Forex Automoney

It is becoming increasingly easier to pick a winner in the Forex market – and when I mean easier I mean, short the US Dollar.

The US Dollar dropped to its lowest point in a year against a basket of currencies on Tuesday after broad gains stocks brought a return of risk appetite.  Trading volume was markedly higher as investors returned from their vacations and began to assess the happenings of recent weeks.

The Dollars fall was also sparked by the rise in commodity prices such as gold which traded above $1000 for the first time since February.  Concerns over the USD’s status as the reserve currency were also a factor as a report by the United Nations which called for a new World Reserve System diminished the demand for the Dollar.

 at 11:15PM GMT, the Us Dollar was trading down 1.14% to the Euro to 1.4494, down 1% to the Japanese Yen to 92.23, down 1% to the Sterling to 1.6494, up .07% to the Canadian Dollar to 1.0785, down .8% to the Australian Dollar to .8622, down .5% to the New Zealand Dollar to .6959 and down 1.4% to the Swiss Franc to 1.0463 

The US Dollar dropped to its lowest point in a year against a basket of currencies on Tuesday after broad gains stocks brought a return of risk appetite.  Trading volume was markedly higher as investors returned from their vacations and began to assess the happenings of recent weeks.

The Dollars fall was also sparked by the rise in commodity prices such as gold which traded above $1000 for the first time since February.  Concerns over the USD’s status as the reserve currency were also a factor as a report by the United Nations which called for a new World Reserve System diminished the demand for the Dollar.

At 11:15PM GMT, the Us Dollar was trading down 1.14% to the Euro to 1.4494, down 1% to the Japanese Yen to 92.23, down 1% to the Sterling to 1.6494, up .07% to the Canadian Dollar to 1.0785, down .8% to the Australian Dollar to .8622, down .5% to the New Zealand Dollar to .6959 and down 1.4% to the Swiss Franc to 1.0463

The Australian Dollar has been stellar in the past few months, and I have made no secret of my love for this currency. But, it is the US Dollar that has now caught my eye as the most lucrative trade, whichever currency it is paired up with, if you happen to be on the short side of things you have been doing quite well.  Even against the pathetic Sterling the Dollar has been losing and I do not foresee this changing anytime soon.

One reason for this is the new development out of the United Nations, which openly called for a “new World Reserve” currency system – a new world order of things if you will.  Now, keep in mind the UN has not been a fan of the US for some time now, despite the US paying most of its bills and being a staunch supporter of most of its social programs such as UNESCO and UNICEF.  The world hates the top dog and if it were not for the veto power the US holds, I know there would be much more open criticism and dare I say, sanctions, against the world’s largest economy. 

But the announcement from the UN comes on the heels of President Obama deciding that he will be the first sitting US president to chair the all powerful (I am being cynical here) Security Council.  In a gesture meant to help bridge the gap between the impression the world has on the “stuck-up” and “maverick” United States, the President wants to approach the world stage with an open hand and show that we can all work together.  Now, I will bet that this move has less to do with nuclear proliferation than it does the UN’s call yesterday – but I am not qualified to make such an accusation.

In the online Forex marketplace we have seen the Dollar start its collapse.  China, which had kept mum on its concerns over the Dollar for a few months, is also back into the picture.  Speculation is that their $2 Trillion Dollars in USD reserves is being liquidated quietly and relocated to gold – which would explain the sudden increase in the shiny commodity.  Aside from this, they are also becoming vocal once more, sending a top Communist party official to the media using words like “dismayed” to describe how they feel about the US’s free use of the Treasury printing presses to cover their bills. 

Cheng Siwei, a top leader in China told the UK’s Daily Telegraph that Beijing was being compelled to redesign its foreign currency reserve policy.  No doubt this is having a grave affect on the USD  and it is the reason why I believe that no matter what the data shows about a recovery, the USD is destined for a downward trend in the coming few months.  China does not do things half assed, and you can bet that this is not the last we will hear about discontent from the US’s largest lender.  The season is ripe for a controversy – its September, and historically it has not been a good month for the USD – my bet is that this will be one of the worst on record.  Sit back and short – you won’t be sorry you did.

written by admin \\ tags: Australian Dollar, Canadian Dollar, Commodity Prices, Currencies, Euro, Forex Market, Forex Trading, Gold, Investors, Japanese Yen, Loser, New Zealand Dollar, Reserve Currency, Risk Appetite, Sterling, Stocks, Swiss Franc, United Nations, Us Dollar, Vacations

There was an article published in the UK Independent by a fairly credible journalist claiming that there were “secret meetings” taking place between Arab Nations and the BRIC countries to end the US dollar’s reign as the world’s reserve currency by agreeing to trade oil in anything but the dollar.

