The foreign exchange, or forex, market is relatively young, having begun in the early 1970s after the United States dropped the gold standard and national currencies started to fluctuate widely. For about 30 years prior to that, most nations had agreed to keep their currency values stable in relation to the U.S. dollar, making a forex market unnecessary. With that no longer the case, banks quickly realized that a profit could be made in “buying” currency when it was devalued and “selling” it after it strengthened, just like any other commodity.
Today, the forex market handles about $1.9 trillion in transactions every day, and it runs 24 hours a day, five days a week. (With nations around the world involved, it’s always daytime somewhere.) The most traded currencies are the U.S. dollar, the euro, Japanese yen, British pound, Swiss franc and Australian dollar.
The forex market is overwhelmingly dominated by international banks, government banks, investment banks, corporations, and hedge funds. In fact, individual traders account for only about 2 percent of the market. Nonetheless, a lot of people do try their hand at it, with varying degrees of success.
In the forex market, transactions are always handled in pairs: You buy one currency and sell another one. The idea is to make a trade when you believe the currency you’re buying is going to go up in value compared to the one you’re selling. Then, if it turns out your prediction was correct, you do another trade in the reverse direction -- selling the currency you originally bought and buying the one you sold -- in order to reap the profits.
For example, let’s say the market reports this: GBP/EUR 1.2200. That means the cost of buying one British pound is 1.22 euros. If you believed that course was going to change, and the euro was going to become more valuable than the pound, you might sell 100,000 pounds, buy 100,000 euros, and wait. Then let’s say a few weeks later, the exchange rate fluctuates to this: EUR/GBP 1.3100. Sure enough, the euro is now worth 1.31 pounds, a profit of 0.11 per unit.
The forex market is vast and daunting and mostly inhabited by giant organizations. But it can be navigated by individuals who have studied the finer points and who want to take a risk on something potential profitable. And since the whole world uses money, the trading of that money is always going to be a major force in the financial world.
Saturday, February 14, 2009
Friday, February 13, 2009
What is a Forex Broker
A Forex broker is very similar to a stock broker, and many new online Forex brokerages have recently emerged. The key difference is that Forex brokers deal only in currency exchange investments.
Similar to securities brokerages, Forex brokers come in all sizes, shapes, and levels of service. An online Forex broker provides minimal service at minimal cost. If you require more advice and expert guidance, there are many full service Forex brokers available, as well.
If you do go with an online broker, make sure that you choose one that has an extensive online knowledge base and 24/7 support so that you can execute all trades wisely, and quickly.
India on the rise with economy Booming
The world's most populous democracy has jumbo growth prospects. Here's how to invest now.
For the 12 months ending March 31, 2005, foreign investment in India was an estimated $13.5 billion. That's on top of $16 billion invested in the same period a year earlier. Private-investment giant Blackstone Group has announced plans to open an office in Mumbai and invest up to $1 billion in India. And the Sensex, the index of the Mumbai stock exchange, has surged 72% over the past year.
What's behind the rising interest in India? Some cite the rapid growth in outsourcing, the practice of hiring third-party companies to handle functions that companies used to manage in-house. Indian companies such as Infosys and Wipro have turned the outsourcing trend into an offshoring boom--and attracted U.S. investors starved for growth. Sales and earnings at Infosys, for example, grew more than 40% in its last fiscal year, and its American depositary receipts--ADRs are certificates that trade on a U.S. exchange and represent foreign shares--are up 12% this year.
The outsourcing phenomenon has, in turn, created good jobs in India and given a boost to a growing middle class of consumers who are buying homes, cars, and expensive consumer goods--a big change for the world's second-most-populous nation. Samir Mehta, who manages the Eaton Vance Greater India fund, says that just ten years ago college grads lived with their parents, rarely owned cars, and paid for everything in cash. Now, he says, young professionals are taking out mortgages and acquiring credit. And because India is a young, educated country--half the population is under the age of 25--analysts expect demand for goods and services such as banking, telecommunications, and cars will grow dramatically in the next ten to 15 years.
And while China continues to be the world's fastest-growing major economy--its gross domestic product rose more than 9% last year--India is no slouch: GDP has been growing 6% to 7% annually. Moreover, many investors think India's democratic government and huge English-speaking population will give it an edge over China and other rising nations in doing business with Western corporations. "Everybody knows about the terrific growth," says Prakash Melwani, a senior managing director with Blackstone. "In India, one has the rule of law, the democracy. We felt we had real downside protection."
