Recovery Signals Boost Dollar Decline

The US currency ended up trades with a slide as the US economy showed first signals of recovery after the global recession. Today the US government is set to release its figures of GDP expected to decline at a slower pace in 2Q than in 1Q. Global corporate earning reports added to optimism. Participants of Forex market took advantage of the fresh optimism to choose higher-yielding currencies, such as the Euro and Aussie.

Yesterday Germany and the Euro-Zone issued better than expected reports on unemployment and consumer confidence bringing USD decline against EUR reaching 1.4128 level. The markets also witnessed the USD fall versus GBP as British consumer confidence showed optimistic results.

It is expected that today traders will go on trading with yesterday`s optimism. This behavior is expected to drive lower the USD index.

Dollar Continues Strengthening

The US currency continues gaining versus its main counterparts. Yesterday it came close to its 2 week high against the Euro. It also rose against the Pound and Yen.

The reason of such appreciation is a better than expected Core Durable Goods Orders monthly report accompanied by China`s statements that it will keep on maintaining loose monetary policy. It seems that investors were impressed by the 1.1% rise in the Core Orders during June. The difference between the two reports is that the Core report measures the change in the total value of new purchases orders placed with manufacturers for durable goods, excluding transportation items. Orders for aircraft are known to be very volatile, and thus have the potential to distort the underlying trend.

Traders usually tend to pay more importance to the Core report as purchases orders placed with manufacturers for durable goods such as orders for aircraft are known to be very volatile. This report shows signs of positive growth, for the third straight month making investors believe that the global recession is coming to the end.

Among today`s news in economic calendar the main release from the U.S economy looks to be the weekly Unemployment Claims report at 12:30 GMT. Currently, while all the major economic indicators of the U.S economy are showing signs of recovery, it is only the job sector which goes on producing negative results.

Explosions in Spain provoke Euro’s fall.

The attempt committed today in Burgos (Spain) has caused 46 injured men and 38 of them have been moved to sanitary centers of this Spanish city. It is most likely that there is no threat to their lives. People just have small courts and wounds.
According to the investigation, the responsibility of this act is to ETA.

The explosion took place in the back part of a house barracks of the Civil Guard, located in the suburbs of Burgos, in particular in Jerez street.

The deflagration damaged the paving and some neighboring houses.
The cameras of supervision marked that the source of the explosion was a car that parked on the Jerez Street.
The area is still surrounded, while the investigation continues and medical services try to help to affected.
These events influenced on Euro positions on Forex market. In the morning, in Asia people begun to sell Euro and Euro dropped relatively to JPY.People connected with Forex trading guess that Euro sales will be short-term ones, but today’s positions for Euro will be weak because of pre-planned purchase of obligations.

Rising Star for AUD

Now, AUD reached its highest position relatively to USD. 1 Aussie cost 83.22 U.S. cents and it is expected that forex trading will bring AUD to its 2009 high.

Aussie’s rise relatively to USD was provoked by the optimistic declaration of Glenn Stevens from Reserve Bank of Australia that Australian economy was recovering faster than economists supposed, has provoked Besides, RBA representative marked that home prices should go up because of the fact that interest rates are low. In their turn, interest rates fell to 3 % because of suspicions that RBA could reverse its monetary policy.

But, it is necessary to notice that at the moment dollar positions on forex market went down not only against the Aussie. Dollar became weaker in comparison with the most part of other major currencies. For example, now people buy 94.87 yen for one dollar, and at the beginning of the week it was 95.26.

The index of American currency fell from 78.684 to 78.451.
As for EUR, now one EUR costs 1.4277 dollars (it rose from 1.4235). Pound costs $1.6533 ($1.649).

Dollar Outlook Suffers from Concerns over U.S Monetary Policy

July 22, the US Dollar as well as other risk sensitive currencies dropped further against the Euro. However, unsteady equity markets brought risk aversion in forex trades. The Dollar trend is still bearish, as the EUR seems unable to perform a real jump. On Wednesday, the Dollar index was traded at 78.745, down from 78.920 on Tuesday

Pressure on the Dollar is put downwards, as strong performances from the stock markets goes on, as investors shift to riskier higher profiting assets. With rising uncertainty sentiment about the framework of the US monetary and fiscal policies, particularly in light of newly designed health care reform, the outlook on the Dollar looks very weak despite the Fed's and Treasury's guarantees.

Among toady`s important economic events are expected from the U.S, including the Unemployment Claims at 12:30 GMT and the Existing Home Sales at 14:00 GMT. These indicators are very important since they are leading indicators of economic state and are supposed to create great market volatility.

