Forex Trading, Forex Exchange, Foreign Exchagne, Dollar Rates

FOREX – ONLINE CURRENCY TRADING MARKET

Anand Kannan — Sat, 24 Jul 2010 20:36:29 +0000

FOREX – The name stands for foreign exchange trading market, the biggest trade market in the world with surplus amount of money being exchanged. Fx and currency are nothing but other names for FOREX.

The foreign exchange trade market is all about the exchange of currencies like USD, EURO, POUND, and STERLING by the western countries. Normally, the currency trading is done in pairs, for example, a party buying USD and exchanging it with EURO.

The Foreign exchange trade started to emerge especially for the western countries, who have the need to buy and sell their currencies. There are many participants who take part in the foreign exchange trade; Government, Commercial companies, Central banks, financial institutions etc.

The trading occurs when one of the participants is buying a quantity of one currency and exchanging it by selling the other type of currency. The ultimate aim of FOREX is to improve trade and investment. An investor gets profit by a low margin depending on the fluctuations in the currency value with respect to the foreign exchange rate. The fluctuations in money value with respect to foreign exchange rate will be steady and don’t vary in a large manner as that of the stock market.

Few other things which speculate FOREX are; its liquidity, Bulk volumes of trade and round the clock working hours. Other markets provide you fixed income whereas FOREX provides you with a low margin profit.

In order to gain profit you must buy the currency with an increase in its value with respect to foreign exchange rate and by selling the other currency in exchange for it. This may provide you with a gain.

In general , FOREX online trading is performed with the help of brokers. But it can be done without human intervention too. Many may not be aware of the FOREX robots.

FOREX robots are nothing but software programs designed to help the investor acquire profit. As human beings are subjected to tiredness, these robots work round the clock to take care of the investor’s currency and provide him with a profit.

As most of the FOREX robots perform trading depending upon the past trade conditions, a special robot called FOREX megadroid robot with a special program installed, makes analysis of the trade by taking future into account, and intelligently gains the investor.

Another important feature of this FOREX megadroid robot is, it works even when the market is facing downside. Most of the robots are designed in such a way that they work only in steady market conditions. But FOREX megadroid robots work the other way. Thus an investor can really gain a profit in the foreign exchange trade market.

Anand Kannan is an author living in India. He is an expert in FOREX Trading and you can learn a lot about it from his website http://forexattitude.com/

Author: Anand Kannan
Article Source: EzineArticles.com
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SPANISH AND MALLORCA PROPERTY UPDATE – INTEREST & EXCHANGE RATES

David Novi — Sat, 24 Jul 2010 20:36:27 +0000

The international financial back drop for the Spanish and Mallorca property markets remained largely unchanged over the last month although the expected long term trends for exchange and interest rates appear to have been established despite ongoing uncertainty across the globe.

Interest rates in the US and UK seem to be close to their bottom (not least because they are close to zero!) and expectations are that they will remain at these levels for some considerable time with any increases not anticipated until 2011. The emphasis in the US and UK will stay with quantitative easing measures to improve cash flow in the credit markets.

In the Euro Zone on the other hand interest rates remain relatively high at 1.25% and while the ECB talks of announcing measures to ease private sector credit, the reality is that these are much harder to introduce in a “multi state” Europe and where no procedures exist to indemnify the Central Bank against losses resulting from asset purchases. At least in part this should mean that the ECB will have to continue to reduce interest rates, despite their reticence to do so, in contrast to central banks elsewhere. The RBS only anticipate one further quarter point drop although at Novi Property we feel that the structural weaknesses in the Euro Zone, coupled with the more restrictive position of the ECB regarding quantitative easing methods, could mean one further quarter point cut may be needed.

On the exchange rate front, and particularly the relationship between Sterling and the Euro, the trend of a more stable Sterling, and a move to longer term weakening of the Euro, has continued. Much of the weakness of the UK economy, and on going downside risks, seem to have been factored in to the current Sterling rate, while that does not seem to be the case in Europe where the expectations are that the single currency will continue it’s decline against the dollar and start to suffer against Sterling (the Euro lost 2% against Sterling last month).

As we have maintained for sometime this backdrop for prospective purchasers of Mallorca property is reasonably favorable although the big question for Sterling denominated buyers is how to time any acquisition to take advantage of the anticipated strengthening of Sterling / weakening of the Euro. While buyers may wish to look at delayed completions and multi currency mortgage finance, UK national vendors of Mallorca and Spanish property face a very different problem – how to achieve a sale as quickly as possible and in a very weak market, if they are looking to repatriate sales proceeds back to the UK and take advantage of Sterling’s current weakness against the Euro.