Individual investors have a couple of ways to bet on India. The government limits direct investment in shares of Indian companies to registered investors. That means that most individuals must either invest in a fund that buys Indian stocks (more on that in a moment) or buy one of a handful of Indian stocks with ADRs. Money-management professionals say investors interested in the latter strategy should consider a pair of financial institutions that offer a simple way to bet on the continued growth of the overall Indian economy: HDFC Bank (HDB, $48) and ICICI Bank (IBN, $22). Both companies are benefiting from Indians' desires to own homes and establish credit.
HDFC started out as a corporate bank, but it began lending to consumers three years ago and has been adding more than 100 branches a year. Eaton Vance's Mehta says the company is managed much more like an American bank--a number of its founding executives came from Citibank--than a government-run entity. He admits the stock is not cheap: It trades at about 3.3 times book value and roughly 20 times estimated earnings for fiscal 2006. However, HDFC has consistently delivered 25% to 30% earnings growth, a trend Mehta expects to continue for the next three to five years.
But ICICI may be the better bargain. A consumer-oriented bank, it too is riding India's newfound consumerism and frenzy for real estate. Fiscal-fourth-quarter earnings increased 35%, thanks to strong lending growth and a big income boost from banking and other fees. But the stock trades at just 15 times 2006 estimated earnings--a price/earnings ratio closer to those of less entrepreneurial state-owned banks. This "is unrealistic," a recent Morgan Stanley note said, "given ICICI Bank's better quality income stream."
For those looking to cash in on outsourcing, most analysts recommend buying software and services giant Infosys Technologies (INFY, $77). Indeed, fund managers liken it to General Electric and other U.S. stalwarts: It is simply a must for any India portfolio. And while the company is trading at a lofty 38 times estimated earnings for fiscal 2006, fans say it still isn't too late to buy in. "It is the bellwether stock of the Indian market and one of the best- managed companies in the tech sector," says Nishid Shah, chief investment officer of Birla Sun Life Asset Management Co., which manages the Excel India fund.
Offshoring has come under attack from unions and politicians in the U.S., but analysts believe U.S. companies will continue to look for ways to reduce costs by shipping work overseas. Perhaps the biggest risk for Infosys is price competition from rival Indian outsourcing companies. Indeed, Mark Bickford-Smith, co-manager of the T. Rowe Price International Stock fund, likes Infosys. But he favors shares of rival I-flex, a smaller tech company that Bickford-Smith thinks has greater growth potential. Most of us can't buy I-flex directly, though, because it is one of the many up-and-coming Indian companies that don't yet have ADRs trading on a U.S. exchange.
To get exposure to these lower-profile but fast-growing firms, investors should use a mutual fund. The question is how big a bet to place on India. "People don't need a fund devoted to just one country," says Arijit Dutta, a mutual fund analyst for Morningstar. He likes T. Rowe Price New Asia fund (PRASX), which invests about 20% of its assets in India--enough to benefit from the economic growth but not so much that its performance is volatile. Its three-year annualized return is a healthy 20%, and its expense ratio is about half that of the average fund in its category.
If investors really want to embrace India fully, however, Dutta suggests Mehta's Eaton Vance Greater India (ETGIX), which invests at least 80% of its assets in the subcontinent. The fund has a steep 2.77% expense ratio but boasts a three-year annualized return of 40%. Another all-India portfolio with a similar record is the Morgan Stanley India Investment fund (IIF). The closed-end fund typically holds shares in some 40 Indian companies and trades like a stock on the New York Stock Exchange.
As hot as India is right now, is it a good idea to jump in right away? Ridham Desai, an Indian equity strategist for Morgan Stanley, thinks the Indian market is a bit overheated. He says there's a good chance it will come down 15% or so in the next year. "In my view, investors don't have to pull the trigger tomorrow morning," he says. "I think it may be a good time to visit ideas and prepare for better prices to come." But for investors who don't feel comfortable trying to time such a swing, there may be no moment like the present to make a long-term bet on India.
For the 12 months ending March 31, 2005, foreign investment in India was an estimated $13.5 billion. That's on top of $16 billion invested in the same period a year earlier. Private-investment giant Blackstone Group has announced plans to open an office in Mumbai and invest up to $1 billion in India. And the Sensex, the index of the Mumbai stock exchange, has surged 72% over the past year.
