Online Forex (FX) Trading | Forex Brokers | Foreign Exchange Market

On a stronger dollar the prices for the oil witnessed a downfall and talks have been conducted on the rising oil prices. On the other hand the price for gas is witnessing a constant rise leaving behind the $4 mark. After Mr. Paulson who is the Treasury Secretary gave a comment that he is not denying the interference to make the American currency steady the dollar witnessed an improvement as compared to the euro.

Seeing the rising prices of the oil all the countries engaged in producing oil were called for a meeting by Saudi Arabia. One of the Saudi minister said that they will be working along with OPEC for the supply of the oil in the present times and in the near future also. He went to add that the current rise in the price is groundless.

On New York Mercantile Exchange the price of the crude crashed down $4.19 to stop at $13.44 a barrel. It was on Friday that the oil witnessed a record breaking rise of more than $9 in just one day, but on the other hand the gas didn’t stopped and kept on rising. According to Oil Price Information Service and AAA the average price of the gallon across the nation rose by more than 1.6 cents and reached to $4.021. Even though some parts of the country paid the price for weeks now but it was on Sunday that average crossed $4.

Mr. Tom who is a chief oil analyst and publisher at Oil Price Information Service in Wall, New Jersey was of the view that if the oil stayed near $138 a barrel you can still expect the gas prices to rise in the coming days. According to a spokesman of AAA the prices will still rise to 2 to 3 cents. With the gas prices going up where some of the drivers have cut back on the other hand the gas producers will have to raise the prices seeing the prices of the crude oil also increasing.

The rise in the gas prices has already made the drivers to change the type of cars they used to drive or they are planning to buy. Seeing all this General Motors has also made an announcement last week that that they will be shutting down their four units engaged in producing pick-up trucks and SUVs.

It will be really a costly affair if you have a SUV which costs around $90 to fill it up not to mention if you have to pick and drop your kids to school. Around Memorial Day the prices of the gas often witness a raise and then move back in the summer time. After last week when Mr. Trichet who is the President of European Central Bank made a comment on the rising interest rates in the month of July to face price rises the sharp rise was witnessed. This made the euro to easily rise against the dollar.

In an interview Mr. Paulson said that he don’t deny the fact that they are interfering to make the dollar stable but he refused to make any comment on what will be the government reaction towards this issue. Mr. Paulson’s comments made an impact on the euro to decrease sending oil crashing down.

EURUSD has reached to new heights as the pair will be reaching the landmark of around 1.5298. It is a big step when it is compared to the sudden price change where the dollar was struggling for its re-existence. The start of New York’s session quickly overcome with this attempt when it was realized the economic records generated fear that the consumer sector is no more concerned with the employment.

The American labor market data of February has really affected the report of Friday’s non-farm payroll. The reduction in the jobs was more than eleven percent and it showed that the working staff is not reduced by the companies. The fact cannot be denied that products those are related to the service segment witnessed a layoff as the government and non-profit organizations showed a rush.

It was not at all expected that the report of ADP employment will register a downfall of more than twenty thousand and it is the worst reading since June in 2003. It was evident that the goods and services segment witnessed considerable losses. The service segment to employ new employees but it is making progress at a very slow speed. It does not promise the employment of ISM non-manufacturing index and not for the NFP release on Friday.

The reduction in the employment will only add on to the already worsened American economy. ISM manufacturing gauge recorded the downfall that is the worse in the previous four years and the service segment reported deeper concerns. The print of 49.3 was registered a two point high than the standard point of around 4.6, this is a improvement as compared to the readings of the month of January which is known as the worst reading since 2001.

The world’s biggest economy is in depression and they are just waiting for a word from government’s GDP. After the ISM report came there were certain developments made while some of the developments were reducing. A significant development was detected in the business. This shift is suggestive of the inventory in the same period and the readings of the new orders and the employment were also reducing and not at al impressive.

It was a sudden surprise that the export orders shot down to more than 45 percent and the new dollar provided the reduction to the foreign consumers. Now when EURUSD has been making indecisive moves in getting further to the mark of 1.5298, the basics offer to additional worsening of the American dollar. The experts are not denying the fact for making further developments in the same area that the basics are also favorable. 

After the rate cuts by the Fed, the prices of gold are touching the sky. It has become one of the most valuable assets after the U.S dollar. As the U.S dollar is already weakening and the prices of other commodities also falling, Gold is the only metal that is going strong. Also, the dollar index, which tracks the performance of the greenback against six other major currencies, declined 0.6% at 75.125.

Gold futures set a new record $942.20 an ounce on Wednesday, when the Federal Reserve had cut the fed funds rate by 50 basis points to 3.0%. This shows that the Federal Reserve is open for more cuts, indicating it’s concerned about the economic outlook.

With the love season in full swing, people are likely to purchase Gold for their loved ones. The owners of the Gold Companies like D’damas have confirmed that they are expecting a surge in the jewllery sales during Valentine’s Day season by 17-18% this year. This is not restricted to just India but overseas as well.

People are attracted for buying more of gold because it is seen as an alternative asset against U.S dollar. And, in the present circumstances, where dollar is facing a slump, bullion is ready to take its place without any deliberate effort. People see it as a safe and secure investment.