Wall Street Rally Brings Dollar Decline

The US currency reached its month low against its major counterparts such as the Euro, as Wall Street rallied on Monday. CIT managers approved a $3 billion rescue package resulting into a strong rally in the stock market.
Risk appetite of traders was increased due to continued optimism from the financial reports of the banks for 2Q. U.S. housing data issued yesterday suggests stabilization of the U.S. housing sector.
The Dollar Index hit 78.799 on Monday, the lowest level since the 3rd of June. The greenback declined against the JPY by over 70 pips to 93.92, because traders left the dollar for higher profitable assets. The GBP/USD rose by 120 pips to 1.6518, as the GBP acted positively to the optimism in the banking sector. The EUR/USD closed nearly 60 pips higher at 1.4214. There are some grounds to assume that probable rise in equity prices would bring further dollar depreciation.
As for today, some important releases are to be issued both in the USA and Canada. Canada is set to publish both the BOC Rate Statement and Overnight Rate at 13:00 GMT. The results of these are set to determine the USD/CAD rate in the coming week. At 14:00 GMT, U.S. Federal Reserve Chairman Ben Bernanke will testify before the Financial Services Committee in Washington, DC. This is important for further U.S. monetary policy. The forex market is expected to experience heavy volatility.

Dollar Declines as Negative Economic Data Released

Thursday in forex market the US Dollar declined against its counterparts, as EUR/USD hit its high of 1.4150 level. The greenback depreciated against British pound and Japanese Yen.The reason of such a decline appeared to be the Long-Term Purchases report issued yesterday by US Treasury International Capital. This report includes the difference in foreign long-term securities purchased by USA citizens and U.S long-term securities purchased by foreigners. This time the figures appeared to negative as the balance is $19.8 billion. According to the released data Chinese investors are currently holding $800 billion US securities. The huge debt has raised concerns that it might have the potential to pull down the value Dollar in the long term outlook.

The Philadelphia Manufacturing Index, used to measure the economic conditions in the Federal Reserve district, was issued. The index reached a -7.5 mark, which means that the factory activity in the district has declined for the 10th consecutive month in July. According to forex analyses this report has boosted the greenback for further downfall.

RBC Introduces New Practice Accounts

RBC Direct Investing has just released its introducing practice accounts for currently existing customers.The practice newly created accounts starts with the amount of $100,000 of which can be reset anytime. Even more practice money can be transferred to set a new level that to practice Forex strategy.
The account is integrated into the real online site so all the tools and learning resources with which clients are familiar are still at their disposal. A practice mode is characterized by the colour scheme of the web page and a message with an icon of a printed open book appears.
RBC is also adding new content and a new interface to the regular site. According to Jason Storsley RBC Direct president, the main aim is to help investors sharpen their skills.

J&J in Focus To Report Lower 2Q Earnings

Forex currency market will review data docket to follow risk trends in Europe, with 2Q earnings reports from Johnson & Johnson. Overall, risk sentiment is likely to prevail once again in European forex trading hours. 2Q earnings announcements of Johnson & Johnson are likely to be of particular importance for traders. Indeed, forex markets largely oscillated in overnight trading despite significant gains across Asian stock markets with the upswing in confidence already priced in during US hours.
The company will probably prove particularly downside market-moving.
Today Johnson & Johnson (J&J) health-care corporation is expected to report lower 2Q profit. Tuesday, as a result the recent loss of market exclusivity for its popular Topamax drug and the company slowed sale volume of consumer products. Based in New Jersey J&J corporation, listed in the Dow Jones Industrial Average, is likely to report earnings of $1.11 a share, $0.15 down from the earned in the three months ended June 30, 2008.
According to forecasts quarterly revenue may be flat on a year-over-year basis, at $15 billion

Todd Gordon Issues “Forex Trading Using Fibonacci & Elliott Wave”

A famous forex analyst issued a DVD release of his book revealing major problems connected with forex trading. From this perspective, Todd Gordon’s training DVD can be of much use. You might read any forex trading book, yet the practice of an experienced trader such as Todd Gordon may really help. And as any respected trader, he has developed a system based on the Fibonacci & Elliott wave.

The idea behind is quite simple – trade on pairs of currencies based on certain patterns. As most of the technical analysis, it relies on the recent events to forecast future. The difference of the technique illustrated on the DVD’s is that it also tests the past models on real-time data – thus allowing to mark profits on a relatively secure time.The difference between the successful investor and the average one is the knowledge on the main features of the market. Todd Gordon made a good work on sharing the audience with his experience.

