PoliticalAfghan :

PoliticalAfghan Presidential Election Goes To Second Round On November 7

10/20/09 11:49 am (EST)

Accepting the UN-backed Electoral Complaints Commission's (ECC) findings that the Afghan presidential election was affected by widespread fraud, the country's Independent Election Commission (IEC) announced Tuesday that a second round of voting will be held on November 7.

IEC chairman Azizullah Lodin said the Commission, which organized the Aug. 20 vote, did not want to "leave the people of Afghanistan in uncertainty" any longer.

"The Commission is agreed to go to a second round and say that nobody got more than 50 per cent," he told reporters.

Incumbent president Hamid Karzai told a news conference that he accepted the findings, adding they were a "step forward" for democracy.

Karzai's camp initially doubted the genuineness of the ECC report, but after intense talks with US Senator John Kerry and UN special envoy Kai Eide, he changed his mind. In the report released Monday, ECC had ordered the government-appointed IEC to invalidate 210 polling stations around the country where it found "clear and convincing evidence of fraud."

The UN watchdog also recommended that votes of 18 polling stations, set aside by the IEC, may be included in the results because it found no clear evidence of fraud.

It asked the IEC to adjust all presidential candidates' vote totals in accordance with the ECC's decisions before announcing the certified results.

The Afghan electoral body was also directed to "invalidate a certain percentage of each candidate's votes in six separate categories."

The overall effect of these revised tally meant that the ECC ruling pushed Karzai's share of vote to below 50 per cent, which requires him to face a second round voting with his nearest challenger Abdullah Abdullah.

Complaints of irregularities have poured in to the ECC since the polling was held on August 20. It included charges of ballot box stuffing and voter intimidation.

According to preliminary results declared by IEC, Karzai had a clear lead with 55% votes, far ahead of his main challenger Abdullah Abdullah, a former foreign minister, who had 28% of the votes.

This would have been enough for Karzai to win the election outright, but the IEC withheld the official declaration for the outcome of the investigation of complaints by ECC.

According to the Afghan electoral law, a presidential election will be extended to a run-off if none of the candidates achieve more than 50 per cent of the votes polled.

There were 30 presidential candidates in Afghanistan's second presidential election after the Taliban were dethroned. Held under threat by the Taliban, only one third of the country's 15 million eligible voters cast their ballot.

Addressing a joint press conference with John Kerry and Kai Eide, Karzai said "The decision announced by Independent Election Commission (IEC) today in a statement is a legal step and we support it."

Karzai told the chairman of Senate Foreign Relation Committee of the United States and UN special envoy.

"This is a step towards democracy and prosperity in Afghanistan and the people of Afghanistan once again will go to elect the country's president," he added.

Kerry, the chairman of Senate Foreign Relation Committee, said NATO and the international community would make all efforts to make the run-off a success.

News of the run-off vote followed mounting international pressure on Afghanistan's leaders to resolve the two-month-old political stand-off.

The White House - debating a request for 40,000 more US troops to be sent to Afghanistan - warned at the weekend no more soldiers would be deployed until a political resolution was reached.

The U.S.-led support was indispensable for Karzai to carry forward Kabul's war against terrorism at this crucial juncture.

"This is not the right time to discuss investigations, this is the time to move forward to stability and national unity," Karzai told reporters.

U.S. President Barack Obama welcomed President Karzai's statement accepting the IEC's certification of the election results, and agreeing to participate in a second round of the election.

"This is an important step forward in ensuring a credible process for the Afghan people which results in a government that reflects their will," he said in a statement.

Karzai's decision strengthens the Afghan constitution and laws, which is "in the best interests of the Afghan people," he added.

The President commended the independent election agencies for bringing the potential fraud to light, saying that throughout the election process, the U.S. has "been interested above all in the strength and independence of those institutions, and the need for them to fulfill their mandate on behalf of all Afghans."

U.S. administration officials have suggested that the President may not wait for the run-off election before making a final decision on sending more troops to the region.

