Archive for the ‘Forex Guide’ Category

Chances of European Stocks to open small

Friday, October 9th, 2009

On Wednesday there are chances that European Stocks will be opening low, with little near-term merging of the fresh profits probably following an impressive performance in the earlier session. On Tuesday, the European indexes increased two percent more in spite of the calls opening inferior, especially in the vital resources field. Ben Potter who is a research analyst with IG Markets said that with the prices of gold all time high, the miners also had a strong position in Asia and this area can also be predicted to continue in favor of European business.

Ben said that FTSE 100 of London index came down by nine points at 5128.0 or 0.1 percent, CAC- 40 of Paris came down 0.2 percent or ten points at 3759.0, DAX of Frankfurt came down 21 or 0.3 percent at 5636.0. In addition to this the investors is also anticipating American third-quarter earning numbers, which started later Wednesday with reports submitted by Alcoa. In the meantime on Wednesday, majority of the stock markets of Asia were high. Resources stocks, energy, and gold were shining when the prices of spot gold reached a record high.

Kospi Composite of South Korea increased 0.2 percent, Nikkei 225 of Japan increased 1.1 percent, and Hang Seng of Hong Kong increased 19 percent. American stocks rallied largely for a second session on Tuesday as the investors appeared even more hopeful about the stat of the third-quarter profits season. The index ended up 1.3 percent at 9731.2. The Standard & Poor’s 500 raised 1.3 percent at 1054.6. The profits were lead by the energy corporations which were up by 2.1 percent and materials organizations increased by 1.9 percent and NASDAQ Composite increased at 2103.5.

As for the foreign exchanges, on Wednesday the dollar was mixed in the early hours of European trading. The euro on Tuesday slightly became normal to $1.4719 from $1.4721 in late New York trading. But the dollar came down to Y88.54 from Y88.82. In another place the prices of spot gold reached the record high at $1042 per troy ounce. The metal was at $1042.19 at 0625 GMT, $4.44 high from New York close.

In New York, the lead November Nymex crude oil futures agreement raised 53 cents at $71.41 per barrel, after finalizing 47 cents more on Tuesday. The government bonds of Europe were slightly less following the healthy movements in equities across the world. At 0625 GMT, the December German bund future came down 0.04 at 122.37.

Asian stock markets on a high

Friday, October 9th, 2009

On Wednesday, most of the Asian stock markets were high and it was supported by Wall Street’s rally. Resource stocks, energy, and gold were shining after the prices of the gold went up a record high as the prices of the oil and base metals increased on Tuesday. The investors were expectant about American third quarter income, which started on Wednesday with the reporting of Alcoa (aluminum giant). Bell Potter who is a Senior Client Adviser at Stuart Smith, Sydney said that there are only little negatives witnessed, with more hopefulness about profit margin growth and not essentially top line income impelling the market.

Nikkei 225 of Japan was up by 0.8 percent; Kospi Composite of South Korea was up by 0.2 percent, Hang Seng of Hong Kong was at 1.6 percent, and S&P/ASX 200 of Australia was by 1.5 percent. Dow Jones Industrial Average prospects were up by ten points in the screen trade after the closing of DJIA at 1.3 percent.

After the prices for the spot gold increased and touched a record high on Tuesday at $1043.54 per troy ounce, the gold miners were leading the way in Australia. The yellow metal was lately at $1038.29 per troy ounce which came down by $3.49 from the close of New York. Lihir Gold increased by 5.1 percent and Newcrest Mining rushed 6.3 percent. On Tuesday, the profits earned by base metals price assisted BHP Billiton up 2.6 percent and Rio Tinto increased by 4.2 percent as the increase in the crude oil prospects helped Wood side Petroleum by 0.3 percent and Santos by 1.0 percent.

The lead November Nymex crude oil prospects agreement was lately increased 42 cents at $71.29 per barrel, settling at 46 cents more in New York on Tuesday. Energy stocks and miners too surpassed in the Asian markets. Mitsubishi Materials was up 6.5 percent, Sumitomo Metal Mining in Japan was up 5.2 percent, and in Korea Korea Zinc rushed 6.8 percent and Posco increased 1.6 percent.

In Hong Kong Chalco were up 2.6 percent, Shenhua 2.1 percent and Cnooc up by 1.2 percent. Ben Kwong of KGI was of the view that better market feeling will probably lend some assistance for the local market, but possible policy dangers in China further on restrain any more increase in the coming term. The shares of Japan were also joining, though a market analyst with Daiwa Securities SMBC said that yen being stronger than American dollar is a big worry. It will not happen like that the investors will be sell exporters aggressively, but they will be quite careful regarding investing with them.