What's behind the rising interest in India? Some cite the rapid growth in outsourcing, the practice of hiring third-party companies to handle functions that companies used to manage in-house. Indian companies such as Infosys and Wipro have turned the outsourcing trend into an offshoring boom--and attracted U.S. investors starved for growth. Sales and earnings at Infosys, for example, grew more than 40% in its last fiscal year, and its American depositary receipts--ADRs are certificates that trade on a U.S. exchange and represent foreign shares--are up 12% this year.
The outsourcing phenomenon has, in turn, created good jobs in India and given a boost to a growing middle class of consumers who are buying homes, cars, and expensive consumer goods--a big change for the world's second-most-populous nation. Samir Mehta, who manages the Eaton Vance Greater India fund, says that just ten years ago college grads lived with their parents, rarely owned cars, and paid for everything in cash. Now, he says, young professionals are taking out mortgages and acquiring credit. And because India is a young, educated country--half the population is under the age of 25--analysts expect demand for goods and services such as banking, telecommunications, and cars will grow dramatically in the next ten to 15 years.
And while China continues to be the world's fastest-growing major economy--its gross domestic product rose more than 9% last year--India is no slouch: GDP has been growing 6% to 7% annually. Moreover, many investors think India's democratic government and huge English-speaking population will give it an edge over China and other rising nations in doing business with Western corporations. "Everybody knows about the terrific growth," says Prakash Melwani, a senior managing director with Blackstone. "In India, one has the rule of law, the democracy. We felt we had real downside protection."
Individual investors have a couple of ways to bet on India. The government limits direct investment in shares of Indian companies to registered investors. That means that most individuals must either invest in a fund that buys Indian stocks (more on that in a moment) or buy one of a handful of Indian stocks with ADRs. Money-management professionals say investors interested in the latter strategy should consider a pair of financial institutions that offer a simple way to bet on the continued growth of the overall Indian economy: HDFC Bank (HDB, $48) and ICICI Bank (IBN, $22). Both companies are benefiting from Indians' desires to own homes and establish credit.
HDFC started out as a corporate bank, but it began lending to consumers three years ago and has been adding more than 100 branches a year. Eaton Vance's Mehta says the company is managed much more like an American bank--a number of its founding executives came from Citibank--than a government-run entity. He admits the stock is not cheap: It trades at about 3.3 times book value and roughly 20 times estimated earnings for fiscal 2006. However, HDFC has consistently delivered 25% to 30% earnings growth, a trend Mehta expects to continue for the next three to five years.
But ICICI may be the better bargain. A consumer-oriented bank, it too is riding India's newfound consumerism and frenzy for real estate. Fiscal-fourth-quarter earnings increased 35%, thanks to strong lending growth and a big income boost from banking and other fees. But the stock trades at just 15 times 2006 estimated earnings--a price/earnings ratio closer to those of less entrepreneurial state-owned banks. This "is unrealistic," a recent Morgan Stanley note said, "given ICICI Bank's better quality income stream."
For those looking to cash in on outsourcing, most analysts recommend buying software and services giant Infosys Technologies (INFY, $77). Indeed, fund managers liken it to General Electric and other U.S. stalwarts: It is simply a must for any India portfolio. And while the company is trading at a lofty 38 times estimated earnings for fiscal 2006, fans say it still isn't too late to buy in. "It is the bellwether stock of the Indian market and one of the best- managed companies in the tech sector," says Nishid Shah, chief investment officer of Birla Sun Life Asset Management Co., which manages the Excel India fund.
Offshoring has come under attack from unions and politicians in the U.S., but analysts believe U.S. companies will continue to look for ways to reduce costs by shipping work overseas. Perhaps the biggest risk for Infosys is price competition from rival Indian outsourcing companies. Indeed, Mark Bickford-Smith, co-manager of the T. Rowe Price International Stock fund, likes Infosys. But he favors shares of rival I-flex, a smaller tech company that Bickford-Smith thinks has greater growth potential. Most of us can't buy I-flex directly, though, because it is one of the many up-and-coming Indian companies that don't yet have ADRs trading on a U.S. exchange.
To get exposure to these lower-profile but fast-growing firms, investors should use a mutual fund. The question is how big a bet to place on India. "People don't need a fund devoted to just one country," says Arijit Dutta, a mutual fund analyst for Morningstar. He likes T. Rowe Price New Asia fund (PRASX), which invests about 20% of its assets in India--enough to benefit from the economic growth but not so much that its performance is volatile. Its three-year annualized return is a healthy 20%, and its expense ratio is about half that of the average fund in its category.