British Prime Minister Gordon Brown also welcomed Karzai's "statesmanlike" acceptance of the run-off.

Forex: Dollar

Forex: Dollar Steadies Versus Euro As Stocks Tail Off
The dollar had a rare strong day versus other major currencies on Tuesday as stocks headed lower on Wall Street, fueling a modest bout of risk aversion.

After hitting yearly lows versus a number of higher-yielding counterparts, the dollar steadied as traders sifted through a pile of economic data and a key interest rate decision from north of the border.

The Bank of Canada maintained its key interest rate at 0.25 percent, as expected.

Here in the US, producer prices dropped more than expected in September, the latest government data showed Tuesday. A slide in energy prices led the retreat, but core prices edged lower as well.

The figures indicate that wholesale inflation remains under control, and supports the Federal Reserve's stance that weak economic conditions are continuing to weigh on prices, despite some signs of an economic recovery.

Meanwhile, the Commerce Department released a report on Tuesday showing a modest increase in housing starts in the month of September. However, starts came in well below economist estimates due in part to a downward revision to the previous month's data.

The report showed that housing starts edged up 0.5 percent to an annual rate of 590,000 in September from the revised August estimate of 587,000.

The dollar managed to improve by almost a penny after hitting a yearly low of 1.4993 versus the euro. Still, the buck has been in steep decline on long-term basis, dropping almost 25 cents since March.

Against the loonie, the dollar rose to C$1.0500, a big jump from a yearly low near C$1.0200.

Policy makers in Ottawa said that Canada's overnight target rate can be expected to remain at 0.25 percent until the end of the second quarter of 2010, given the overall risks to inflation are tilted slightly to the downside.

The dollar was steady versus the yen, holding above the 90 mark. Two weeks ago, the dollar tested a 1995 low of 87.08, slipping below 88.

Against the sterling, the dollar slipped to a 6-week low of 1.6488 before improving by a cent.

New motor vehicle sales:

FinancialAustralia September New Motor Vehicle Sales Up 2.9% On Month :

New motor vehicle sales in Australia increased in September by a seasonally adjusted 2.9 percent over August.

The Australian Bureau of Statistics reported Wednesday that vehicle sales totaled 77,744 in September.

The figure was a seasonally adjusted 2.0 percent lower than September 2008.

The Bureau said increased sales were seen in all vehicle types compared to August. Compared to September of last year, sports utility vehicle sales increased 2.8 percent while passenger vehicles dropped 1.6 percent and other vehicles were down 7.4 percent.

Credit Card Billings:

FinancialNew Zealand Credit Card Billings Drop In September

(RTTNews) - Wednesday, the Reserve Bank of New Zealand said the total credit card billings fell 2.3% year-on-year in September, in contrast to the 0.1% rise in the preceding month. This is the tenth decline recorded in credit card billings in the past 11 months.

In September, domestic card billings dropped 2.7% on a yearly basis, faster than the 0.2% fall in the previous month. At the same time, overseas card billings increased 0.7%, slower than the 2.5% growth in August.

Brazil Forex Trade Market:

Brazil Forex Trade Breaks Record As Investors Dump The BRL:

SAO PAULO (Dow Jones)--Brazil's BM&F Bovespa securities exchange registered a record breaking volume of $520 million in trade Tuesday as investors sold out of local real-backed assets following the introduction of a new tax.

The government announced that it would charge a 2% tax on foreign purchases of fixed income and equity, resulting in a knee-jerk reaction that sent the stock market 4% lower at one point during the day and the real from BRL1.70 to BRL1.749 to the U.S. dollar at the close.

The last volume record in the dollar spot market was set on April 4, 2009 and was $420.7 million.

Finance Minister Guido Mantega said the tax move was designed to curb further real appreciation against the dollar, and avoid a bubble in equity prices. The real has appreciated by roughly 30% and the Ibovespa stock market is up over 70% year to date.

