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Tuesday, July 21, 2009

What is Forex Market

An overview of forex market
The Forex market is a non-stop cash market where currencies of nations are traded, typically via brokers. Foreign currencies are constantly and simultaneously bought and sold across local and global markets and traders' investments increase or decrease in value based upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events.
The main enticements of currency dealing to private investors and attractions for short-term Forex trading are:

*24-hour trading, 5 days a week with non-stop access to global Forex dealers.
*An enormous liquid market making it easy to trade most currencies.
*Volatile markets offering profit opportunities.
*Standard instruments for controlling risk exposure.
*The ability to profit in rising or falling markets.
*Leveraged trading with low margin requirements.
*Many options for zero commission trading.

Forex trading

The investor's goal in Forex trading is to profit from foreign currency movements. Forex trading or currency trading is always done in currency pairs. For example, the exchange rate of EUR/USD on Aug 26th, 2003 was 1.0857. This number is also referred to as a "Forex rate" or just "rate" for short. If the investor had bought 1000 euros on that date, he would have paid 1085.70 U.S. dollars. One year later, the Forex rate was 1.2083, which means that the value of the euro (the numerator of the EUR/USD ratio) increased in relation to the U.S. dollar. The investor could now sell the 1000 euros in order to receive 1208.30 dollars. Therefore, the investor would have USD 122.60 more than what he had started one year earlier. However, to know if the investor made a good investment, one needs to compare this investment option to alternative investments. At the very minimum, the return on investment (ROI) should be compared to the return on a "risk-free" investment. One example of a risk-free investment is long-term U.S. government bonds since there is practically no chance for a default, i.e. the U.S. government going bankrupt or being unable or unwilling to pay its debt obligation.
When trading currencies, trade only when you expect the currency you are buying to increase in value relative to the currency you are selling. If the currency you are buying does increase in value, you must sell back the other currency in order to lock in a profit. An open trade (also called an open position) is a trade in which a trader has bought or sold a particular currency pair and has not yet sold or bought back the equivalent amount to close the position.

However, it is estimated that anywhere from 70%-90% of the FX market is speculative. In other words, the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency.

Saturday, July 11, 2009

Forex News 11julay,2009

Canadian Dollar Continues Drop as Commodities Price Falter
The Canadian currency ended its sixth week of losses against its U.S. counterpart as commodities and stocks dropped moved by concerns that the global slump will be longer and deeper than previously predicted

Chilean Peso Declines as Interest Rates Reach Record Low
The Chilean peso hit the weakest level in three weeks as the national central bank slashed the benchmark interest rates to a record low for the South American country.

Yen Rallies on Global Slump Insistent Concerns
The yen had one of the best performing days this week as rising concerns that the global slump will be longer than previously expected plagued markets worldwide with high levels of risk aversion, bringing investors to bet on the safety of the Japanese currency.

Euro Falls as Eastern European Economies Shrink
The euro is posting its worst weekly performance against the yen in two months and losing against several major currencies as more than 10 Eastern European nations will need loans to rescue their economies from the rising recession in the region

Sunday, July 5, 2009

Forex News July 5 , 2009

Dollar Climbs as Safety Demand Rises on Markets

The dollar ended this week posting gains versus all 6 major currencies, as another wave of pessimism caused by grim reports in U.S and U.K. Spurred demand for the safety of the greenback.

Mexican Peso Ends Week Down on Poor Economic Data
The Mexican peso, a currency which is highly dependent on United States economic conditions, had the first decline in three weeks as American unemployment figures increased concerns regarding the nation’s recession depth

Brazil’s Real Pared Weekly Losses on Exports Data

The Brazilian real, which started the week with a bearish movement due to rising concerns regarding the global slump depth, recovered its losses on favorable domestic economic reports.

Thursday, July 2, 2009

Forex latest News july 2nd , 2009

Swedish Krona Down on Central Bank Surprise

The Swedish krona lost against the euro and the dollar today after the nation’s central bank unexpectedly cut its benchmark interest rate and stated that the recession is deeper than predicted.

China’s Confidence on Dollar Pushes Greenback Up

The U.S. dollar climbed today after a Chinese Foreign Ministry official stated that the believes in the stability of the greenback, and informed that he is unaware of discussions next week during the G8 meeting regarding eventual substitutes for the dollar as the world main reserve currency.