If investors really want to embrace India fully, however, Dutta suggests Mehta's Eaton Vance Greater India (ETGIX), which invests at least 80% of its assets in the subcontinent. The fund has a steep 2.77% expense ratio but boasts a three-year annualized return of 40%. Another all-India portfolio with a similar record is the Morgan Stanley India Investment fund (IIF). The closed-end fund typically holds shares in some 40 Indian companies and trades like a stock on the New York Stock Exchange.
As hot as India is right now, is it a good idea to jump in right away? Ridham Desai, an Indian equity strategist for Morgan Stanley, thinks the Indian market is a bit overheated. He says there's a good chance it will come down 15% or so in the next year. "In my view, investors don't have to pull the trigger tomorrow morning," he says. "I think it may be a good time to visit ideas and prepare for better prices to come." But for investors who don't feel comfortable trying to time such a swing, there may be no moment like the present to make a long-term bet on India.
Top Most Tradeable Currencies
1. U.S. Dollar (USD)
Central Bank: Federal Reserve (Fed)
Created in 1913 by the Federal Reserve Act, the Federal Reserve System (also called the Fed) is the central banking body of the U.S. The system is itself headed by a chairman and board of governors, with most of the focus being placed on the branch known as the Federal Open Market Committee (FOMC). The FOMC supervises open market operations as well as monetary policy or interest rates.
The current committee is comprised of five of the 12 current Federal Reserve Bank presidents and seven members of the Federal Reserve Board, with the Federal Reserve Bank of New York always serving on the committee. Even though there are 12 voting members, non-members (including additional Fed Bank presidents) are invited to share their views on the current economic situation when the committee meets every six weeks.
Sometimes referred to as the greenback, the U.S. dollar (USD) is the home denomination of the world's largest economy, the United States. As with any currency, the dollar is supported by economic fundamentals, including gross domestic product, and manufacturing and employment reports. However, the U.S. dollar is also widely influenced by the central bank and any announcements about interest rate policy. The U.S. dollar is a benchmark that trades against other major currencies, especially the euro, Japanese yen and British pound.
2. European Euro (EURO)
Central Bank: European Central Bank (ECB)
Headquartered in Frankfurt, Germany, the European Central Bank is the central bank of the 15 member countries of the Eurozone. In similar fashion to the United States' FOMC, the ECB has a main body responsible for making monetary policy decisions, the Executive Council, which is composed of five members and headed by a president. The remaining policy heads are chosen with consideration that four of the remaining seats are reserved for the four largest economies in the system, which include Germany, France, Italy and Spain. This is to ensure that the largest economies are always represented in the case of a change in administration. The council meets approximately 10 times a year.
3. Japanese Yen (JPY)
Central Bank: Bank of Japan (JoP)
Established as far back as 1882, the Bank of Japan serves as the central bank to the world's second largest economy. It governs monetary policy as well as currency issuance, money market operations and data/economic analysis. The main Monetary Policy Board tends to work toward economic stability, constantly exchanging views with the reigning administration, while simultaneously working toward its own independence and transparency. Meeting 12-14 times a year, the governor leads a team of nine policy members, including two appointed deputy governors.
The Japanese yen (JPY) tends to trade under the identity of a carry trade component. Offering a low interest rate, the currency is pitted against higher-yielding currencies, especially the New Zealand and Australian dollars and the British pound. As a result, the underlying tends to be very erratic, pushing traders to take technical perspectives on a longer-term basis. Average daily ranges are in the region of 30-40 pips, with extremes as high as 150 pips. To trade this currency with a little bit of a bite, focus on the crossover of London and U.S. hours (6am - 11am EST).
4. British Pound (GBP)
Central Bank: Bank of England (BoE)
As the main governing body in the United Kingdom, the Bank of England serves as the monetary equivalent of the Federal Reserve System. In the same fashion, the governing body establishes a committee headed by the governor of the bank. Made up of nine members, the committee includes four external participants (appointed by the Chancellor of Exchequer), a chief economist, director of market operations, committee chief economist and two deputy governors.
A little bit more volatile than the euro, the British pound (GBP, also sometimes referred to as "pound sterling" or "cable") tends to trade a wider range through the day. With swings that can encompass 100-150 pips, it isn't unusual to see the pound trade as narrowly as 20 pips. Swings in notable cross currencies tend to give this major a volatile nature, with traders focusing on pairs like the British pound/Japanese yen and the British pound/Swiss franc. As a result, the currency can be seen as most volatile through both London and U.S. sessions, with minimal movements during Asian hours (5pm - 1am EST).