Foreign investors have been piling into Brazil, recently acquiring 73% of one of the country's latest share offerings, that of home builder PDG Realty (PDGR3.BR).

Although Bovespa officials said that there might be loopholes to allow for the tax to be reduced, international fund managers were unhappy with the decision, resulting in a sell-off of the Brazilian real and record volume

Capital controls like this have not been a maneuver that's been very successful," said Geoffrey Pazzanese, portfolio manager at Federated Investors and co-manager of the Federated InterContinental Fund.

"I would expect them to reverse course on this one, or at least give the market more definitive answers on how this will affect other market transactions," Pazzanese said.

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Then on the next five minute bar you will go short. You can either enter immediately or you can wait, giving the current candle some wiggle room to retrace toward the wick and then go short. Of course everything is the same for going long with the wick pointing the other direction.

Your goal is too scalp 5 pips or more. You can set a limit for this or you can use single click market orders to exit. Another method is to set a limit on half your position at 5 pips and then move your stop down to break even once the 5 pips is hit, so you can go after bigger profits. Sometimes you will only get as much as 5 pips, other times you can get dozens of pips. This is something you will need to test and demo, so you can get a better feel of how the WWM system works. Reminder: Don’t be greedy and let the Forex scalping work for you.

Should the trade go against you, you’ll have a stop loss, 2-5 pips away from the tip of the original wick you are trading against. The most you should place a stop for is 20 pips. If the original wick is over 15 pips, you should let the next candle retrace up the wick before entering. This gets you in a safer trade with less risk, but you may miss out on several good plays. Keep in mind anything can happen when trading so you need to act fast.

Here is a perfect setup for the WWM method:

USD Rallies on Soft Manufacturing Data:

The greenback advanced against its major rivals in the Wednesday trading session, edging higher against the euro toward the 1.46-level, while pushing the pound sterling to beneath the 1.60-figure and briefly dragging the Swiss franc to a 3-week low at 1.0447. The catalyst for the dollar’s gains was a sharply weaker than forecast report on Chicago PMI. Consensus estimates were looking for the PMI report in edge up higher beyond the key 50-level to 52.0, instead falling to 46.1 in September from a 50-reading in the previous month. The employment component edged up slightly 38.8 from 38.7 in August and the new orders index slumped to 46.3 from 52.5 previously.

The markets largely reacted to the weaker manufacturing figures with the US equity bourses losing ground early in the session and the riskier currencies relinquishing previous session’s gains versus the dollar. The final release of Q2 GDP revealed an improvement to -0.7% from -1.0% in the previous reading while the GDP deflator remained unchanged. The Q2 GDP sales component improved to 0.7%, up from 0.4% previously. Meanwhile, the September ADP private sector payrolls revealed a loss of 254k, versus an upwardly revised loss of 277 jobs from August.

The key highlight this week continues to be Friday’s September labor report.


The market is expected the unemployment rate to creep higher to 9.8%, up from 9.7% a month earlier. Non-farm payrolls are seen improving in September, with a loss of 188k jobs compared with 216k jobs shed in August.

Pound Gets Hammered by King:

The greenback climbed higher against the majors amid weaker US data and a pullback in commodities prices. The major stock indexes drifted lower, with the Nasdaq and S&P 500 sliding by over 1% and the Dow Jones drifting lower by 0.5%.



Weekly jobless claims improved from the previous week, declining to 530k from 545k. However, August home sales eased up, slipping 5.1 million units from 5.3 million units a month prior.

Greenback Slides to 14-mth Lows :

The dollar resumed its sell-off in the Tuesday session, falling to its lowest level since August 2008 against the euro at 1.4874 and the Australian dollar at 0.9124. Spot gold continued to extend its gains, touching a fresh all-time high just shy of the $1,070 level at $1,069.70, while crude oil edged up higher to $73.87 per barrel. US equities were largely flat, little changed from the previous session.

