USD again weakening, USDCHF again focusing at parity. AUDUSD likewise? | | |
Forex in very tight ranges yesterday (Memorial Day)...
| | Overnight News Bullets - SW Trade Balance (Apr) out at 11.8B vs. 12.5B prior.
- JN Corp Service Price YoY (Apr) out at 0.5% vs. 0.6% expected.
- NZ Business Confidence (May) out at -49.7 vs. -54.8 prior.
- NZ RBNZ 2yr Inflation Expectation (2Q) out at 2.9%.
- GE GDP s.a. QoQ (1QF) out at 1.5% as expected.
- GE GDP wda YoY (1QF) out at 2.6% as expected.
- GE nsa YoY (1QF) out at 1.8% as expected.
- GE Private Consumption (1QF) out at 0.3% vs. 0.40% expected.
- GE Government Spending (1QF) out at 1.3% vs. 0.40% expected.
- GE Capital Investment (1QF) out at 3.7% vs. 2.0% expected.
- GE Construction Investment (1QF) out at 4.5% vs. 6.30% expected.
- GE Domestic Demand (1QF) out at 1.9% vs. 2.20% expected.
- GE Imports (1QF) out at 3.5% as expected.
- GE Exports (1QF) out at 2.4% vs. 2.20% expected.
O/N Data Heat map: | EU | US | JP | UK | SZ | AU | CA | NZ | NO | SE | FR | | | | | | | | | | | - | |
Calendar Today's Highlights: | Time (GMT) | Region | Release | Consensus | | 06:15 | SZ | Trade Balance (Apr) | 1.25B (Prior) | | 07:15 | SW | Manufacturing Confidence (May) | 1 | | 07:15 | SW | Consumer Confidence (May) | 0.0 | | 07:30 | SW | PPI MoM/YoY (Apr) | 0.5%/2.9% | | 08:30 | UK | BBA Loans for House Purchase (Apr) | 35417 (Prior) | | 13:00 | US | S&P/CS Composite-20 YoY (Mar) | -14.2% | | 14:00 | US | Consumer Confidence (May) | 60.0 | | 14:00 | US | Richmond Fed Manufact. Index | 1 | | 14:00 | US | New Home Sales (Apr) | 523K | | 14:00 | US | New Home Sales MoM (Apr) | -0.6% | | 21:00 | US | ABC Consumer Confidence (May 25) | -49 | This and Next Week’s Highlights: | Date | Region | Release | | May 28 | SW | Retail Sales | | May 28 | E-Z | Euro-Zone Current Account | | May 28 | US | Durable Goods Orders, | | May 28 | NO | Norwegian Deposit Rates | | May 28 | GE | CPI Figures | | May 28 | JN | Large Retailers’ Sale, Retail Trade | | May 29 | UK | Nat’wide House Prices | | May 29 | SZ | Employment Level | | May 29 | GE | Unemployment Rate | | May 29 | NO | Unemployment Rate, Retail Sales | | May 29 | E-Z | A string of Confidence Figures | | May 29 | US | GDP, Core PCE, Personal Consumption, Intial Jobless Claims, Continuing Claims, DOE/API Inventories, EIA Natural Gas Storage Change | | May 29 | NZ | Building Permits | | May 29 | JN | Jobless Rate, Household Spending, a string of CPI figures, Industrial Production |
What's going on? - UBS is now saying that they might experience more losses related to mortgage securities. It dropped 5.8% in Swiss trading.
- Increasing bets and talks on the need for a stronger Yuan (CNY) in order to contain inflation in China. USDCNY is down by 16% since mid-2005. Speculation is done in the forward market.
- The S&P/CaseShiller Home Price Index is the most important data today. Expected at -14.2% YoY. We believe it could be worse. Also the Consumer Confidence is expected to decline to 60, which would be the lowest in 15 years.
- EURJPY about to break trendline resistance from Nov-2007. EURUSD only two figures from the all-time high (1.6018). USDCHF focusing at parity again. AUDUSD likewise?
- Major resistance in spot gold coming up around 935-940. With new stories about Iran uranium enrichment programme, they may soon be taken out and Crude Oil stands to benefit from that as well.
FX USDCHF break-Out Play to the downside | EUR | USD | JPY | GBP | CHF | AUD | CAD | NZD | NOK | SEK | PLN | | | - | - | | + | + | - | + | | - | | FX Trading Strategies | Pair | Supp. | Resis. | Comments | | USDCHF | 1.0140 | 1.0360 | Swiss fundamentals remain sound we remain our bullish stance on the Franc.
