The Euro pushed to highs around 1.2970 against the dollar on Thursday, but was unable to sustain the gains and dipped to lows near 1.2850 before consolidating close to 1.29. Liquidity levels were lower than normal given the impact of Thursday?s US Thanksgiving holiday which contributed to choppy trading conditions The Euro was again unsettled by speculation over a devaluation of the Russian rouble while global growth fears were also a negative factor for the currency. There was also evidence of month-end dollar demand with no significant US developments. The latest Euro-zone consumer prices data recorded a sharp decline in the flash inflation estimate to 2.1% from 3.2% the previous month as energy costs fell sharply while the unemployment rate increased to 7.7% from 7.5%. January soybean prices Friday closed slightly lower and near mid-range in more quiet trading in a holiday-shortened session. Soybean bears remain in overall near-term technical control.However, prices have been trading sideways at lower price levels for six weeks, which does give the bulls a bit of encouragement that a market low is close at hand, if not already in place. The next upside price objective for the bean bulls is to push and close prices above technical resistance at $9.21 1/4 a bushel. Stock Market: Dead Cat Bounce. Ignoring all news and considering the technical data only, the latest 5-day stock market recovery is unimpressive. S and P 500 rose above the highs of the previous 8 trading days, but volume fell by 54%. Declining volume on rally days calls into question the power and sustainability of this stock price recovery. The technical chart pattern of the bounce resembles a 5-day Bearish Rising Wedge, with upward sloping boundary lines converging, and with declining volume. Chart Presentation: Macro Revisit Nov. 28 (Bloomberg) ? Treasuries posted their biggest monthly gain since Ronald Reagan was in the White House, as President-elect Barack Obama said the U.S. faces a ?time of great trial? and the economy shrinks. Nov. 28 (Bloomberg) ? U.S. stocks gained, capping the biggest weekly advance for the Standard and Poor?s 500 Index in 34 years, on speculation that government bailouts will shore up the economy.
What Is Forex? Get Rich! By Darry J.Oswald Although forex is the largest financial market in the world, it is relatively unfamiliar terrain to retail traders. Until the popularization of internet a few years ago, FX was primarily the domain of large financial institutions, multinational corporations and secretive hedge funds. But times have changed, and individual investors are hungry for information on this fascinating market.
What makes the relative value of Currency fluctuate?
There are two reasons the relative value of a currency fluctuates. The first is because of a 'real' market: as outside investors or visitors wish to buy things within a country, they are forced to convert their domestic currency into the currency of the country they are buying within. Similarly, as money leaves the country, people must sell their currency for the foreign currency they will need to spend or invest abroad.
The second force for currency fluctuation is speculation. As investors feel a given currency will act strongly or weakly, they will buy or sell accordingly. This speculation can have drastic consequences on a national currency and consequently on a country's economy. During the East Asia Crisis in 1997, for example, as nations in Asia began facing economic downturns, speculators used currency to realize enormous profits and in many analysts' view helped to exacerbate the problem.
Benefits of Currency Trading
Currency has many very real benefits over equity like the stock exchange. The spreads for currency are extremely low, making the cost to a trader very low as well. The volatility of the currency market is extremely high, which means that
a trader can generate enormous return on a given exchange. The ratio of volatility to spread is approximately 500:1 for the currency market, as compared to 100:1 for even the most ideal of stocks.
Until recently, the currency market was very closed to small investors. Banking conglomerates and large multinationals were the main movers of this market place. In the past few years, however, new technologies have opened the doors to investors of all stripes. It is difficult to miss the enormous benefit of this 'new' market for the individual investor: higher returns with lower risk given the same amount of market knowledge have a very small downside.
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