With corporate earnings season picking up this week, traders will closely scrutinize tomorrow’s economic reports. The data to be released include September retail sales, import prices, export prices and business inventories. The headline retail sales report is expected to post a 1.4% decline in September compared with a 2.7% increase a month earlier. The excluding automobiles retail sales are expected to improve by 0.2% for September versus a 1.1% in the previous

month.

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Greenback Slumps on Shift to Riskier Assets

The dollar’s respite proved short-lived as traders resumed selling the currency in the Thursday session, pushing it to a fresh one-year low against the Australian dollar at 0.9088 and two-week low against the euro at 1.4816. The equity, commodity and energy markets were in lockstep as spot gold touch record high for its third consecutive session past the $1,055 per ounce level and crude oil edging back above the $70 per barrel level near $72.


The major US equity bourses also climbed higher, with the S&P 500 and Nasdaq advancing by nearly 1% in the afternoon session.

The economic data released earlier in the session saw weekly jobless claims improve to 521k from 551k a week prior and the August wholesale inventories slip by 1.3% from a 1.4% decline in the previous month. Speaking earlier today was Richmond Fed President Lacker reiterated that the economic outlook remains unchanged from the previous FOMC meeting, adding that the risk of sliding into a recession again in 2010 has diminished substantially.
He also quelled speculation of impending rate hikes advising that the Fed should not tighten policy today.

New Zealand Dollar

The New Zealand Dollar pushed sharply higher as third-quarter Consumer Price Index data showed the annual inflation rate had registered at 1.7%, a reading far higher than the expected 1.1% result. On a quarterly basis, prices grew 1.3% from the three months through March, the most in a year.
The outcome fed expectations that the central bank will need to raise interest rates sooner than the “latter part of 2010” estimate that RBNZ Governor Alan Bollard offered at the last policy meeting in September, pushing up a Credit Suisse index of traders’ 12-month yield expectations by 9 basis points (5.84%) and driving buying interest in the antipodean currency.
This catalyst may not prove lasting however, considering the policymakers will be wary of acting on rates to protect the still very fragile export sector. Indeed, both the central bank and government have been very vocal about the detrimental effects of a higher Kiwi dollar in driving away foreign demand.
Overseas sales make up over 30% of the economy’s total output, so any policies that stand to hurt firms catering to foreign markets stands to stunt the fledgling economic recovery of recent months.
In fact, the RBNZ may have already embarked on a somewhat covert tightening campaign aimed at checking inflationary pressure while minimizing the impact on the NZD exchange rate.
The central bank “leaked” an announcement that it would end some of its emergency lending programs enacted amid the credit crunch in November, a fact that it did not officially confirm via an official news release until about a day later.
This move will gradually slow the flow of liquidity into the economy, reducing the pace of money supply growth and acting against inflation. Policymakers’ approach to the announcement suggests they were consciously trying to avoid a snow-ball effect that would send the New Zealand Dollar steeply higher.
It also hints that perhaps this approach to tightening will be seen as sufficient to stick with rates at current levels until the second half of next year as scheduled

Banks:

The Bank of Japan’s Monthly Report saw the central bank upgrade its economic outlook for the second consecutive month, saying the drop in capital spending is moderating while the pace of deflation is likely to stabilize in the short term. However, the more interesting news came from

Finance Minister Hirohisa Fujii, who revealed that he told his US counterpart Tim Geithner that while he agrees with a strong US Dollar policy, nations should not compete to devalue currencies, citing the 1930s’ FX devaluation as detrimental to the global economy at the last G7 conference. The comments hint that perhaps Japanese authorities will shy away from intervention if the Yen counties higher with USDJPY poised to sink deeper below 90.00, a level that was widely believed to be the threshold of Japan’s comfort zone.

Mobile Alerts

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You can Also, review economic calendar on the front page and be informed when the next economic report is released.