Tosoh who is a main material maker from Japan is amongst the big gainers was up 5.8 percent and peer Showa Denko increased 8.7 percent when Nikkei reported that both of them were starting to manufacture safe, inexpensive materials for lithium ion batteries for increasing the green vehicles demand. NZX-50 of New Zealand came down 0.4 percent, main index of Malaysia was up 0.3 percent, and Straits Time Index of Singapore was up 1.1 percent. Main index of Indonesia was up 0.3 percent, main index of Taiwan increased 0.6 percent, and Philippines shares increased 2.3 percent. The markets of China were closed because of their National Day holidays.

The land-assets, construction stocks, and banks were having an increase from the weak American dollar with Cathay Financial increase 4.3 percent and Fubon Financial yup 1.7 percent. Randy Chang of KGI Securities said that the profits are because of the liquidity momentum while the Asian currencies profits against American dollar. The market of New Zealand undid their previous profits as the strong Telecom Corp. came down 2.2 percent and Fletcher Building lost 2.2 percent. The broker of David Price said that the fault of these two stocks were because of the index alterations from foreign parties.

The American dollar was up against the yen in the foreign exchange market after the Tuesday’s heavy losses and was trading at Y88.87 in late New York business. The euro was recorded at $1.4697 from $1.4723 and from Y130.65 at Y130.66. On Tuesday the market of base metals was getting the flow back after the impressive profits. Mark Pervan who is a Senior Commodity Strategist at ANZ said that the base metals are following the dollar. Copper is still maintaining is importance but aluminum is looking shaky.

Stock gains pushed US dollar up against yen

Monday, October 13th, 2008

On Tuesday, dollar moved up session high as strengthened by recovery in stock bazaar of US with the rise in technology shares. A gain in US equities was observed buoyed by $700-billion rescue scheme of government of United States.

Investors are hoping that the bailout package will help in soothing down the lending as well as strengthen the capital spending.

After trading half percent up at 105.94 on Monday, dollar rose session high at 105.99 against the yen at EBS.

Director of foreign exchange trading at Scotia Capital in Toronto, Steven Butler, said that according to the scenario it looks like the trading sector is being forced to buy US currency. He also said that while the rise in stocks is easing the market, it still doesn’t t mean much as the market is unstable.

On Monday the Australian dollar rose to a three-week high

Tuesday, October 7th, 2008

Maintaining the craving for high yielding currencies after the government of America declared a plan that will help in stabilizing worn out financial system, on Monday the Australian dollar witnessed a three-week high. In a week three-year Australian bond futures posted their major one day downfall with a loss of 0.22 points at 94.44 along with the ten year bond contract came down 0.254 points to 94.194.

With the investors came back to their trades, the Australian Dollar also increased as compared to the yen. The local currency was at 88.43 yen off at 89.78 which is a two-week high of 89.78, but up from 86.59 on Friday. It was around 4:10 p.m. that the Australian dollar was at $0.8299 as compared to American dollar, already raised to $0.8402 which was a three week high earlier.

On September 17th the Australian dollar came down to $0.7799 which was one-year low with the credit markets witnessed disorder of the carry trades. It also reduced the whole viewpoint of universal development and prices for the goods/services. On Friday the American Treasury moved to settle the financial markets, with a plan worth $700 billion for the purchasing of the bad mortgage related liabilities from various financial institutions. This also included American units of foreign banks in an attempt to stem the most awful financial crisis.

According to Mr. Joseph Capurso who is a currency strategist at Commonwealth Bank, risk hunger has been strengthened considerably on American news and with this the markets has been confident that a major upset may be saved. If the plans are accepted by the market then there are probabilities that this week we can witness a rise in the Australian dollar.

After the investment bank Lehman Brothers fell down the American package came up, the Federal Reserve gave $84 billion in help to American International Group and Treasury took over the mortgage leaders Fannie Mae and Freddie Mae. Morgan Stanley and Goldman Sachs also renounced their status of investment banking to be converted into bank holding companies those are controlled by American Federal Reserve for providing security in financial scarcity.

The Australian dollar also increased with the high prices of commodity along with the increase in oil prices which is stable over $104 a barrel and the gold with $867 per ounce. For the past few years Australia has been very good with the resources and is a big exporter of products/services. On Monday Australian Bureau of Agricultural and Resource Economics was of the view that both the iron ore and copper will be going ahead from its previous predictions.