Where a buyer is Sterling denominated and vendor a UK national seeking to repatriate funds it is vital that the dynamic of the negotiations includes a currency / exchange rate element, if a fair and equitable deal is to be found that can satisfy both parties and facilitate a deal. By way of example:

A property valued at 500,000EUR would “cost” a Sterling denominated buyer 454,000 pounds at today’s exchange rate of 1.10 Euros / Pounds. Assuming the purchase were delayed 9-12 months this “cost” may well have fallen to 400,000 pounds if the exchange rate has moved to 1.25 Euros / Pounds, as is forecast, ie 54,000 pounds / 12% less. Of course the opposite has happened to the hypothetical UK national vendor of the same property. Rather than receiving the 454,000 pounds he / she will only have 400,000 if the sale is delayed. It could thus be argued that if both parties want a deal then some middle ground should be found where perhaps the buyer agrees to pay now but pay a little less and the vendor accepts less in exchange for an early completion.

Equally in such a weak “buyers” market it could also be argued that with “buyers” so few on the ground a vendor might do better accepting a lower offer now, rather than holding out for something higher in the future, not only because of the uncertainty of whether another buyer will be found but also because if and when they do come forwards the exchange rate will have moved against the vendor. In our example the vendor might well be advised to accept an “offer” today of 440,000EUR which when exchange and repatriated at an exchange rate of 1.1 Euros / Sterling will give him / her 400,000 pounds, rather than hold out for 500,000EUR in the future which will not only, in all probability, be worth no more than the 400,000 pounds they would get now, but also has the very significant element of uncertainty given that the buyer may well not be there at all in the future (“bird in the hand”!!)

The “win / win” option is for the vendor to sell now at the prevailing high Euro / Sterling exchange rate but the buyer to delay having to exchange his / her Sterling to Euros which can be done, at least in part, via a multi currency mortgage (ie the mortgage is taken out in Sterling but later converted to Euros when the exchange rate is more favorable. Obviously there is still a need to pay a deposit in Euros, likely to be 40% in the current market with prevailing Loan to Value Ratios, so the buyer will still want a discount but only on 40% of the purchase price not 100%. In our case the purchaser may want to reduce the Sterling equivalent of the 40% deposit on the 500,000EUR purchase price from 200,000EUR (ie 181,000 pounds at today’s exchange rate of 1.1 to 160,000 pounds based on an exchange rate of 1.25 that they may have got delaying the purchase for 9 -12 months). The overall purchase price would thus be agreed at 21,000EUR less (ie 479,000EUR) rather than 60,000EUR less (ie 440,000EUR) in the example above. The buyer is left in the same position as before while the vendor is 39,000EUR better off. (Please contact David Novi BA MPhil MRICS if a multi currency mortgage might be of interest)

Continuing the “mortgage” theme, although these are not easy times for obtaining credit, if you do have a stable income profile, some excellent deals are now available for prospective purchasers with banks seeking to “entice” new good quality clients to help balance their lending portfolios against the ever increasing number of existing bad debts on these books, resultant in part due to their own imprudent lending practices.

David Novi is founding Partner of Mallorca property agents, Novi Property Mallorca http://www.novipropertymallorca.com, Mallorca Chartered Surveyors, Mallorca Real Estate Search, and The Mallorca Mortgage Business http://www.mortgagesinmallorca.com.

David specialises in advising private and corporate clients on all aspects of buying property in Mallorca including investment appraisal, property and site finding, development project management and funding and is a member of the RICS (Royal Institution of Chartered Surveyors). David also writes articles on the Mallorca and Spanish property markets offering clients a detailed insight into market conditions generally and the attractiveness of individual investment opportunities. The Mallorca Property News web site displays a selection of these publications. Before moving to Mallorca David was Managing Director of Thames gateway property investors and developers, Tilfen Land.

Author: David Novi
Article Source: EzineArticles.com
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THE TOWER OF BASEL – DO WE WANT THE BANK FOR INTERNATIONAL SETTLEMENTS ISSUING OUR GLOBAL CURRENCY?

Ellen Brown — Sat, 24 Jul 2010 20:36:25 +0000

In an April 7 article in The London Telegraph titled “The G20 Moves the World a Step Closer to a Global Currency,” Ambrose Evans-Pritchard wrote:

“A single clause in Point 19 of the communiqué issued by the G20 leaders amounts to revolution in the global financial order.

“‘We have agreed to support a general SDR allocation which will inject $250bn (£170bn) into the world economy and increase global liquidity,’ it said. SDRs are Special Drawing Rights, a synthetic paper currency issued by the International Monetary Fund that has lain dormant for half a century.

“In effect, the G20 leaders have activated the IMF’s power to create money and begin global ‘quantitative easing’. In doing so, they are putting a de facto world currency into play. It is outside the control of any sovereign body. Conspiracy theorists will love it.”