For USD region:

ADP Employment Change
Consumer Confidence
CPI
Durable Goods Orders
Empire State Manufacturing Survey
Employment Change
Existing Home Sales
Federal Funds Rate
GDP
Industrial Production
ISM Manufacturing
ISM Non-Manufacturing Survey
Jobless Claims
New Home Sales
New Residential Construction
Pending Home Sales
Personal Income and Outlays
PPI
Retail Sales
TIC Data
Trade Balance

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Graph of the Credit market and stock market:

The Graph of the Credit market and stock market


If there was any doubt to the dollar’s primary fundamental driver, the currency would forge a new 14 year low on a trade weighted basis and against its European counterpart while the Dow officially climbed above the 10,000-mark.
Investor sentiment is keeping the greenback held down while a current of optimism sweeps the markets higher. However, caution warrants a review of not only the dollar’s role as the financial whipping boy but also the endurance of the market’s exuberance.

The Economy and the Credit Market

If there was any doubt to the dollar’s primary fundamental driver, the currency would forge a new 14 year low on a trade weighted basis and against its European counterpart while the Dow officially climbed above the 10,000-mark.
Investor sentiment is keeping the greenback held down while a current of optimism sweeps the markets higher. However, caution warrants a review of not only the dollar’s role as the financial whipping boy but also the endurance of the market’s exuberance.
To maintain its status as the premiere funding currency, the outlook for the US recovery and interest rates must be weaker than its liquid counterparts.
For the growth outlook, the world’s largest economy is on pace to emerge from recession at the same gait as most of its industrialized counterparts. Warnings from policy makers about measured expansion after growth readings turn positive is applicable to all. Realistically, the dollar’s downfall is yield. The Federal Reserve-set benchmark rate certainly has its influence; but investors are more concerned about real market rates.

With the US 3-month Libor trading at a discount to even the Japanese equivalent, funds are both cheap and abundant – traits at which to borrow from but not invest in. We will need to see speculative competitiveness to revive the dollar

USD Index Graphic Rewind

USD INDEX GRAPHIC REWIND:
The following graph shows the USD index

dated 10.15.2009

Financial and Capital Markets

The Financial and Capital Markets:

Everything in the capital markets seems to be giving traders the green light. The benchmarks for each of the major asset classes (the Dow for equities, crude and gold for commodities and the Australian dollar for FX)
are all forging new highs and the third quarter earnings season is already off to a strong start. Yet, at what point can we say a rally is running on irrational exuberance? This is always easy to point out in hindsight. Accelerated reversals highlight markets that were clearly running beyond their fundamentals means. However, during all the excitement, it is very difficult to call. A long-term and objective view of the underlying facts though does provide a better grounding.
The traditional capital markets are indeed at highs for the year and there are plenty of funds that have yet to make their way back into the speculative arena. Also for an outlook, growth is rebounding and expected levels of return are recovering alongside liquidity. On the other hand, the projections for expansion almost always come with a disclaimer that it will be temperate. What’s more, the strong earnings’ reports from financial firms seem to drive confidence beyond comparisons to the strength of previous years and questions as to the losses associated with building losses related to credit.

The Dow has finally surmounted the psychological, 10,000 barrier and

crude oil has climbed above $75 per barrel; but were these technical levels the only thing holding back the seven-month bull trend? Certainly not.
The attraction of such media friendly numbers often draws markets higher to relieve tension. Yet, at this point, we have seen a 55 percent rally in the US equities market and a 134 percent advance in crude in this relatively short period.


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Top 10 Myths about Forex:

Forex is a market where exchange of one currency with another currency takes place. It’s the market which provides accessibility and liquidity to the traders to buy and sell one foreign currency in exchange of another.
Forex traders seek profit in buying currencies low and selling them high. This kind of trading became more popular with the widespread of the on-line Forex brokers. There is a lot of information available about Forex on the web. However there also many myths surrounding the foreign exchange market:

1...