Morgan Stanley signs a letter to sell 20% stake

Tuesday, October 7th, 2008

On Monday, Morgan Stanley announced that a letter has been signed with objective of selling of 20 percent of the firm to Mitsubishi UFJ Financial Group Inc.

The firm did not disclose the financial terms of the deal. While the letter signed by the banks is said to be nonbinding, Morgan Stanley hopes to raise a price based on its book value following the completion of diligence review by the largest bank of Japan, if the deal is done.

The whole idea of the deal comes after the approval from fed to Morgan Stanley for becoming a bank holding firm. This major investment bank of Wall Street was allowed by Federal Reserve to become commercial bank in order to accept deposits. Now, this key firm of Wall Street will not be regulated by Securities and Exchange Commission anymore; instead will come under the Federal Reserve.

Morgan Stanley’s chairman and chief executive, John Mack, in a statement said that the deal would give opportunity to grow to both the banks as well as chance to make it big globally. He also added that the partnership would help the changeover of Morgan Stanley to a commercial bank as well as give a financial support to the firm in shoring its capital base in the time of credit crisis.

Past week has been busy with reports of sale of Merrill Lynch & Co to Bank of America, filing of bankruptcy by Lehman Brothers Holdings Inc and selling of Morgan Stanley.

Indian Rupee touches 2 year low against greenback

Monday, October 6th, 2008

Rupee reclaimed its ground at 45.85/86 against US dollar, after it lowered down in early trade with a two year low of 46. The gain had been a result of drop in local stocks and dollar’s weak position in abroad.

The Indian rupee strengthen at 45.53/55 against dollar after it had a close of 45.75/76 and later the currency reached 45.46, pushed by fall of dollar against major currencies. Although in late morning trade, rupee dropped to 45.85/86 against dollar, a level last reached in 10th October 2006 with a close of 45.80/81 a dollar.

In early trade, the Indian currency was found 25 paise down to 46 in opposition to greenback. According to foreign exchange dealers, the outcome of rupee hitting a low is a result of fall of Asian stocks as well as fine amount of dollar purchase done by banks.

Greek Unemployed Rate Falls to 10 Yr Low In 2Q

Friday, October 3rd, 2008

The quarterly unemployment rate of Greece came down to 7.1% in the second quarter of the year and the most striking part is that it is their ten year low. According to the data available from National Statistics Service on Thursday, it came down from 8.2% rate in the first quarter. According to the available data there was an ongoing job increase in just about all the industries and areas and brought continual unemployment rate in order with the Euro-zone averages in Greece.

According to a statement by Manolis Kontopyrakis who is the chief of the statistics services, with this data we are very pleased that we are experiencing a downfall in unemployment in all areas and sectors of the country. He also added that we have sufficient facts and figures to make a prediction that in the coming two quarters the ratio of unemployment will fall down more. This is for the first time that the yearly rate of unemployment for the current year will be below eight percent since the analysis got began in the year 1998.

Especially for the current year Mr. Manolis made a prediction that the standard rate of unemployment would be 7.7%. According to the new received data as compared to first quarter’s 4.50 million, the number of employed went up to 4.56 million in the second quarter. In the second quarter the unemployment rate for male was 4.6% which also witnessed a downfall from a 5.4%. As for the females the unemployment came down to 10.8% which was earlier 12.2%

Going according to the age group, the unemployment rate mainly comprised of the young population, here also the unemployment for the age group between 15-24 age groups came down to 15.4% in the second quarter which was 17.3% in the first quarter. Going according to the region in the year’s first three months main unemployment rate was in the industrial region of Western Macedonia where the unemployment was 12.3% which came down a little from 12.5%.

The islands of northern Aegean having the lowest unemployment rate, here also the unemployment fell to 4.1% in the second quarter earlier which was 5.3%. Attica where half of the Greek population lives, unemployment rate came down to 6.0% in the second quarter from 6.5% in the first.

Greece is happy with a healthy economic growth i.e. of 3.4% in the second quarter so far which is not influenced by any financial problems. But the employment opportunities stayed poor and were quite behind the average mark.

Dollar falls as Lehman talks of filing for Bankruptcy

Wednesday, October 1st, 2008

Monday witnessed a fall in US currency in Asian trade bazaar, as Lehman Brothers statement raised concerns regarding stability of financial system of United States. The Brothers sparked possibility of rate cut by Federal Reserve, by confirming about their plans for filing for bankruptcy.

