold. Normally one can buy $10 million of end-of-the-world insurance for between two and three thousand dollars a year.

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  • Insurers to Banks: Swap Guarantees for Nothing

    Jun 24, 2008 / 6:28am / in derivatives, International Investing

    Let’s say you file a claim with the insurance company after a disaster. Instead of getting a check, the insurance company tells you that it would prefer NOT to pay the claim since that would put the insurance company in a precarious financial position. What would your reaction be? Some banks are confronting a similar question with their CDS insurance.

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  • Fundamental Analysis and Central Bank Resources

    Jun 13, 2008 / 10:32am / in Forex Trading, Fundamental, United States Dollar, Forex News

    Fundamental analysis can be daunting, but this is what drives the market. I don’t care how many doji’s or buy signals Deutche Bank saw on the eve of the Russian Debt default.

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  • Leverage: Blessing or a Burden

    Jun 12, 2008 / 9:55am / in Currency, Forex Trading, Fundamental, Forex News

    Leverage allows any trader to control large amounts of capital; it is every trader’s best friend and worst enemy. We all realize that investing involves risk, and no one makes money without some degree of risk. That being said excess risk has another name: margin call. This isn’t the CME were your broker gives you a courteous call saying “pay up sucker,” no this is online currency trading. Or maybe you’re so confident in your trades that you never lose. Probably not if you’re like t

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  • Currency Wars: The Dollar Strikes Back?

    Jun 12, 2008 / 9:53am / in Currency, Forex Trading, Fundamental, Forex News

    Something monumental has happened: the US dollar has done well, and it didn’t require a divine intervention.

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