5. Swiss Franc (CHF)
Central Bank: Swiss National Bank (SNB)
Different from all other major central banks, the Swiss National Bank is viewed as a governing body with private and public ownership. This belief stems from the fact that the Swiss National Bank is technically a corporation under special regulation. As a result, a little over half of the governing body is owned by the sovereign states of Switzerland. It is this arrangement that emphasizes the economic and financial stability policies dictated by the governing board of the SNB. Smaller than most governing bodies, monetary policy decisions are created by three major bank heads who meet on a quarterly basis.
Similar to the euro, the Swiss franc (CHF) hardly makes significant moves in the any of the individual sessions. As a result, look for this particular currency to trade in the average daily range of 35 pips per day. High-frequency volume for this currency is usually pitted for the London session (2am - 8am EST).
6. Canadian Dollar (CAD)
Central Bank: Bank of Canada (BoC)
Established by the Bank of Canada Act of 1934, the Bank of Canada serves as the central bank called upon to "focus on the goals of low and stable inflation, a safe and secure currency, financial stability and the efficient management of government funds and public debt." Acting independently, Canada's central bank draws similarities with the Swiss National Bank because it is sometimes treated as a corporation, with the Ministry of Finance directly holding shares. Despite the proximity of the government's interests, it is the responsibility of the governor to promote price stability at an arm's length from the current administration, while simultaneously considering the government's concerns. With an inflationary benchmark of 2-3%, the BoC has tended to remain a shade more hawkish rather than accommodative when it comes to any deviations in prices.
Keeping in touch with major currencies, the Canadian dollar (CAD) tends to trade in similar daily ranges of 30-40 pips. However, one unique aspect about the currency is its relationship with crude oil, as the country remains a major exporter of the commodity. As a result, plenty of traders and investors use this currency as either a hedge against current commodity positions or pure speculation, tracing signals from the oil market.
7. Australian/New Zealand Dollar (AUD/NZD)
Central Bank: Reserve Bank of Australia/Reserve Bank of New Zealand (RBA/RBNZ)
Offering one of the higher interest rates in the major global markets, the Reserve Bank of Australia has always upheld price stability and economic strength as cornerstones of its long-term plan. Headed by the governor, the bank's board is made up of six members-at-large, in addition to a deputy governor and a secretary of the Treasury. Together, they work toward to target inflation between 2-3%, while meeting nine times throughout the year. In similar fashion, the Reserve Bank of New Zealand looks to promote inflation targeting, hoping to maintain a foundation for prices.
Both currencies have been the focus of carry traders, as the Australian and New Zealand dollars (AUD and NZD) offer the highest yields of the seven major currencies available on most platforms. As a result, volatility can be experienced in these pairs if a deleveraging effect takes place. Otherwise, the currencies tend to trade in similar averages of 30-40 pips, like other majors. Both currencies also maintain relationships with commodities, most notably silver and gold.
8. South African Rand (ZAR)
Central Bank: South African Reserve Bank (SARB)
Previously modeled on the United Kingdom's Bank of England, the South African Reserve Bank stands as the monetary authority when it comes to South Africa. Taking on major responsibilities similar to those of other central banks, the SARB is also known as a creditor in certain situations, a clearing bank and major custodian of gold. Above all else, the central bank is in charge of "the achievement and maintenance of price stability". This also includes intervention in the foreign exchange markets when the situation arises.
Interestingly enough, the South African Reserve Bank remains a wholly owned private entity with more than 600 shareholders that are regulated by owning less than 1% of the total number of outstanding shares. This is to ensure that the interests of the economy precede those of any private individual. To maintain this policy, the governor and 14-member board head the bank's activities and work toward monetary goals. The board meets six times a year.
Seen as relatively volatile, the average daily range of the South African rand (ZAR) can be as high as 1,000 pips. But don't let the wide daily range fool you. When translated into dollar pips, the movements are equivalent to an average day in the British pound, making the currency a great pair to trade against the U.S. dollar (especially when taking into consideration the carry potential). Traders also consider the currency's relationship to gold and platinum. With the economy being a world leader when it comes to exports of both metals, it is only natural to see a correlation similar to that between the CAD and crude oil. As a result, consider the commodities markets in creating opportunities when economic data is scant.