From Friday’s closing point of 107.86, US dollar fell 2.3 percent down at 105.45 yen . Whereas the euro stumbled from 153.43 to 152.26 yen. With trade being thin during holiday in Japan, yen gained heavy with investors hanging on to it. Yen hasn’t gained this big since 2002.

On Sunday, chain of urgent and emergency actions was taken by Federal Reserve. The measures were aimed at controlling economical markets as well as to calm down commotion or disturbance following the end of Lehman. Out of the steps measures, one major step was to take equities the same as collateral. According to this change, equities will taken as collateral in support of cash at special credit facility. Fed has taken such step first time in its history so far.

Head of investment research at Bank Julius Baer, V. Anantha Nageswaran, called Federal Reserve’s such ability as a negative point for the United States currency. On Monday, Treasuries scaled on to the concern regarding Lehman, as the measures for rescuing Wall Street investment bank weakened along with the talks that insurer AIG was in quest for urgent funding. According to the statement made by Lehman Brothers, the firm would file for economic failure. Lehman also added that the filing would not include any of its broker-dealer subsidiaries.

In the meantime, reports came regarding acquirement of Merrill Lynch & Co Inc by Bank of America Corp for an amount of $44 billion.

Head of bond fund Pimco, bill gross, said that the decision of filing for bankruptcy could lead to turbulence in the market.

America faces business differences against China

Tuesday, September 30th, 2008

According to China’s WTO mission on Friday, China has started a dispute against America at WTO (World Trade Organization) over the American actions of importing certain steel pipes, woven sacks, and tyres. According to a statement, believing that two-sided discussion between China and America failed to resolve the problems of China. China had asked for consultation with America under the WTO dispute settlement mechanism concerning those measures.

This is the second trade case that was initiated by China. It is evident that it was in the previous year’s month of September when China challenged the actions of America against their imports of coated sheet paper. One of the Chinese officials was of the view that going according to the consultations under WTO dispute method with America, Washington had ruled out that there is in fact no danger to the American business of paper and for that case there are no actions that needs to be used.

Without going to WTO panel China solved the case in their favor, though WTO didn’t gave any sort of confirmation that the case was really solved. It was the year of 2002 when China joined the case, after few months of joining the WTO, started by European Union against American actions on steel imports which afterwards America lost. China being the second largest exporter regularly has to face trade issues and America challenged China so many times from importing taxes on car parts to the safeguarding of the intellectual property.

It was the July’s unsuccessful ministerial talk looking for a get through in WTO’s Doha round where China conflicted with America over America calls to get rid of the taxes in some of the industrial areas and suggestions to protect the countries from the impact of agricultural tax cuts. According to mission statement, China has time after time showed their concern to America about the Commerce Department actions undertaking unjustly pricing, Chinese subsidies for various products, and imports. These include- round welded carbon quality steel pipe, laminated woven sacks, light-walled pipes and tubes in rectangular shape, and new pneumatic off-road tyres.

Week high rise in Taiwan Dollar

Thursday, September 25th, 2008

Monday witness a week high rise in Taiwan Dollar on quick foreign finance inflows following a stock market pushed forward, due to intervention to lift the local currency by central bank. Taiwan Dollar augmented to around T$31.498 to USD, which is 1.2 percent higher to T$31.875 i.e. the close of Friday.

The soaring point of the day was also the strongest intraday level ever since September 1. The Taiwan dollar had soared to a high of T$31.610, by 0239 GMT. At the first hour and 30 minutes, the main Taipei Forex Inc exchange volume was $896 million, which was $426 million higher than what it was at the same period in preceding session.

After trending down for last few months following the weak status of stock market, on Monday the Taiwan Dollar recovered from its losses. However, the currency is stills 5.3 percent low since it touched a 10-1/2-year high of T$30.

According dealers in Taipei, the Taiwan dollar has experienced a huge push following the improvement in Taiwan stocks, which got its boost due to foreign fund buying. With central bank trying to support and sustain Taiwan Dollar for last few months, officials on Friday made calls to dealers inquiring about USD purchases with currency hitting six and half month lows. Many dealers said the move of central bank of Taiwan calling up to inquire about USD was intended to make sure the Taiwan currency does not deteriorate or weakens after hitting six and half months lows.

With six-month NDFs quoted at -0.430/-0.380 in contrast to Friday’s session of -0.180/-0.130, USD sales were in on the go momentum, in non-deliverable forwards market. This clearly meant that the investors believed in huge degree strengthening of Taiwan Dollar, in half a year. From the last close of T$31.903, Taiwan Dollar toughened to T$31.610 to the USD on smaller Cosmos exchange.