Indeed they will. The article is subtitled, “The world is a step closer to a global currency, backed by a global central bank, running monetary policy for all humanity.” Which naturally raises the question, who or what will serve as this global central bank, cloaked with the power to issue the global currency and police monetary policy for all humanity? When the world’s central bankers met in Washington last September, they discussed what body might be in a position to serve in that awesome and fearful role. A former governor of the Bank of England stated:

“[T]he answer might already be staring us in the face, in the form of the Bank for International Settlements (BIS). . . . The IMF tends to couch its warnings about economic problems in very diplomatic language, but the BIS is more independent and much better placed to deal with this if it is given the power to do so.”1

And if the vision of a global currency outside government control does not set off conspiracy theorists, putting the BIS in charge of it surely will. The BIS has been scandal-ridden ever since it was branded with pro-Nazi leanings in the 1930s. Founded in Basel, Switzerland, in 1930, the BIS has been called “the most exclusive, secretive, and powerful supranational club in the world.” Charles Higham wrote in his book Trading with the Enemy that by the late 1930s, the BIS had assumed an openly pro-Nazi bias, a theme that was expanded on in a BBC Timewatch film titled “Banking with Hitler” broadcast in 1998.2 In 1944, the American government backed a resolution at the Bretton-Woods Conference calling for the liquidation of the BIS, following Czech accusations that it was laundering gold stolen by the Nazis from occupied Europe; but the central bankers succeeded in quietly snuffing out the American resolution.3

In Tragedy and Hope: A History of the World in Our Time (1966), Dr. Carroll Quigley revealed the key role played in global finance by the BIS behind the scenes. Dr. Quigley was Professor of History at Georgetown University, where he was President Bill Clinton’s mentor. He was also an insider, groomed by the powerful clique he called “the international bankers.” His credibility is heightened by the fact that he actually espoused their goals. He wrote:

“I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960’s, to examine its papers and secret records. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its instruments. . . . [I]n general my chief difference of opinion is that it wishes to remain unknown, and I believe its role in history is significant enough to be known.”

Quigley wrote of this international banking network:

“[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.”

The key to their success, said Quigley, was that the international bankers would control and manipulate the money system of a nation while letting it appear to be controlled by the government. The statement echoed one made in the eighteenth century by the patriarch of what would become the most powerful banking dynasty in the world. Mayer Amschel Bauer Rothschild famously said in 1791:

“Allow me to issue and control a nation’s currency, and I care not who makes its laws.”

Mayer’s five sons were sent to the major capitals of Europe – London, Paris, Vienna, Berlin and Naples – with the mission of establishing a banking system that would be outside government control. The economic and political systems of nations would be controlled not by citizens but by bankers, for the benefit of bankers. Eventually, a privately-owned “central bank” was established in nearly every country; and this central banking system has now gained control over the economies of the world. Central banks have the authority to print money in their respective countries, and it is from these banks that governments must borrow money to pay their debts and fund their operations. The result is a global economy in which not only industry but government itself runs on “credit” (or debt) created by a banking monopoly headed by a network of private central banks; and at the top of this network is the BIS, the “central bank of central banks” in Basel.

BEHIND THE CURTAIN

For many years the BIS kept a very low profile, operating behind the scenes in an abandoned hotel. It was here that decisions were reached to devalue or defend currencies, fix the price of gold, regulate offshore banking, and raise or lower short-term interest rates. In 1977, however, the BIS gave up its anonymity in exchange for more efficient headquarters. The new building has been described as “an eighteen story-high circular skyscraper that rises above the medieval city like some misplaced nuclear reactor.” It quickly became known as the “Tower of Basel.” Today the BIS has governmental immunity, pays no taxes, and has its own private police force.4 It is, as Mayer Rothschild envisioned, above the law.

The BIS is now composed of 55 member nations, but the club that meets regularly in Basel is a much smaller group; and even within it, there is a hierarchy. In a 1983 article in Harper’s Magazine called “Ruling the World of Money,” Edward Jay Epstein wrote that where the real business gets done is in “a sort of inner club made up of the half dozen or so powerful central bankers who find themselves more or less in the same monetary boat” – those from Germany, the United States, Switzerland, Italy, Japan and England. Epstein said:

“The prime value, which also seems to demarcate the inner club from the rest of the BIS members, is the firm belief that central banks should act independently of their home governments. . . . A second and closely related belief of the inner club is that politicians should not be trusted to decide the fate of the international monetary system.”

In 1974, the Basel Committee on Banking Supervision was created by the central bank Governors of the Group of Ten nations (now expanded to twenty). The BIS provides the twelve-member Secretariat for the Committee. The Committee, in turn, sets the rules for banking globally, including capital requirements and reserve controls. In a 2003 article titled “The Bank for International Settlements Calls for Global Currency,” Joan Veon wrote:

“The BIS is where all of the world’s central banks meet to analyze the global economy and determine what course of action they will take next to put more money in their pockets, since they control the amount of money in circulation and how much interest they are going to charge governments and banks for borrowing from them. . . .