US figures at the same time likely to disappoint once again and we sell at
Friday lows at 1.0216 offer, stop bid at 1.0245, targeting below support at 1.0140. |
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| Risk warning
Finexo A/S shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Finexo that clients will profit from the strategies herein or that losses in connection therewith can or will be ,limited. Trades in accordance with the recommendations in an analysis especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not .occur as anticipated |
Disclaimer: Content in the Forex Forecast and Analysis section is for informational purposes only. Contributors submitted Forex Forecast, Forex Commentary, Forex Analysis, and Forex Articles and articles on other markets are based upon information gathered from various sources believed to be reliable, complete, and accurate. However, no guarantee can be made as to the validity of the believed sources. All statements and expressions in the Forex Forecast and Analysis section are opinions, and not meant as investment advice or solicitation. Forex Markets can be volatile and opinions may change without notice.
FOREX : Foreign Exchange Market
FOREX is a word play on the term Foreign Exchange Market. It is a market for buying and selling of currencies from all over the world. Certainly, such transactions are bound to be voluminous. It is just an estimate that there are about transactions of $1.5 trillion USD on a daily basis in the FOREX. Now just compare this with the paltry $300 billion USD a day transactions for the US Treasury Bond and the $100 billion a day transactions for the US Stock Exchange.
The FOREX came into existence in 1971 when the fixed currency exchanges were abolished. Currencies no longer had fixed values after that; on the contrary, their rates (mostly taken in comparison with the USD) were fluctuating, and changed on a daily basis. Throughout the seventies and the eighties the FOREX grew steadily, showing more advancement in the later years. The market has stupendously grown from $70 billion USD a day to the staggering amount that it transacts today on a daily basis.
There are actually about five thousand trading institutions in the FOREX. These include international banks, central government banks such as the US Federal Reserve, and commercial companies and brokers for all types of foreign currency exchange. The best thing that shows the unbiased nature of the FOREX market is that it has no fixed headquarters anywhere – it operates primarily from all major cities like New York, Tokyo, London, Hong Kong, Singapore, Paris, Frankfurt, etc. One can even use the telephone or the internet to make the transactions. The major businesses at the FOREX are the buying and selling of products in other countries. Several transactions are also conducted from the currency brokers or traders who stand to make small profits with the daily fluctuations in the market.
Most of the FOREX business is centered on big banks and financial institutions, but it doesn’t mean that the FOREX is inaccessible to small investors. The recent changes in the financial regulations have effectuated this accessibility. Earlier, a minimum transaction size was required to conduct business with the FOREX. But the current rules have made it possible to break large inter-bank units into smaller bits. Each bit is worth as less as $100,000. This makes it possible to each individual investor through loans that are extended for trading, known as leverage. The ratio to control the lots is 100:1. This means, every $1000 USD will allow one to control $100,000 on the FOREX.
The benefits of trading with the FOREX are mentioned below:-
(1) Liquidity of Investments – As the FOREX is a huge market, the funds have a very high degree of liquidity. This is because of the presence of the international banks who provide their bids and carry out a large number of transactions on a daily basis. Therefore, there is always a buyer or seller for any type of currency.
(2) Highest Degree of Accessibility – The FOREX is open 24 hours a day for 5 days a week. Every Monday morning the exchange opens at Australian Standard Time and closes on Friday afternoon at New York time. Greater accessibility is provided because the transactions can be conducted from the person’s home or office.
(3) Open Market – At the FOREX, there are no secrets. All the fluctuations that occur in the market are made accessible to everyone at the same time. There is no insider trading in the FOREX.
(4) No Commission – There is no hassle of paying commission to the brokers in the FOREX. Here the brokers earn by setting up a difference between the buying price and the selling price of a currency, which is known as a spread.
It must be understood by now that for the FOREX to work effectively, the currencies must always be traded in pairs. For instance, the Japanese yen must be traded against the euro. When one kind of currency is sold, there should be another to be bought in its stead.
The profit happens because there is always mobility between the different currencies. Even if there is a miniscule change in the exchange rate, then it could mean substantial changes in the profits due to the large amount of money involved in the transactions. People are thronging to the FOREX and not any other institution due to the trust that they have in it. To add to the advantage, the market is absolutely well-advanced and uses sophisticated software for dealing out its transactions.
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