Inflation and improbability require insurance. Gold is an insurance against all odds. If you possess gold, it is considered as a safe option. Even if its prices go down, you don’t need to dispose it off because it is bound to rise again. And you can then make a profit by selling it at a higher price.

On the other hand, the demand of Gold has suffered due to lower imports amid high prices. The reason being that the U.S economy is seeing a set back.

The future of Gold also lays in the hands of the US CPI inflation data, which will determine the change in prices. If the dollar still goes down, then gold is likely to be benefited and will rule the market.

In addition, the prices of the base metals and oil are also lower comparatively. Platinum stands at 1783, while Palladium at 421. Silver went down at 16.76. Gold being at the zenith, 904.

Bullion is rocking and is meant to reign unless the dollar makes a comeback. So, buy Gold  and play safe.

The past year has been very crucial for the U.S Dollar. In Jan, where its rate in terms of Indian Rupee was 44.2, it sunk to 38.4 by the end of the year. Also, if we look at the other currencies of the world, the U.S Dollar has become weaker comparatively. For instance, the price of Australian Dollar and Euro did not change much over the year.  Infact, there was an increase in the Canadian dollar, even if it was a small one. Leaving British pound being as an exception, all other currencies were not affected as U.S Dollar.

It hasn’t happened overnight though. Everybody’s aware of the falling price of the U.S Dollar in the foreign exchange market.

The consumer demand has slowed down over the year. And its continuous dropping rate has made the trade analysts wonder if the U.S economy will fall into a recession. Because if it does, it will not be a surprise to anyone. But if it really does, then where does the U.S dollar stand? This is a fateful question whose answer is dreaded by everyone.

The U.S market is seeing a slump in all the areas whether electronics, furniture, clothing. According to a news agency, 2007 has been the worst year for the U.S retailers since 2002. The growth in the labor market already retarding, it might lead the U.S economy into a recession.

Before going further, let’s find out what recession actually means.
Recession is a decline in a country’s gross domestic product (GDP) for two or more consecutive quarters of a year. Following this definition, we can say that the US economy is still safe from being descended into a recession. The reason being that in the last two quarters; its GDP growth was quite satisfactory. There has been just one bad quarter and the first quarter for 2008 has started, so it’s too untimely to judge the future of the US economy.

In this regard, the Federal Reserve has a big role to play. It has the power to determine
whether US economy will land in a recession. Traders were looking up to the Fed to help them out in this time of crisis. In a little more than a week, the Federal Reserve has lowered the interest rates by a total of 125bp, which is more than all of the rate cuts that they had made last year.

At present the US dollar is yielding only 25bp more than Switzerland’s Franc, which means that once the Fed lowers the rates again in March, as expected, then the US dollar will be tied with the Franc as second lowest yielding currency.  
 
In the meantime, there has been a huge hike in the price of Gold, thereby weakening the price of US dollar all the more.

What will the year 2008 bring in for the US dollar is still uncertain. Will the price of US dollar decline all the more in the Foreign Exchange market or will it fight with the current situation and emerge as a superpower as always. Well for this, we will just have to sit and watch.

Euro is now trading very close to a crowded area, full of support and resistance lines; a continuation of the south move will get the pair very close to the next support area around 1.3600/15..

If the beginners do not have the relevant information and knowledge about Forex market and trading, they are likely to lose all their money in it. This information was shared with all by Andy Poon, a spokesperson for the British Columbia stocks regulator, on Friday, in Vancouver, Canada.
He also stated that the Foreign exchange trading was not for new and untrained traders. 

Foreign exchange or Forex trading is where trading of foreign currencies takes place. Somewhat like a stock market where a trader trades one stock for another, here an investor trades one country’s currency for another

In the Forex market, the currencies are exchanged to make profit from the differences in the exchange rate between the two currencies too, almost like the stock market.

But Forex trading is a further complex trading of currencies, than that of trading equity. Internet, with its mushrooming online software platforms for trading are luring away aspiring traders to trade from home, making it even simpler for them to jump into it.
This has also opened up the world of foreign exchange trading to an extensive range of Forex aspirants.

Just because the investors feel that they know how to use internet, does not make them eligible for Forex. Trading Forex sitting at home is as complex as every other medium. Internet does not make it any simpler and safer. Trading foreign currencies is a complex procedure which involves a lot of expertise and knowledge.

The B.C. Securities Commission has warned every aspirant trader that trading Forex without appropriate skill and knowledge can be very risky.  

Andy Poon, a spokesperson for the British Columbia stocks regulator, is also of the opinion that online seminars and trainings for Forex trading are not sufficient for the amateurs to get full knowledge about Forex.
He also said that these online programs and seminars cannot substitute for the research, study and professional skills needed by a trader to battle the currency markets.

Andy Poon also stated that Forex is sometimes all about investing and trading on margin and in such cases, people tend to borrow money from others to make their investments. This kind of a measure by trading on margins can at times earn them extravagant profits, but it also has equal potential to get those traders extreme losses.

George Davis, chief FX technical analyst at RBC Capital Markets, is of the opinion that tracking the things that can have an affect on the value of a currency is a far more difficult process than tracing the factors responsible for affecting the stocks.

He said that for currency exchange, a trader needs to start with knowing all about what is going on with a particular country’s politics, as well as take into consideration its economy, government or central bank policy, and other geopolitical concerns.