“When you understand that the BIS pulls the strings of the world’s monetary system, you then understand that they have the ability to create a financial boom or bust in a country. If that country is not doing what the money lenders want, then all they have to do is sell its currency.”5

THE CONTROVERSIAL BASEL ACCORDS

The power of the BIS to make or break economies was demonstrated in 1988, when it issued a Basel Accord raising bank capital requirements from 6% to 8%. By then, Japan had emerged as the world’s largest creditor; but Japan’s banks were less well capitalized than other major international banks. Raising the capital requirement forced them to cut back on lending, creating a recession in Japan like that suffered in the U.S. today. Property prices fell and loans went into default as the security for them shriveled up. A downward spiral followed, ending with the total bankruptcy of the banks. The banks had to be nationalized, although that word was not used in order to avoid criticism.6

Among other collateral damage produced by the Basel Accords was a spate of suicides among Indian farmers unable to get loans. The BIS capital adequacy standards required loans to private borrowers to be “risk-weighted,” with the degree of risk determined by private rating agencies; and farmers and small business owners could not afford the agencies’ fees. Banks therefore assigned 100 percent risk to the loans, and then resisted extending credit to these “high-risk” borrowers because more capital was required to cover the loans. When the conscience of the nation was aroused by the Indian suicides, the government, lamenting the neglect of farmers by commercial banks, established a policy of ending the “financial exclusion” of the weak; but this step had little real effect on lending practices, due largely to the strictures imposed by the BIS from abroad.7

Similar complaints have come from Korea. An article in the December 12, 2008 Korea Times titled “BIS Calls Trigger Vicious Cycle” described how Korean entrepreneurs with good collateral cannot get operational loans from Korean banks, at a time when the economic downturn requires increased investment and easier credit:

“‘The Bank of Korea has provided more than 35 trillion won to banks since September when the global financial crisis went full throttle,’ said a Seoul analyst, who declined to be named. ‘But the effect is not seen at all with the banks keeping the liquidity in their safes. They simply don’t lend and one of the biggest reasons is to keep the BIS ratio high enough to survive,’ he said. . . .

“Chang Ha-joon, an economics professor at Cambridge University, concurs with the analyst. ‘What banks do for their own interests, or to improve the BIS ratio, is against the interests of the whole society. This is a bad idea,’ Chang said in a recent telephone interview with Korea Times.”

In a May 2002 article in The Asia Times titled “Global Economy: The BIS vs. National Banks,” economist Henry C K Liu observed that the Basel Accords have forced national banking systems “to march to the same tune, designed to serve the needs of highly sophisticated global financial markets, regardless of the developmental needs of their national economies.” He wrote:

“[N]ational banking systems are suddenly thrown into the rigid arms of the Basel Capital Accord sponsored by the Bank of International Settlement (BIS), or to face the penalty of usurious risk premium in securing international interbank loans. . . . National policies suddenly are subjected to profit incentives of private financial institutions, all members of a hierarchical system controlled and directed from the money center banks in New York. The result is to force national banking systems to privatize . . . .

“BIS regulations serve only the single purpose of strengthening the international private banking system, even at the peril of national economies. . . . The IMF and the international banks regulated by the BIS are a team: the international banks lend recklessly to borrowers in emerging economies to create a foreign currency debt crisis, the IMF arrives as a carrier of monetary virus in the name of sound monetary policy, then the international banks come as vulture investors in the name of financial rescue to acquire national banks deemed capital inadequate and insolvent by the BIS.”

Ironically, noted Liu, developing countries with their own natural resources did not actually need the foreign investment that trapped them in debt to outsiders:

“Applying the State Theory of Money [which assumes that a sovereign nation has the power to issue its own money], any government can fund with its own currency all its domestic developmental needs to maintain full employment without inflation.”

When governments fall into the trap of accepting loans in foreign currencies, however, they become “debtor nations” subject to IMF and BIS regulation. They are forced to divert their production to exports, just to earn the foreign currency necessary to pay the interest on their loans. National banks deemed “capital inadequate” have to deal with strictures comparable to the “conditionalities” imposed by the IMF on debtor nations: “escalating capital requirement, loan writeoffs and liquidation, and restructuring through selloffs, layoffs, downsizing, cost-cutting and freeze on capital spending.” Liu wrote:

“Reversing the logic that a sound banking system should lead to full employment and developmental growth, BIS regulations demand high unemployment and developmental degradation in national economies as the fair price for a sound global private banking system.”

THE LAST DOMINO TO FALL?

While banks in developing nations were being penalized for falling short of the BIS capital requirements, large international banks managed to escape the rules, although they actually carried enormous risk because of their derivative exposure. The mega-banks succeeded in avoiding the Basel rules by separating the “risk” of default out from the loans and selling it off to investors, using a form of derivative known as “credit default swaps.”

However, it was not in the game plan that U.S. banks should escape the BIS net. When they managed to sidestep the first Basel Accord, a second set of rules was imposed known as Basel II. The new rules were established in 2004, but they were not levied on U.S. banks until November 2007, the month after the Dow passed 14,000 to reach its all-time high. It has been all downhill from there. Basel II had the same effect on U.S. banks that Basel I had on Japanese banks: they have been struggling ever since to survive.8

Basel II requires banks to adjust the value of their marketable securities to the “market price” of the security, a rule called “mark to market.”9 The rule has theoretical merit, but the problem is timing: it was imposed ex post facto, after the banks already had the hard-to-market assets on their books. Lenders that had been considered sufficiently well capitalized to make new loans suddenly found they were insolvent. At least, they would have been insolvent if they had tried to sell their assets, an assumption required by the new rule. Financial analyst John Berlau complained:

“The crisis is often called a ‘market failure,’ and the term ‘mark-to-market’ seems to reinforce that. But the mark-to-market rules are profoundly anti-market and hinder the free-market function of price discovery. . . . In this case, the accounting rules fail to allow the market players to hold on to an asset if they don’t like what the market is currently fetching, an important market action that affects price discovery in areas from agriculture to antiques.”10

Imposing the mark-to-market rule on U.S. banks caused an instant credit freeze, which proceeded to take down the economies not only of the U.S. but of countries worldwide. In early April 2009, the mark-to-market rule was finally softened by the U.S. Financial Accounting Standards Board (FASB); but critics said the modification did not go far enough, and it was done in response to pressure from politicians and bankers, not out of any fundamental change of heart or policies by the BIS.

And that is where the conspiracy theorists come in. Why did the BIS not retract or at least modify Basel II after seeing the devastation it had caused? Why did it sit idly by as the global economy came crashing down? Was the goal to create so much economic havoc that the world would rush with relief into the waiting arms of the BIS with its privately-created global currency? The plot thickens . . . .

Originally posted on Global Research on April 18, 2009.

——————————————————————————–

1. Andrew Marshall, “The Financial New World Order: Towards a Global Currency and World Government,” Global Research (April 6, 2009).

2. Alfred Mendez, “The Network,” in “The World Central Bank: The Bank for International Settlements.”

3. “BIS – Bank of International Settlement: The Mother of All Central Banks,” Hubpages (2009).

4. Ibid.

5. Joan Veon, “The Bank for International Settlements Calls for Global Currency,” News with Views (August 26, 2003).

6. Peter Myers, “The 1988 Basle Accord – Destroyer of Japan’s Finance System” (updated September 9, 2008).

7. Nirmal Chandra, “Is Inclusive Growth Feasible in Neoliberal India?”, Network Ideas (September 2008).

8. Bruce Wiseman, “The Financial Crisis: A look Behind the Wizard’s Curtain,” Canada Free Press (March 19, 2009).

9. See Ellen Brown, “Credit Where Credit Is Due,” webofdebt.com/articles/creditcrunch.php (January 11, 2009).

10. John Berlau, “The International Mark-to-market Contagion,” Open Market (October 10, 2008).

Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In “Web of Debt,” her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://www.webofdebt.com/ and http://www.ellenbrown.com/ Her eleven books include the bestselling “Nature’s Pharmacy,” co-authored with Dr. Lynne Walker, which has sold 285,000 copies.

Author: Ellen Brown
Article Source: EzineArticles.com
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THAILAND EXCHANGE RATE CRISES IN 1990

Pauline Go — Sat, 24 Jul 2010 20:36:23 +0000

According to economists, there are five principal reasons for the East Asian currency Crisis or IMF of July 1997 that caused a period of economic unrest and turmoil in Southeast Asian financial markets. The countries that were mainly affected during the crisis included Thailand, Indonesia, Malaysia, and South Korea. Inadequate foreign exchange reserves, improper handling of fund allocations and inadequately developed financial sectors in the developing Asian countries have been held as the prime reasons for the drop in the local currency exchange rates against the US dollar during the period.

The entire episode of economy crisis started due to inappropriate speculations. Speculators forecasted a decline in international market growth and started selling South East Asian currencies. With this, there was a currency depreciation and sudden drop in the value of Thai baht, Malaysian ringgit, Phillipine Peso and Indonesian rupiah. Due to this, all these markets had to sell their dollars to buy back their currencies. This caused a rapid decline in the foreign exchange reserves. In the second stage of the crisis, the lower value of the neighboring currencies affected other Southeast Asian currencies like Taiwan dollar, South Korean Won, Singaporean Dollar and Hong Kong Dollar. Governments raised the interest rates for the purpose of defending the local currency and inviting foreign capital. Due to the rapid decline in the economy, investors started removing their investments from the markets, thereby initiating a fall in the stock prices. IMF with the assistance of World Bank and Asian Development Bank arranged support packages of around $120 billion in order to rescue these markets.

Certain economists believe that the distorted macroeconomic policies and the fixed exchange rate of the currency as a major cause for the economic crisis in 1997.

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Thailand Travel Information, Airline Travel Safety Restrictions, Alpena Vacation Getaway,

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LEARN CURRENCY TRADING WITH PAPER TRADING

Troy Degarnham — Sat, 24 Jul 2010 20:36:22 +0000

Currency trading has become a very popular investment trend due to the noteworthy advantages that it holds over many other investment methods. Understanding the basic principles and ideas that fuel forex trading is a must for any prospective currency trading client. Like any method of trading, there are many financial risks associated with . It is a wise choice to become well versed in the currency trading system before actually putting up any capital. It is very easy to get wrapped in the attraction of it but without learning the proper tools and information, currency trading can fail miserably. They can be a very confusing system to navigate through and all experts agree unanimously that learning as much as possible about currency trading is the first step to ensure success in the markets.

