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The Pound

It’s taking off…

The Bank of England cut rates today, and the Pound soared. A dedicated bunch of Forex Analysts have been claiming since the end of last year that the sell-off of the British Currency against the Dollar was overdone. The idea is that all the Pound needs is an excuse to start to gain on Dollar and, Voila, up we go.

That’s the thing about upheavals. They mess everything up. It used to be that if the Central Bank of a given Country cut their interest rates, the value of the Currency would decrease. In the case of the US for instance, you wouldn’t stand to gain much as an Investor if you purchased US based items (one way or the other, buying the dollar) if the Interest rates in the US are low. All that’s gone in a climate of fear such as we have now. Now people are worried about which currency is best to invest their money. They’ll go for currencies where the Powers-that-be seem to be doing more to ensure that their Economies get out of this rut faster. What’s an example of doing more? Cutting interest rates…aggressively. This will should help stimulate the Economies. Thus people are more comfortable investing. It can turn around though. For instance, if the rates are cut, but not enough, the opposite could happen and the everyone could fly away. Care has to be taken.

The Euro has not been so lucky in the last couple of days. Everyone still feels like the European Central Bank is unwilling to do enough (i.e. cut rates enough) to stimulate the European Economy. We will need things to go really well in the Equity Markets for the Euro to gain on the Dollar. We will be watching the Jobless Claims numbers out of the US. If they are worse than expected, then people will assume that the Economy here is not getting any better. The Dollar and Japanese yen would rise under such circumstances.

I am not sure about the Pound though. It just seems to want to go back up against the Dollar. You know, to teach it a lesson.

Happy Trading

Letting off steam

The eTrade Ads…Hilarious

We all need to let off some steam while the strength in the dollar continues

The Roller Coaster Continues…

How low can we go?

I’ve given up asking that one in current market conditions. The GDP numbers last week weren’t quite as bad as people predicted. Still, they were bad. More importantly, I don’t see anything that necessarily shows that things are getting better…at least not yet. 

What I found rather surprising was the strength of the British Pound. It gained substantially against the dollar, Yen and even the Euro. Once the encouraging statements came out of Barclays, the Pound never looked back. The only thing about this is that 4 out of the 5 news items about the Pound were positive i.e. not as bad as everyone thought they would be. Would you be willing to bet that the same will happen this week? Not too sure about that, mate.

We’re also getting the non-farm payrolls report this week, along with possible interest rate cuts by Australia and possibly the UK. It could be a messy week. Investors are going to be on their toes. It would be dangerous to try to work out the direction things are going. We shall watch how things start out this week, then we’ll decide

Happy Trading

Tuesday’s Trading…

…Or lack thereof.

Too much in the way of news this week. Everyone seems to be waiting for something to push them in one direction or the other. There’s going to be a breakout, and I’m afraid it might still favor the dollar.

Barclays came out to see they didn’t need any money from the British Government to keep things going. This might give the markets a slight boost, but I am not sure it is enough. There were some pretty dismal Consumer Confidence numbers from the US. There’s also more data expected for the rest of this week. All of this might mean that the dollar’s rally against everyone else (except the Yen) continues for some time yet.

I’m sitting this one out…just for today anyway. I’ll be keeping an eye out to see what happens. I’d like to catch the break when it happens…

Happy Trading

  
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