Posts Tagged ‘eurusd’

QE3 will work, but not for long

September 6, 2011 by · Leave a Comment
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(As written for My Paper on 6 September 2011. Click here to enlarge)

The Non-Farm Payrolls (NFP) report on Friday was ugly and totally unexpected.

The median forecast of 86 economists called for an addition of 68,000 jobs. However, after the announcement by the US Labour Department, everyone was caught off-guard when the result showed a big fat zero.

This was the weakest reading since September 2010, and meant that that the US economy failed to add any jobs in the month of August. The unemployment rate stayed at 9.1 percent.

To make matters worse, July payrolls were revised down from 117K to 85K, which meant that the hiring was smaller than initially reported.

As I read more into the report, I came across another interesting point. Read more…

Money Matters

September 1, 2011 by · 2 Comments
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(As featured in The Sun, Malaysia’s national newspaper, on 26 Aug 2011. Click here to enlarge)

Education alone won’t ensure a successful venture into online Forex trading

It is hard not to be in awe in the presence of Mario Singh, a Forex trading guru and founder of FX1 Academy Pte Ltd. Decisive in his words and pragmatic in his views, Mario has created a set of philosophies that is said to have been successful in guiding 20,000 people financially. Or so he says.

“FX1 is currently providing education on online Forex trading to approximately 20,000 people the world over,” says Mario.

“The largest transfer to wealth is happening now. Over the last year, nine Asian countries have raised interest rates. The list included Malaysia, Singapore, India, China, Taiwan, South Korea, and Indonesia,” he says, adding that he hopes to help some one million people become millionaires through Forex trading over the next 10 years. Read more…

Updates from Jackson Hole Meeting

August 30, 2011 by · Leave a Comment
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Over the weekend, Singapore voted in its next President, with Dr Tony Tan pipping Dr Tan Cheng Bock to the finish line by a mere 0.35% of the popular vote.

In the Forex Market, a different election of sorts was happening, with the primary candidate being the current Federal Reserve Chariman, Ben Bernanke.

Many traders were betting on the fact that Bernanke would announce more easing, or QE3 during his meeting with other central bankers at Jackson Hole, Wyoming. The US dollar initially nose-dived against several majors in anticipation of the announcement, but recovered quickly as Bernanke stopped short of revealing any concrete measures.

However, in a dramatic turn, the US dollar weakened again as the markets came to a close when traders realised that QE3 was probably going to happen. Not now, just later.

The clue came from Bernanke’s surprise announcement that the next Fed meeting on 20 Sept will be for two days instead of one. Read more…

USD’s safe-haven status saves it from crashing

August 23, 2011 by · 2 Comments
Filed under: my paper, Trade Call 
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(As written for My Paper on 23 August 2011. Click here to enlarge)

Close to 8 trillion US dollars has been wiped off global equity markets since the S&P downgraded the US debt less than a month ago. Suffice to say, every trader would take this as a cue that the US dollar is weakening.

In the currency maket, the scenarios are played out slightly differently. Since we are always looking at currency pairs, we need to understand how one currency moves against another.

Interestingly enough, in the 2 weeks right after the S&P downgrade, the US dollar weakened against currencies like the Japanese Yen (JPY) and the Swiss Franc (CHF), but actually strengthened against the Aussie (AUD), Kiwi (NZD) and the Loonie (CAD).

Why is that? Read more…

Strong Yen, Franc and Bank Intervention

August 16, 2011 by · 4 Comments
Filed under: my paper, Trade Call 
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(As written for My Paper on 15 August 2011. Click here to enlarge)

Every trader knows the importance of trading with the trend.

However, there is one indomitable force in the Forex Market that can temporarily over-ride the theory of trend. That force is known as Central Bank Intervention (CBI).

CBI occurs when central banks think that their currency is either trading too high or too low against a basket of major currencies. They then intervene forcefully by either buying or selling their own currency to bring rates to their desired levels.

Over the last two weeks, two central banks in particular, have signaled their intentions more than the rest: Japan and Switzerland. Read more…

Relief in US but all eyes now on S&P

August 2, 2011 by · 6 Comments
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(As written for My Paper on 2 August 2011. Click here to enlarge)

I was in Kuala Lumpur last week to speak in the International Rubber Conference 2011. Part of my message centered on how the US would increase its debt ceiling before the dreaded deadline of 2nd August.

The whole of last week had the world riveted on the U.S. because it seemed that U.S. policymakers were caught in a deadlock, with no credible plan in sight. This was primarily because the Republicans had insisted on deep spending cuts before they would consider raising the USD14.3 trillion limit on U.S. borrowing.

Yesterday however, the markets heaved a sigh of relief when the US finally revealed that an agreement had been reached. “The leaders of both parties in both chambers have reached an agreement that will reduce the deficit and avoid default,” President Obama said at the White House. Read more…

Strong Yen hurting Japanese big names

July 26, 2011 by · 2 Comments
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(As written for My Paper on 26 July 2011. Click here to enlarge)

Japanese exporters are starting to feel the heat again.

With the Yen near its all-time highs, big names like Toyota, Sony and Nissan are frustrated that corporate profits are hurt due to the Yen strength.

As the world’s 4th largest exporter, Japan thrives on a weak Yen to aid export sales.

Early this week, the USD/JPY fell to 78.13, the lowest in 4 months.

According to the Bank of Japan’s Tankan Survey, that rate is now more than 4 Yen below the rate on which big manufacturers have based their earnings forecasts for the current fiscal year. Read more…

Greek default the focus at Brussels

July 19, 2011 by · 2 Comments
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(As written for My Paper on 19 July 2011. Click here to enlarge)

Government leaders in Europe will meet this week in Brussels to discuss the debt crisis again.

One of the key discussions would inevitably be the consequences of a Greek default.
Last Friday, credit-default swaps protecting Greek debt from losses for five years came in at 2,415.07.

According to Bloomberg data, that price signals an 88% chance of default. Read more…

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