The most common currency pairs traded in the forex market
There are many official currencies that are used all over the world, but there only a handful of currencies that are traded actively in the forex market. In currency trading, only the most economically/politically stable and liquid currencies are demanded in sufficient quantities. For example, due to the size and strength of the United States economy, the American dollar is the world's most actively traded currency.
In general, the eight most traded currencies (in no specific order) are the U.S. dollar (USD), the Canadian dollar (CAD), the euro (EUR), the British pound (GBP), the Swiss franc (CHF), the New Zealand dollar (NZD), the Australian dollar (AUD) and the Japanese yen (JPY).
Currencies must be traded in pairs. Mathematically, there are 27 different currency pairs that can be derived from those eight currencies alone. However, there are about 18 currency pairs that are conventionally quoted by forex market makers as a result of their overall liquidity. These pairs are:
The total amount of currency trading involving these 18 pairs represents the majority of the trading volume in the FX market. This manageable number of choices makes trading a lot less complicated compared to dealing with equities, which has thousands of possible choices to choose from.
In general, the eight most traded currencies (in no specific order) are the U.S. dollar (USD), the Canadian dollar (CAD), the euro (EUR), the British pound (GBP), the Swiss franc (CHF), the New Zealand dollar (NZD), the Australian dollar (AUD) and the Japanese yen (JPY).
Currencies must be traded in pairs. Mathematically, there are 27 different currency pairs that can be derived from those eight currencies alone. However, there are about 18 currency pairs that are conventionally quoted by forex market makers as a result of their overall liquidity. These pairs are:
The total amount of currency trading involving these 18 pairs represents the majority of the trading volume in the FX market. This manageable number of choices makes trading a lot less complicated compared to dealing with equities, which has thousands of possible choices to choose from.
Wednesday, February 11, 2009
Australian Securities Exchange
The exchange began as six separate exchanges established in the state capitals Melbourne (1861), Sydney (1871), Hobart (1882), Brisbane (1884), Adelaide (1887) and Perth (1889).[2] An exchange in Launceston merged into the Hobart exchange too.The first interstate conference was held in 1903 at Melbourne Cup time. The exchanges then met on an informal basis until 1937 when the Australian Associated Stock Exchanges (AASE) was established, with representatives from each exchange. Over time the AASE established uniform listing rules, broker rules, and commission rates.
Trading was conducted by a call system, where an exchange employee called the names of each company and brokers bid or offered on each. In the 1960s this changed to a post system. Exchange employees called "chalkies" wrote bids and offers in chalk on blackboards continuously, and recorded transactions made.
Abu Dhabi Securities Exchange
Abu Dhabi Securities Exchange (ADX) (formerly Adu Dhabi Securities Market) [ADSM] (Arabic: سوق أبوظبي للأوراق ألمالية) is a stock exchange in Abu Dhabi, United Arab Emirates (UAE). It was established on 15 November 2000 to trade shares of UAE companies. There are trading locations in Abu Dhabi, Al Ain, Fujeirah, Sharjah, and Ras Al Khaimah. The Dubai Financial Market (DFM) is a different exchange that trades shares of other public UAE companies but investors can also trade ADSM shares with some of the brokers based at DFM.The ADSM has more companies listed than DFM but trading volume is usually much less. During 2004-2005 there was a substantial increase in share prices and trading activity. From the end of 2005 through until mid-2006 there was a significant downturn with the overall ADSM index dropping just over 30% in the first six months of 2006.
Online Forex Trading in World Stock Exchange
Stock Exchanges Worldwide Links is a list of world's major stock exchanges
and other exchange resources. The number of stock exchanges in the world is
growing rapidly, so we maynot be able to track all of their pages. If you
know of any stock exchange WWW sites not included in this list.