It is a good idea to keep in mind that there is a high incidence of fraud involved with forex trading and brokers. A reputable currency trading broker will typically be coupled with a bank or other financial institution. Be sure that the broker you select is registered with the Commodity Futures Trading Commission and is a certified Futures Commission Merchant. The most imperative step in learning the forex trading business is to find a well-established broker who has a proven track record of successful trading.

Most reputable currency trading brokerages will allow you to test out skills on a demo system that can be used for 30 days. This practice allows the brokerage as well as the client to a trial similar to a real trading system with the exception that actual money will not be used in the transactions. This paper trading system will teach all of the market principles while allowing the client to utilize the software required for trading. Currency trading brokerages will also advise you to carry on paper trading until the client shows a steady profit. Paper trading is extremely popular as it allows the client to trace and track the trades without actually losing any money due to inexperience and lack of knowledge about forex trading.

When the client is ready to set out on the currency trading market with actual money, the broker will present the client with a variety of account choices. The initial investment ranges from $250 to $1000 or more with a specific margin rate. The margin rate will slightly differ according to account type as reflected by the investment the client has put into the forex trading. A margin rate is the amount of money you can control per each dollar of your money so the more money that is invested, the higher the leverage will be.

In the age of the internet, most if not all of the currency brokerage offer a very prominent online presence. Each individual brokerage firm utilizes their own system for predicting solid currency trading practices and will provide the client with real time quotes as well as technical analyzes accompanied by profit/loss analyses.

Troy Degarnham is the author and webmaster of http://www.forex-trading-brokers.info an informative website about Forex Trading Brokers.

Extensive help and tips on currency trading systems, software, signals, day trading, forex brokers, courses, and other secrets to help you gain financial freedom.

Author: Troy Degarnham
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USA & CHINA – DEBATE OVER RESERVE CURRENCY – A HISTORY OF DOLLAR ERA

Holly Pressman — Sat, 24 Jul 2010 20:36:20 +0000

After WWII, an agreement in 1944 created the Bretton Woods System. Under this financial system, all other currencies were pegged with US Dollar, which was linked to gold at the rate of $35 per ounce. Thus US Dollar became the key currency of the world. At that time, Dollar could not be over issued like today, because it was backed up by gold, and was thought to be as good as gold.

In 1970, the gold coverage of paper US Dollar dropped from 55% to 22%, because the US printed more Dollars to pay back its trade deficits. Foreign countries, such as Switzerland and France, lost faith in Dollar and began to trade their Dollar reserve into gold from the US. In order to stabilize the economy, President Nixon canceled the Bretton Woods System in 1971. After that, Dollar can no longer be convertible to gold directly.

In the following 30 years, after the collapse of fixed exchange rate under Bretton Woods System, most major countries in the world adopted floating exchange rates. But most international transactions are still dominated in Dollars; this maintains US Dollar as the De Facto world currency. The difference is that the circulation of Dollar is no longer restricted by the gold reserve. Comparing the price of gold at about 910 Dollars per ounce today, you can get a rough picture of it.

Post Dollar Era

As worried about Fed printing loads of money to respond the crisis, which may hurt China’s Dollar reserve, China realizes it can not rely too much on Dollar in the future. So China suggested substituting US Dollar with IMF’s Special Drawing Rights (SDRs) as the world’s single reserve currency in the future. SDRs, also called “paper gold”, were first created in 1969 as a tool to enhance the liquidity through replacing gold and silver in international transaction. The value of SDRs is determined by a basket of currencies include Dollar, Euro, Yen and Sterling. Although Dollar is still the key currency in this basket, its weight declined to 44 percent. In this way, other countries may be in a better place to defense their currency reserve when the key country suffers a bad time.

Whose Cheese Gets Moved?

See who said no. “I don’t believe that there is a need for a global currency. The dollar is extraordinarily strong right now”-this is Obama’s response to the proposal. There is no reason for the US to give up the Dollar’s reserve currency status right now. “Diluting Chinese savings to bail out America’s failing banks and bankrupt households, though highly beneficial to the US national interest in the short term, will destroy the dollar’s global status.”(Andy Xie, Financial Times May 4 2009) It is true, but only true in a long run.

It took over 10 years for Dollar overtaking Sterling as the world’s reserve currency after the US surpassed the UK in economy. It also took 15 years for Euro to be adopted after Euro Currency Unit first came to exist. It may take a long time for countries to recognize the SDRs. Before that, the SDRs should be further improved and perfected by IMF. However, don’t overlook that every major issue must get 85% votes in IMF, where the US owns 17% alone-enough a veto over every proposal. So, there is a still a long way to go. Even Governor Zhou Xiao chuan said, “It is a long term issue.”