Forex trading is easy. Many people that want to dive into the world of the foreign exchange arket believe that the Forex trading is easy — you just read a book or two and then you will be able to earn daily profits with just 2-3 hours trading daily. Others think that they can buy a profitable strategy and it will make them rich in Forex. In reality that’s just a myth. Succeeding in Forex isn’t easier than mastering any other profession — it takes time, money and a lot of practice.

2...

"I will make money in Forex, if I can trade stocks successfully." Success in stock market doesn’t imply that you will get success in Forex market — there are many differences between trading stocks and the spot currencies. First of all, Forex market requires a lot of hard work and dedication as this market is open for 24 hours a day. You cannot just sit in front of your computer for the whole day and night, so the best way is that you should find the most suitable time periods for trading. Second, “buy&hold„ strategy simply won’t work in Forex market. Third, you don’t have that much information about currencies as you can get from the companies’ reports and statistics.

3...

"I can make profit whenever I want if Forex market is open 24 hours a day." Once again, you won’t be sitting in front of your PC for the whole day to be able to trade 24 hours. You’ll have to develop automated trading software to get the advantage of 24 hours a day working schedule.

4...

"I can be a successful Forex trader just following someone else’s signals." Many beginning traders get burned by the blind signal-following. That’s like putting away the whole responsibility for your actions to someone else. That may sound cool, but in reality you end up with the huge losses. Learn to rely on your own knowledge and skills. Remember that there were no great signal-followers in any financial market.

5...

No commission is to be paid in Forex market. You only have to pay the spread, but you don’t have to pay the commission. And what’s spread? It is the difference between the buy and sell price of the currency pair at the same moment. You may end up with the major part of your profits in the broker’s hands if you plan to rely on the short-term trading.

6...

Forex is a scam. Some skeptics and disappointed traders think that Forex is just some new fad to scam people for their hard earned money. Although there are many scams that are hiding behind the "brand" of Forex, that doesn’t mean that the Forex itself is a scam. There are many institutional Forex brokers, regulated Forex account managers and other solid companies in the market to whom you can trust.

7...

"I need to exactly predict the market outcome to be profitable in Forex." There is no scientific method to know something in advance in the market with a 100% certainty. There would be no Forex market if you could know the exact currency rates beforehand. Trading is not the game of certainties; it’s a game of odds. One of the first things that new traders learn is to think in the terms of probabilities and risk-to-reward ratios.

8...

"I need to use a very complex strategy to be successful in Forex." It’s a popular myth, in which many on-line sellers would want you to believe. The main requirement to be successful in Forex is a self-discipline and money management. There are many traders that make consistent profits with rather simple and old strategies.

9...

"I need to have a lot of starting capital to get profit in Forex." Big capital investment won’t help
you in Forex. You don’t need a lot of money to diversify in currencies and you can’t move the currency rates with your trading orders (you’d need billions of dollars to do that). Actually you can trade with a very a little capital, because Forex trading is almost always leveraged with the broker’s money.

10...

Forex is gambling because it’s completely random. Although there is no certainty in Forex (as in any financial market) it doesn’t mean that it’s completely random. And it’s certainly not a gambling, since your success in this market depends mostly on your skills and experience, not on your luck.

Knowledge is power — so it’s better for you to learn distinguishing some stereotypical myths from the real thing. Don’t fall for the promises of getting some easy profits in Forex, but don’t be afraid of the market just because some people think it’s not possible to earn there. Be rational — this quality will help you either if you are going to trade in Forex or not.

G20 Fades:

Risk Aversion Returns to Forex as Hope from G20 Fades


The period leading up to the G 20 meeting was generally marked by optimism and hopefulness. One commentator urged his readers: “Don’t write off the London G20 meeting. It could lay the foundations for fundamental global change, impacting currencies , gold and bond markets . ”


Investors rejoiced and the markets rallied, with the Dow rising above 8000 points and capping “the best four-week rally since the week ending May 1 2 , 1 9 3 3 .” Bulls can now retort that the stock market bust of 1929 took four years to recover, while the recession of 2008-2009 required less than one year. Forex markets also reacted “positively” to the G20 summit, lifting the Dollar above the important psychological barrier of 100 Yen / USD, and causing emerging market currencies to rise across the board.