As a result of this speculation, the US dollar is down and gold is up pretty big today (+2.53%).  The talk is that they are looking to establish a basket of world currencies plus gold as payment for oil.  While foreign dis-satisfaction with the devaluation of the US dollar is nothing new, should these nations pull this off it could have serious repercussions for the US dollar.

Now I don’t want to speculate what would happen if this were to be true, but this appears at least on the surface to really put pressure on Helicopter Ben and the Fed to do something about the falling dollar.  But at this point it doesn’t look like that’s going to happen.

Until global account balances come back into more of a balance, expect this to be nothing more than rhetoric as foreign nations like China and Japan (who have major dollar reserves) have way too much to lose should the US dollar decline further due to losing its reserve status.

In the end, something has to give.  This global game of chicken will not end well if we stay on the same course.  The question is, who is going to swerve first???

Regardless of what happens, it is now more than ever so important that you have an understanding of what goes on in world politics and currency markets.  To learn about it, click here.

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written by admin \\ tags: Arab Nations, Bric Countries, China, Currency Markets, Devaluation, Global Account, Global Game, Gold, Helicopter, Japan, Journalist, Repercussions, Reserve Currency, Rhetoric, Satisfaction, Secret Meetings, Speculation, Us Dollar Decline, World Currencies, World Politics

Currency exchange has a long history, from the ancient Middle East and the Middle Ages, when trade began, according to the form of bills ready for international banks, which are transferable to a third party payments that allowed flexibility and growth in the exchange relationship.

The modern foreign exchange market is characterized by periods of high volatility (which is a frequency and magnitude of a change in the price) and the relative stability in the twentieth century format. In the mid-1930s, the British capital London, the currency and the pound sterling and the currency exchange was used to as a reserve currency. As in the old days when the exchange is at the telex or cable, the pound is the nickname of “cable”.

After the Second World War, when the British economy was destroyed, and the United States the only country free from war, the U.S. dollar, according to the Bretton Woods agreements, between the United States, Britain and France (1944) was the reserve currency for the capitalist countries and all currencies with U.S. dollar (through the creation of set pieces varies from banks upgraded power of the countries affected by actions or purchase of foreign currency). In return, the dollar was tied to gold at $ 35 per ounce. Therefore, the dollar as a reserve currency in the world. Under the same agreement, the International Monetary Fund (IMF) and significant financial support for developing and former socialist countries achieve the economic transformation.

To achieve these objectives, the IMF uses such instruments as Reserve trenches, which is a member to take their share of the booking with the time of payment, drawings and the trenches of Credit Status -by agreements. The letters are the form of the difference in the form of loans from the IMF compensatory financing extended financial assistance to countries with temporary problems generated by reductions in export earnings, the reservation of a funding mechanism will help ensure that the population density in commodities, the price stability in a product and the development of structures to support the financial problems in amounts or for a period longer than the circumference of the other plants.

In the late 70-s to the free floating of currencies was officially mandated that the most important milestone in the history of financial markets during the twentieth century lead to the formation of Forex related with the understanding. What is that money can per person and its value depends on the current strength of demand and supply in the market, not the points of the action that must be met. Rate the band has changed since the currencies were allowed to float freely with each other. While sales in the year 1977, every day at 5 million to 600 million U.S. dollars in 1987, came to U.S. $ 1 trillion mark in September 1992 and stabilized at about 1, 5 billion for 2000.

behind this dramatic growth in the volume are listed below. An important role in the possession of the increased volatility of currencies, more and more influence of the individual banks, the rates adopted by central banks, mainly on the exchange rate, increased competition in the housing market and in the same time, the concentration of companies from different countries, the technological revolution in the field of foreign exchange. The last presentation in the development of automated systems and the transition to the currency trading over the Internet. In addition to conventional systems, matching systems simultaneously connect all traders around the world, electronically reproduce the broker market.

The development of technology, software and telecommunications experience and have the level of refinement operators, their ability to create and manage the foreign exchange risk. Therefore, the refinement of the trade led to an increase of the scale.

written by admin \\ tags: Bretton Woods, British Economy, Capitalist Countries, Currency Exchange, Economic Transformation, Export Earnings, Foreign Currency, Foreign Exchange Market, International Banks, International Monetary Fund, International Monetary Fund Imf, Market Currency, Mid 1930s, Party Payments, Pound Sterling, Relative Stability, Reserve Currency, Reserve Trenches, Second World War, Socialist Countries