Wednesday Business Events Review

Wednesday the US dollar continued strengthening its positions against European counterparts as currency traders were unlikely to risk. Investors` positions also helped Japanese yen to contest against the major forex currencies, as it remains one of the main reserve currencies.
Yesterday attention of currency market participants was drawn to Italy, home of another G8 economic summit. Chinese delegation headed by Hu Jintao had to quit the summit due to continuing disorder in some regions of Peoples Republic of China. Investors were not encouraged by such a fact as a result traders were not seen to risk that day.
The general sense of the first statements of summit participants is summed up as economic outlook remains mixed as serious risks cannot be ruled out. These statements gave grounds for further forex quotes decline and sharp oil price fall. As a result EUR/USD ended the session reaching 1,3885 level, GDP/USD traded 1,6070.
Thursday the most expected event in economic calendar is considered to be the decision of Bank of England on its benchmark Repo rate. It is expected to remain at the same level of 0,5 percent. Besides, market players should focus on UK international trade balance sheet, which is assumed to perform positive dynamics comparing with the previous period.

Alcoa 2Q Report

Thursday American indexes started trades with decline and fall continued throughout the whole session, sales encompassed the whole stock. USA started its corporate report period for 2Q and the first company to issue a report traditionally is Alcoa and this report is expected to be one of major economic events for this Week. Both stock and currency markets are likely to respond positively to this report. Yesterday Alcoa`s stock gained a little bit marking a rare exception. Alcoa Inc., which is expected to report a quarterly loss Wednesday amid a slump in global aluminum demand, is positioning itself for an new economic rebound by investing in markets it thinks are ripest for recovery.
The largest U.S. Aluminum company has done a $750 million expansion of a construction factory in Russian Federation. This will allow it to produce beverage cans for the European market. The company recently bought a small Morocco fasteners business that supplies European aerospace customers.
Klaus Kleinfeld, Alcoa's chief executive, said on Tuesday that he observes recovery signals in some sectors, including the aluminum market. In Russian Capital, where he was traveling with U.S. President Barack Obama, Mr. Kleinfeld said the North American automotive market is on the way of reviving.
Alcoa is the world leader in the production and management aluminum, fabricated aluminum and alumina combined, through its active and growing participation in all major aspects of the industry. Alcoa`s production is used in aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design and engineering.

No Change for Australia Cash Rate

The major economic event for today is RBA`s meeting and announced decision on its interest rate. The Reserve Bank of Australia (RBA) left its key cash rate at a record low of 3.0 percent and also noted that the domestic economy was not as weak as expected just a few months ago and saw first signals of stabilization in Australia`s economy.

For a third straight month the RBA did not change the interest rate level. The RBA has maintained official interest rates at the lowest point for 49-year period of 3 percent, amid signals that the world economy is stabilizing and that Australia`s inflation will continue to decline. According to Glenn Stevens, RBA governor, the board's current view is that the outlook for inflation allows some scope for further easing of monetary policy.

According to many market analyses prior the RBA meeting the rate was to remain at the same point till the end of 2009.

Preventing Bias in Forex Trading System

In many cases, forex traders or retail traders are looking for a forex trading system which would help them to take decisions, control risk and make certain profits. Traders from all over the world cope up with such successes and struggles, in all currency markets. A trading system is usually defined as a series of methods implying expectations, position sizes, entries into the market and exits. It is not difficult to construct a forex trading system.
Testing and implementation are not easy to comprehend. Achieving success always requires proper forex education. For forex traders, attribution bias and over optimization are related to one another. Over optimization is initially, a practice of fitting the past data into a model. The problem appears when forex traders begin back-testing the system, and then, start amending the parameters of the system until the past results reaches the maximum value. There is a manual for trading system which will make you realize how the forex markets operate and it also covers the rules for forex trading.

Stock Market Has Hit Its High in 2009

According to Glenn Neely, the founder of Neowave global market will drop 50% in Next 6 months Glenn Neely, prominent Elliott Wave analyst, made a new announcement of an unexpected prediction: The S&P 500 has formed a major top in June, which will be followed by a large decline, eventually pushing the stock market to lows for last ten years. As Mr. Neely comments the situation, last October's bottom brought a new correction; the March-June rally is the final leg of that correction. "The March-June rally is ended, allowing the bear market to resume. During the next six months, the S&P will decline 50% or more, breaking well below 500 points. Currently, the S&P is steaks to 917 level. Glenn Neely stated this information not as a specific trade recommendation but as a general public service announcement. A founder of Neowave, Neely was recently recognized in Timer Digest's May issue as the #1 stock market analyst for the past 12 months.

NZB Funding Costs and Margins

On Monday the Reserve Bank of New Zealand announced an analysis of interest rate margins. Alan Bollard, Reserve Bank Governor stated, that the bank released this analysis to respond to a number of issues received regarding the stance on what room there still is for interest rate swaps. The paper notes the Reserve Bank is continuing to talk to the banks to clarify new trends in their funding costs and margins. The Bank Governor promised to review these matters further in the Bank's Financial Stability Report that is expected to be issued November 2009.