Investors rejoiced and the markets rallied , with the Dow rising above 8000 points and capping “the best four-week rally since the week ending May 12, 1933.” Bulls can now retort that the stock market bust of 1929 took four years to recover, while the recession of 2008-2009 required less than one year. Forex markets also reacted “positively” to the G20 summit, lifting the Dollar above the important psychological barrier of 100
Yen / USD, and causing emerging market currencies to rise across the board.

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Forex Trading:

What is Forex Trading ?

Whether you have heard the term and you are merely curious or you are in a place where you think that you might want to do some investing yourself,

you'll find that taking a look at Forex trading is something that is quite important. Although all the talk about trading futures and spot markets may initially sound a little complicated, you will find that one of the reasons why so many people get involved in Forex trading is because it is quite straightforward.When you are looking at Forex trading it is first important to understand what happens to currencies when it needs to travel between companies . For instance, say that you are someone who has goods that they would like to sell in a foreign country. When you get to that country, you will find that trading your own currency into the local currency is something that you have to do.

You wouldn't be able to use your local money in a foreign country. The safest and most straightforward way to play the Forex market is on the spot market, where currencies are bought and sold according to what they are worth that day. The price is determined in many factors, but essentially, it is two parties exchanging different currencies of equivalent amount. The forwards market and the futures market , on the other hand, deal in contracts that offer a future date for settlement on a specific currency type with a specific price per unit.
This is a significantly more speculative market, and it can be much easier to lose a great deal of cash. A deal in a forwards market wil have both parties figuring out the terms between themselves

Factors of Online Forex Trade

• The value of a country's currency is influenced by a number of factors: The economics of the country, its trade deficit , political and social environment.If the current government's deficit increases,
  
• its currency's value will fall. As the government decreases its deficit , the currency can begin to recover value and the exchange rate will become more favorable. The same relationship holds true with a country's trade deficit. If the country
  

imports more goods and services than it exports

it will have a negative influence on the currency. Inflation lessens the ability of a unit of currency to buy less and less , so the currency loses value. If the inflation becomes rampant the currency is valued less because it's also viewed as unstable. As the rate of inflation begins to decline the currency begins to increase in value.Politics and social changes can play havoc with the currency exchange rates. Changes in the regime that are viewed negatively can lower the value of the country's currency in the short term and continue into the long term..

• Many US industries are dependent on oil and an increase in the price of oil means an increase in their expenses and a drop in profits. In a similar way, a country's dependency on oil influences how the country's currency is valued and will be impacted by changes in oil prices. The US's dependency on oil makes the dollar more sensitive to oil prices than countries who aren't so dependent. As the price of oil increases the value of the dollar drops. The opposite can happen. Current government officials can make policy changes that are viewed positively by the rest of the world and that can increase the value of the currency.For the United States, interest rates and the price of oil can have a major impact on the value of the US dollar.Interest rates effect how much it's going to cost to borrow money and how much can be earned on investments. Historically if the US raises its interest rates it attracts foreign investors. Those investors have to sell their own currency in order to buy U.S. dollars to purchase treasury bonds. If the interest begins to drop, or the perception is that the rates won't rise any more, investors may purchase Euros as an alternative investment which lowers the value of the US dollar.

• The United States is dependent on foreign oil production

The FOREX market..

The FOREX market is unique, in the UK there is no central exchange, we trade via the inter bank market. With more and more private individuals taking up margin trading and new forex brokers setting up, I can only see the market grow in the near future .