Holly Pressman

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Author: Holly Pressman
Article Source: EzineArticles.com
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TAP THE POTENTIAL OF CURRENCY TRADING FOR PROFIT

William R. Alheim, Jr. — Sat, 24 Jul 2010 20:36:18 +0000

The term Currency Trading which is often synonymous with Foreign Exchange Trading (FOREX) can be highly lucrative monetarily or a short term journey to financial disaster. Since you are reading this article it can only be assumed you have an interest in the topic. Before proceeding any further you need to ask yourself which of the possible outcomes do you desire? From a layman’s perspective, currency trading is the buying and selling of currencies with the sole purpose of profiting from the transaction. This potentially rewarding market until recently was dominated by banks, insurance companies, and other large financial institutions, but every day an increasing number of individuals are joining the market.

You don’t need to be highly sophisticated to understand the basic knowledge required to begin trading. Two currencies are exchanged on the basis of the currency exchange rate currently prevailing that day and at that exact time. The currencies are always quoted in pairs, for example, EUR/USD for the Euro and the US Dollar. The exchange rate for any individual currency can vary greatly each day; much like the stock price of a company can go up and down on any day. A broad array of economic factors and events happening worldwide can produce exchange rate fluctuations. Such as; inflation, industrial production or current political and geographical proceedings are to mention but a few. Although it does not require a high degree of knowledge to begin trading the currency markets it is imperative that to become a thriving trader your comprehension of the factors that effect the market is essential.

The tremendous popularity of currency trading lies in a clear number of advantages it enjoys as compared to the stock exchanges, apart from its enormous size and volume. First, no commission for your trades are required by vast majority of the brokerage firms instead you pay the bid/ask spreads. Second, the flexibility of time is another positive aspect, in other words you are able dictate the terms as far as timing and the mode of trading is concerned. Third, foreign currency trading is suitable for small-time investors since you don’t necessarily need to invest large amounts of money to begin trading. Finally, you are able focus your attention on only a few currencies and the events we mentioned above effecting the selected currencies daily trading pattern.

Trading in currencies can not only can be beneficial financially it also can become a highly intoxicating addiction. Learning to trade is a fairly simple process, where as learning to trade and being able to MAKE MONEY at it is a completely different subject all together. Fortunately, for the beginner or for an experienced trader which has not been as successful as they desire there are many exceptional Forex training courses on they market today. Some of these even offer an one-on-one mentor where you are able to watch an experience highly profitable professional trader trade in real time and you are able to make the SAME trades as he is at the SAME time he is making the trades, thus virtually insuring a productive initiation to the Foreign Exchange Markets. By investing in a Forex trading course before actively starting to trade with a real money account is an investment that should be returned to you in a very quickly and could eventually lead being the smartest investment you have ever made.

William R. Alheim, Jr., CPA, MA – for reviews of the TOP 10 Forex Trading Courses visit http://www.tradingforexreviews.com/

Author: William R. Alheim, Jr.
Article Source: EzineArticles.com
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THE YEN CARRY TRADE – THE IMPACT OF RISING JAPANESE RATES

Aaron Fennell — Sat, 24 Jul 2010 20:36:15 +0000

One of the most significant trades that exist today is the carry trade on the Japanese yen. A basic description of the yen carry trade is that traders borrow yen in Japan at low interest rates, convert the yen into another currency, and invest the funds at a higher interest rate. The trader then earns the interest rate spread between the two currencies, but bears the risk that the yen will appreciate before the loan is repaid.

Though the risk from currency fluctuation is significant in relation to the interest rate spread, over time the interest spread earned on a carry trade can also be significant. While textbook carry trades involve risk free interest bearing assets, there is no reason why traders can’t use the borrowed yen to purchase other financial assets such as U.S. or European equities and corporate bonds. For many years Japan has been a major source of cheap leverage for international financial markets.

The derivatives instruments available today have enabled traders to synthetically create carry trades without engaging in loans with Japanese banks or handling actual yen currency. This has increased the ease with which traders can access this carry trade and has increased its magnitude and importance.

The global financial markets have become so integrated that individual central banks and governments no longer have control over their own financial markets. When a central bank raises interest rates to cool their financial markets some traders will simply access leverage through an alternative currency at cheaper rates. This can curb the impact that central bank interest rate hikes may have on local markets.

It is impossible to measure the total size of the yen carry trade, but it is clear that it is absolutely massive. This fact highlights the concern of what will happen if the Bank of Japan raises interest rates significantly. The Bank of Japan has been threatening to raise rates for years, but many see it as “crying wolf”.

If the Bank of Japan actually did significantly raise interest rates it could undermine the cheap leverage that has been available for so many years. The unraveling of these trades could no doubt have a remarkable impact on global financial markets. First, the yen could rally as traders are forced to purchase the currency and repay the yen based loans. Second, the proceeds used to purchase the yen would likely come from the sale of assets previously bought with yen based leverage.

Gone are the days when national economies could be examined in isolation. International financial markets have evolved into a single global economy and it is important to watch the Bank of Japan in addition to the local central bank.

Disclaimer:

The data and comments provided above are for information purposes only and must not be construed as an indication or guarantee of any kind of what the future performance of the concerned markets will be. While the information in this publication cannot be guaranteed, it was obtained from sources believed to be reliable. Futures and Forex trading involves a substantial risk of loss and is not suitable for all investors. Please carefully consider your financial condition prior to making any investments. MF Global Canada Co. is a Member CIPF.