African Stock Exchanges
GhanaStock Exchange, Ghana
Johannesburg Stock Exchange, South
Africa
The South African Futures Exchange(SAFEX),
South Africa
Asian Stock Exchanges
Sydney Futures Exchange, Australia
Australian Stock Exchanges, Australia
Shenzhen Stock
Exchange, China
Stock Exchange of Hong Kong,Hong Kong
Hong Kong Futures Exchange,Hong Kong
National Stock Exchange of India,India
Bombay Stock Exchange, India
Jakarta Stock Exchange, Indonesia
Indonesia NET Exchange,Indonesia
Nagoya Stock Exchange,Japan
Osaka Securities Exchange, Japan
Tokyo Grain Exchange, Japan
Tokyo International Financial Futures
Exchange (TIFFE), Japan
Tokyo Stock Exchange, Japan
Korea Stock Exchange, Korea
Kuala Lumpur Stock Exchange, Malaysia
New Zealand Stock Exchange, New Zealand
Karachi Stock Exchange, Pakistan
Lahore Stock Exchange, Pakistan
Stock Exchange of Singapore (SES),
Singapore
Singapore International Monetary Exchange
Ltd. (SIMEX), Singapore
Colombo Stock Exchange, Sri Lanka
Sri Lanka Stock Closings,
Sri Lanka
Taiwan Stock Exchange, Taiwan
The Stock Exchange of Thailand, Thailand
European Stock Exchanges
Vienna Stock Exchange,
Austria
EASDAQ, Belgium
Zagreb Stock Exchange, Croatia
Prague Stock Exchange,
Czech Republic
Copenhagen Stock Exchange, Denmark
Helsinki Stock Exchange,
Finland
Paris
Stock Exchange, France
LesEchos:
30-minute delayed prices, France
NouveauMarche, France
MATIF, France
Frankfurt Stock Exchange,
Germany
Athens Stock Exchange, Greece
Budapest Stock
Exchange, Hungary
Italian Stock Exchange, Italy
National Stock Exchange of Lithuania,Lithuania
Macedonian Stock Exchange, Macedonia
Amsterdam Stock Exchange, The
Netherlands
Oslo Stock
Exchange, Norway
Warsaw Stock-Exchange, Poland
Lisbon Stock Exchange, Portugal
Bucharest Stock Exchange, Romania
Russian Securities
Market News, Russia
Ljubljana Stock
Exchange,Inc., Slovenia
Barcelona Stock Exchange, Spain
Madrid Stock Exchange,
Spain
MEFF: (Spanish Financial Futures & Options
Exchange), Spain
Stockholm Stock Exchange,
Sweden
Swiss Exchange, Switzerland
Istanbul Stock Exhange, Turkey
FTSE International (London Stock Exchange),
United Kingdom
London Stock
Exchange: Daily Price Summary, United Kingdom
Electronic Share Information,
UnitedKingdom
London Metal Exchange,United
Kingdom
London InternationalFinancial
Futures and Options Exchange, United Kingdom
Middle Eastern Stock Exchanges
Tel Aviv Stock Exchange, Israel
Amman Financial Market, Jordan
Beirut Stock
Exchange, Lebanon
Palestine Securities Exchange, Palestine
Istanbul Stock Exhange, Turkey
North American Stock Exchanges
Alberta Stock Exchange, Canada
Montreal Stock Exchange, Canada
Toronto Stock Exchange, Canada
Vancouver Stock Exchange, Canada
Winnipeg Stock Exchange, Canada
Canadian Stock Market Reports, Canada
Canada Stockwatch, Canada
Mexican Stock
Exchange, Mexico
AMEX, United States
New York Stock Exchange (NYSE),United
States
NASDAQ, United States
The Arizona Stock Exchange, United States
Chicago Stock Exchange,
United States
Chicago Board Options Exchange, United
States
Chicago Board of Trade, United States
Chicago Mercantile Exchange, United States
Kansas City Board of Trade, United States
Minneapolis Grain Exchange, United States
Pacific Stock Exchange, United
States
Philadelphia Stock Exchange, United
States
South American Stock Exchanges
Bermuda Stock Exchange, Bermuda
Rio de Janeiro Stock Exchange, Brazil
Sao Paulo Stock Exchange,
Brazil
Cayman
Islands Stock Exchange, Cayman Islands
Chile Electronic
Stock Exchange, Chile
Santiago Stock Exchange,
Chile
Bogota stock exchange, Colombia
Occidente Stock
exchange, Colombia
Guayaquil Stock Exchange,
Ecuador
Jamaica Stock
Exchange, Jamaica
Nicaraguan Stock Exchange, Nicaragua
Lima Stock Exchange, Peru
Trinidad and Tobago Stock Exchange,
Trinidad and Tobago
Caracas Stock Exchange,
Venezuela
Venezuela Electronic Stock Exchange,
Venezuela
and other exchange resources. The number of stock exchanges in the world is
growing rapidly, so we maynot be able to track all of their pages. If you
know of any stock exchange WWW sites not included in this list.