Latest Forex Market Update

Late Thursday the euro continued its sharp decline against other major currencies after the release June U.S. Payrolls report, which sent forex traders out risky assets.

The euro was at Y134.55 from Y136.76. In New York, the euro traded at $1.4017 from $1.4147 late Wednesday. The dollar was at Y96.01 from Y96.67. The U.K. Pound traded at $1.6352 from $1.6252, and the U.S. Dollar was at CHF1.0851 from CHF1.0748. Later the day, the bad U.S. Non-Farm Payroll report influenced negatively stock markets, bringing the dollar to new daily top against the other major forex currencies. In the U.S.A. stocks and futures for crude oil declined, moving euro below $1.40 level. It also reached its two-session low of Y134.47. The EUR/USD pair continues to be contained in a range although a sharp decline below 1.4000 would give scope to an test and break of 1.3750.

The GBP/USD pair remains 1.6230 and the USD/JPY pivot 93.50. Sideway forex market strategy is seen again for forex currencies bringing another period of economic uncertainty.

View the complete latest development of forex major pairs on the website.

Wednesday Market Update

On Wednesday at the European market close in London the FTSE hit 1.89 per cent. Frankfurt's Dax and the Paris CAC 40 also made gains up to 2.51 per cent. Wall Street revived as well as foreign exchange markets on Wednesday as S&P- 500 performed record quarter high since 1998. European stock markets started to rise at midday on July the 1-st with commodities gaining. Encouraging reports on China manufacturing, Europe and the US added to optimism that the worst stage of the global recession is over with the decline slowing. M&S reported its smallest decline per quarter in two years.

Commerzbank AG gained 20 per cent after Morgan Stanley`s statement on an agreement by German politicians on a new plan may spur the rise of shares.

Forex Trading Robots. Estimate Profitability

Nowadays Forex trading software has been developed to more complicated instruments such as Forex trading robots. Many proficient traders want to test this way of trading and find out how it useful cam it become in the Forex market.

Many of these programs have convincing presentations and nice performance records, but you need to be knowledgeable about about any particular Forex trading software. In most cases these robots have not traded with hard currencies. It doesn't mean that these Forex trading software systems are swindlers and cheaters. Some of these robots have profitability records for several years and have been tested during actual trading. To guess which one of these particular trading robots can bring advantage is to get the software and try it out.

The forex trading robots become useful to employ proven trading strategies. Since robots respond to the program and commands of its owner, forex trading robots will do the trading automatically for you, using the tested trading strategies which you can remember.

Australia's Manufacturing Decline Slows

Australia's manufacturing contraction slowed in June as the lowest interest rates in 49 years and government policy encouragedapeeared to boost domestic demand. The performance of manufacturing index rose 0.9 points from May to 38.4, marking the highest point in eight months. A reading below 50 shows that manufacturing is shrinking. The central bank has reduced the key interest rate by a record 4.25 percentage points since September to 3 percent. Australia together with India and China were the only countries among major economies that performed rise in the first quarter. Australia's survey asked more than 200 producing companies about production, new orders, deliveries, inventories and employment. According to this survey, manufacturing, which consists 10 percent of the economy, shrank for a 13th consecutive month in June.

German Unemployment Rose in June

The number of unemployed people in the first European economy reached 3.495 million on a seasonally adjusted basis, a rise of 31,000 on May's number, official figures showed.
However, many economy analysts forecasted a bigger rise of about 45,000. According to the Federal Labour Office the jobless rate rose to 8.3% from 8.2% in May.

On an unadjusted basis, unemployment fell by 48,000 from the previous month.
Timo Klein from Global Insight comments the situation: "Employment has generally not fallen quite as fast as unemployment has been increasing, as firms aim to hold onto their existing workforce wherever possible."

As Germany prepares for general elections in September the data about unemployment rate had caused speculation prior to their release. These figures influenced European stock and currency markets. Experts continue warning that unemployment figures could top 4.1 million by the end of 2009, if the German economy follows predictions and contracts by more than 6 percent this year. There are global concerns that the economic crisis can become deeper as a jobs crisis by year's end.

European Market News

Consumer confidence in the US weaker than expected influenced European markets late Tuesday. That rattled the banks stocks. Deutsche Bank, HSBC and Societe Generale were down between 1.5 and 2.5 percent.

Due to sharp price rise for precious metals the quotes of mining enterprises inclined. Oil prices also took a more than 3 percent tumble, bringing energy shares down. Currency market was influenced by money flows related to the end of month and quarter. In Frankfurt USD/EUR trades ended at the level of 1.4016.