Aaron Fennell is an account executive at the Toronto branch of MF Global. He has been actively trading since February 2002 in the areas of futures, options on futures, securities, and security options. If you would like to learn more about the yen carry trade contact Aaron Fennell via the MFGlobal website.

Author: Aaron Fennell
Article Source: EzineArticles.com
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UNDERSTANDING FOREIGN CURRENCIES WHEN YOU TRAVEL

Ramon Van Meer — Sat, 24 Jul 2010 20:36:13 +0000

When traveling internationally, there are a number of monetary and financial considerations you need to think about. Aiming to understand foreign currency echange can be both confusing and frustrating for the first-time traveler, yet there are a few easy approaches to control the local money before you start spending.

1st, you must find out what kind of currency is used in the country which you’re headed to and what it’s termed. The simplest way to do this is by a Google search for “[insert country name[]|] currency”, that ought to yield lots of informative results about the currency.

You’ll also desire to discover what denominations are used, including amounts for bills and coins. Be aware that every currency system is somewhat different, so while you might be used to having a particular type of coin or bill available in your own currency, other currencies may possibly not have these types of denominations, or may have added denominations that you are not used to. For instance, the Euro and many other world currencies have 1 coins, that are very convenient and may be unclear at first for Americans.

Next, you’ll most likely be itching to determine just how much things cost in said country and just how much to pay (or not pay) for particular things, so that you do not get scammed. Learning what things cost on average can be a little more difficult.

Start off by asking a currency exchange calculator, such as the XE Universal Currency Converter, which will provide you the going rate for your home currency against the foreign currency you’re learning about. Learn how much $1 (or your home currency) equals in the other currency to get an idea of how much you will receive when you trade cash. Remember that exchange rates adjust daily, if not hourly, so what currencies are worth is different pretty much every day.

Once you know how much $1 is worth in X country, you’ll have a better idea about how much things might cost, though costs of living in different places do vary widely. To get a better grip about this, consult a guidebook for basic information on entry fees, hotel prices, transportation costs, and this will give you a good idea about how much you should expect to pay. Be sure to look at the publication date on the guidebook, and if it is a few years old, compare the prices with today’s exchange rates to get a better idea of current costs.

After that, there is a short period of trial and error, where you might create some mistakes in how much you pay, or you could overpay for some things. That’s okay! For first-time travelers, the point is not to get the very best deal possible – that’s the work of experienced travelers and expats with good language skills and lots of time under their belts.

Newbie travelers must focus on having fun and studying the new culture and customs that they are experiencing!

Learn more about how to Fly Cheaper. Stop by Ramon van Meer’s site where you can find out all about Sydney Cheap Flights and what it can do for you.

Author: Ramon Van Meer
Article Source: EzineArticles.com
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THE MAJOR CURRENCIES IN THE FOREX MARKET AND FACTORS THAT CAUSE ITS TO FLUCTUATE

Joon Trade — Sat, 24 Jul 2010 20:36:11 +0000

In Forex Trading, US Dollar, Japanese Yen and the Euro dollar combined are the globe three major economic powerhouses and also the major currencies in the Forex market.

The US dollar is the most dominant currency in today world’s Interbank Forex market. The four next most traded currencies are the Euro dollar, Japanese Yen, British Pound and Swiss Franc. Though the Forex market comprises of almost all the currencies on earth, these four currencies traded against the US Dollar make up the majority on the Forex market and are known as major currencies or the majors.

Currencies are traded in pairs and each currency has its own symbol. For the Euro dollar- it is EUR, Japanese Yen – it is JPY, for the Pounds Sterling – it is GBP, and for the Swiss Franc – it is CHF. Hence, EUR/USD would be Euro-Dollar pair. GBP/USD would be pounds Sterling-Dollar pair and USD/CHF would be Dollar-Swiss Franc pair and so on and so forth.

You will always see the USD quoted first with few exceptions such as Pounds Sterling, Euro Dollar, Australia Dollar (AUD) and New Zealand Dollar (NZD. The first currency quoted is called the base currency.

The cumulative buy and sell of a currency causes it to move either up or down. There are numerous factors that cause the fluctuation of exchange rate.

o Central bank monetary policy and balance of payment.

o A country’s political, social and fundamental economic environment such as economic growth rate, inflation and interest rate.

o The inflow and outflow of capital between nations – be it physical or portfolio flow.

o Central bank abilities to back up it own currency during speculative attack will provide faith to calm its currency price.

o Speculative activities by professional currency manger with billions of funds can also sometimes move the market.

Movement of the currencies is ultimately dictated by demand and supply. However, predicting demand and supply in Forex Trading is not as simply one would think.

JoonTrader is the owner of forexdiscover.com. For further recommended resources on how to make money in Forex Trading. Click here to grab the secret to consistent pips.

Author: Joon Trade
Article Source: EzineArticles.com
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