• There is less to consider when trading the forex markets, there are only a number of variables that affect the pricing.
• Main advantages include
• Forex Market allows 24 hour trading
• Greater leverage — with most brokers offering 100 — 1,
• Less starting capital required,
• More Liquidity — day trading has to have enough volume to make it worth our while. The currency market is more liquid than all the world stock markets put together. Currencies are always in action,
• Free trading systems
• Better for shorting — There are artificial controls built into the market to prevent it from going down too fast. The reason is that we live in a biased world that likes to see things go up instead of down. One of these artificial contraptions is the "uptick rule," which comes into play when shorting stocks, making it more difficult to sell a stock short than to buy it. This is unheard of in the currency market. Selling currencies short while day trading is just as easy as buying them.

With all these advantages, traders are finding it hard not to trade currencies, online trading volumes across all products is increasing at a substantial rate, however forex trading, predominantly amongst retail investors is becoming very popular.

Technical Analysis has come a long way , more and more forex provides now have partnerships with firms who provide analysis. However the banks still have an advantage, the markets are still not under perfectly competitive economic model. The banks will always have access to information that is not readily available, IS forex currently sources its information from a number of banks to fill this gap.

When Forex trading born..

The Foreign Exchange Market was established in 1971 with the abolishment of fixed currency exchanges. Currencies became valued at 'floating' rates determined by supply and demand. The Forex grew steadily throughout the 1970's, but with the technological advances of the 80's Forex grew from trading levels of $70 billion a day to the current level of $1.5 trillion.

The Forex is made up of about 5000 trading institutions such as international banks, central government banks (such as the US Federal Reserve), and commercial companies and brokers for all types of foreign currency exchange. There is no centralized location of Forex — major trading centers are located in New York , Tokyo , London, Hong Kong, Singapore, Paris, and Frankfurt, and all trading is by telephone or over the Internet. Businesses use the market to buy and sell products in other countries, but most of the activity on the Forex is from currency traders who use it to generate profits from small movements in the market.

About Forex exchange market ...

The Foreign Exchange Market — better known as Forex — is a world wide market for buying and selling currencies. It handles a huge volume of transactions 24 hours a day, 5 days a week. Daily exchanges are worth approximately $1.5 trillion (US dollars). In comparison, the United States Treasury Bond market averages $300 billion a day and American stock markets exchange about $100 billion a day.

Forex trading deffination....

Forex trading is nothing more than direct access trading of different types of foreign currencies. In the past, foreign exchange trading was mostly limited to large banks and institutional traders. However recent technological advancements have made it so that small traders can also take advantage of the many benefits of forex trading just by using the various online trading platforms to trade.

The currencies of the world are on a floating exchange rate, and they are always traded in pairs. About 85 percent of all daily transactions involve trading of the major currencies. Four major currency pairs are usually used for investment purposes. They are: Euro against US dollar (EUR/USD), US dollar against Japanese yen (USD/JPY), British pound against US dollar (GBP/USD) and US dollar against Swiss franc (USD/CHF).

If you think one currency will appreciate against another, you may exchange that second currency for the first one and be able to "stay" in it. If everything goes as you plan it, eventually you may be able to make the opposite deal in that you may exchange this first currency back for that other and then collect profits from it. As a note bear in mind that no dividends are paid on currencies.

Transactions on the FOREX market are performed by dealers at major banks or FOREX brokerage companies . FOREX is a necessary part of the worldwide market, so when you are sleeping in the comfort of your bed, the dealers in Europe are trading currencies with their Japanese counterparts. Therefore, the FOREX market is active 24 hours a day and dealers at major institutions are working 24/7 in three different shifts. Clients may place take-profit and stop-loss orders with brokers for overnight execution. Price movements on the FOREX market are very smooth and without the gaps that you face almost every morning on the stock market. The daily turnover on the FOREX market is somewhere around $1.2 trillion, so a new investor can enter and exit positions without any problems ..


Today , foreign exchange market brokers are able to break down the larger sized inter-bank units, and offer small traders like you and me the opportunity to buy or sell any number of these smaller units. These brokers give any size trader , including individual speculators or smaller companies, the option to trade at the same rates and price movements as the big players who once dominated the market........