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Archive for the 'Forex' Category

Australian Dollar Slides in Currency Trading

October 27th, 2008 | Category: Forex

Down under currencies in FX tradingThe Australian dollar, along with the New Zealand dollar, is sliding in currency trading on the FX market today. Right now, down under currencies are suffering in FX trading.

As the carry trade unwinds, Aussie and kiwi assets are being sold and the Japanese yen is gaining. Additionally, a global recession means that demand for the commodities that keep down under currencies supported in FX trading is waning.

Bloomberg reports on the situation for the Australian dollar in currency trading:

“Investor confidence is shot to ribbons and it’s the carry trades that are copping it fair and square in the face,” said Paul Milton, chief foreign-exchange dealer at Societe Generale SA in Sydney. “We’re approaching levels where we should start finding some natural support in the Aussie. However, it’s a courageous man who buys Aussie in that environment,” he said referring to the currency by its nickname.

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Original post by Eric J. Fox

Danish Central Bank Gets Swap Line from European Central Bank

October 27th, 2008 | Category: Forex

Denmark attempts to defend the krone against global recessionThe Danish central bank was just barely granted access to a swap line from the European Central Bank. The amount is 12 billion euro. The Danish bank is already taking advantage of a swap credit line worth $15 billion from the U.S. Federal Reserve.

The Danish central bank is making a desperate bid to shore up the krone against recent upheavals in the financial and FX markets, due to an eminent and feared global recession. Indeed, its efforts has led to an interest rate hike at a day when many central banks are going for cuts.

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Original post by Eric J. Fox

U.S. Dollar Rally Continues in Currency Trading

October 27th, 2008 | Category: Forex

Forex trading with the greenbackThe U.S. dollar rally continues in currency trading on the FX market that daylight. Thanks to general weakness overseas, and to worries of an eminent global recession, the dollar is gaining in FX trading on safe haven status.

The U.K. pound and the euro are both dropping in forex trading against the greenback as word of possible rate cuts becomes more pronounced. Additionally, with risk aversion high, investors and traders are fleeing to the U.S. dollar, which is seen as the most stable of currencies — despite the economic problems afflicting the U.S.

It is a measure of how badly the rest of the world is doing when the troubles in the U.S. are seen as manageable and less of a problem than the troubles elsewhere.

The only major currency gaining against the U.S. dollar right now is the Japanese yen.

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Original post by Eric J. Fox

Japanese Yen Gains in Forex Trading as Carry Trades Fall Out of Favor

October 27th, 2008 | Category: Forex

Currency trading with the yenThe Japanese yen is gaining in forex trading on the currency market as carry trades continue to fall out of favor. Carry trades represent leveraged positions, and in that climate of risk aversion, many forex traders are de-leveraging as quickly as possible.

One of the drivers behind the current risk aversion is the fact that a global recession is seen as eminent. With that nag and the instability in the financial markets, it is no surprise that in currency trading the yen is on the rise with unwinding carry trades.

Bloomberg reports on the factors behind the rise of the yen in FX trading:

“These moves are due to extreme risk aversion, and have further legs,” said Lee Hardman, a currency strategist in London at Bank of Tokyo-Mitsubishi Ltd. “The credit bubble has truly burst and we’re seeing panic selling of risky assets that were bought with yen.”

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Original post by Eric J. Fox

The Roots of the Global Financial Crisis

October 24th, 2008 | Category: Forex

A simple explanation of how we got to where we are todayMany humans have been wondering how we got to that point of global financial crisis. I really like that explanation (I confess it: I like the the smiley faces). It does leave some of the factors out (deregulation, derivatives and credit default swaps and the like), but the basics are sound.

And, of course, considering so much of the world relies on the U.S. economy, and so many other banks were invested in some of our poor assets, the whole thing spread…

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Original post by Eric J. Fox

Japanese Yen Continues to Batter U.S. Dollar in Forex Trading

October 24th, 2008 | Category: Forex

Currency trading with the Japanese yenRight now, even though the U.S. dollar seems unstoppable in forex trading against the commodity currencies, the euro and the pound, it is struggling against the Japanese yen.

In currency trading, the yen continues to pummel former high yielders like the euro and the greenback, which keeps on cutting interest rates. Indeed, the Fed is expected to cut interest rates again in the relatively near futures.

This move, meant to give a boost to the ailing economy, will likely serve to further strengthen the yen against the U.S. dollar in forex trading.

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Original post by Eric J. Fox

Retail Sales Bring U.K. Pound Lower in Forex Trading

October 24th, 2008 | Category: Forex

Sterling at five year lows in currency tradingThe sterling is at five year lows in currency trading on the FX market today. Retail sales figures have just been released, and they are showing that consumers are not spending as much as they have been.

Indeed, that is another sign that the British economy is headed for a recession. (Or is in one already.) The U.K. pound is likely to continue to struggle in forex trading for the foreseeable future as the government does its best to shore up the banks and stimulate the economy.

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Original post by Eric J. Fox

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