African Stock Exchanges
GhanaStock Exchange, Ghana
Johannesburg Stock Exchange, South
Africa
The South African Futures Exchange(SAFEX),
South Africa
Asian Stock Exchanges
Sydney Futures Exchange, Australia
Australian Stock Exchanges, Australia
Shenzhen Stock
Exchange, China
Stock Exchange of Hong Kong,Hong Kong
Hong Kong Futures Exchange,Hong Kong
National Stock Exchange of India,India
Bombay Stock Exchange, India
Jakarta Stock Exchange, Indonesia
Indonesia NET Exchange,Indonesia
Nagoya Stock Exchange,Japan
Osaka Securities Exchange, Japan
Tokyo Grain Exchange, Japan
Tokyo International Financial Futures
Exchange (TIFFE), Japan
Tokyo Stock Exchange, Japan
Korea Stock Exchange, Korea
Kuala Lumpur Stock Exchange, Malaysia
New Zealand Stock Exchange, New Zealand
Karachi Stock Exchange, Pakistan
Lahore Stock Exchange, Pakistan
Stock Exchange of Singapore (SES),
Singapore
Singapore International Monetary Exchange
Ltd. (SIMEX), Singapore
Colombo Stock Exchange, Sri Lanka
Sri Lanka Stock Closings,
Sri Lanka
Taiwan Stock Exchange, Taiwan
The Stock Exchange of Thailand, Thailand
European Stock Exchanges
Vienna Stock Exchange,
Austria
EASDAQ, Belgium
Zagreb Stock Exchange, Croatia
Prague Stock Exchange,
Czech Republic
Copenhagen Stock Exchange, Denmark
Helsinki Stock Exchange,
Finland
Paris
Stock Exchange, France
LesEchos:
30-minute delayed prices, France
NouveauMarche, France
MATIF, France
Frankfurt Stock Exchange,
Germany
Athens Stock Exchange, Greece
Budapest Stock
Exchange, Hungary
Italian Stock Exchange, Italy
National Stock Exchange of Lithuania,Lithuania
Macedonian Stock Exchange, Macedonia
Amsterdam Stock Exchange, The
Netherlands
Oslo Stock
Exchange, Norway
Warsaw Stock-Exchange, Poland
Lisbon Stock Exchange, Portugal
Bucharest Stock Exchange, Romania
Russian Securities
Market News, Russia
Ljubljana Stock
Exchange,Inc., Slovenia
Barcelona Stock Exchange, Spain
Madrid Stock Exchange,
Spain
MEFF: (Spanish Financial Futures & Options
Exchange), Spain
Stockholm Stock Exchange,
Sweden
Swiss Exchange, Switzerland
Istanbul Stock Exhange, Turkey
FTSE International (London Stock Exchange),
United Kingdom
London Stock
Exchange: Daily Price Summary, United Kingdom
Electronic Share Information,
UnitedKingdom
London Metal Exchange,United
Kingdom
London InternationalFinancial
Futures and Options Exchange, United Kingdom
Middle Eastern Stock Exchanges
Tel Aviv Stock Exchange, Israel
Amman Financial Market, Jordan
Beirut Stock
Exchange, Lebanon
Palestine Securities Exchange, Palestine
Istanbul Stock Exhange, Turkey
North American Stock Exchanges
Alberta Stock Exchange, Canada
Montreal Stock Exchange, Canada
Toronto Stock Exchange, Canada
Vancouver Stock Exchange, Canada
Winnipeg Stock Exchange, Canada
Canadian Stock Market Reports, Canada
Canada Stockwatch, Canada
Mexican Stock
Exchange, Mexico
AMEX, United States
New York Stock Exchange (NYSE),United
States
NASDAQ, United States
The Arizona Stock Exchange, United States
Chicago Stock Exchange,
United States
Chicago Board Options Exchange, United
States
Chicago Board of Trade, United States
Chicago Mercantile Exchange, United States
Kansas City Board of Trade, United States
Minneapolis Grain Exchange, United States
Pacific Stock Exchange, United
States
Philadelphia Stock Exchange, United
States
South American Stock Exchanges
Bermuda Stock Exchange, Bermuda
Rio de Janeiro Stock Exchange, Brazil
Sao Paulo Stock Exchange,
Brazil
Cayman
Islands Stock Exchange, Cayman Islands
Chile Electronic
Stock Exchange, Chile
Santiago Stock Exchange,
Chile
Bogota stock exchange, Colombia
Occidente Stock
exchange, Colombia
Guayaquil Stock Exchange,
Ecuador
Jamaica Stock
Exchange, Jamaica
Nicaraguan Stock Exchange, Nicaragua
Lima Stock Exchange, Peru
Trinidad and Tobago Stock Exchange,
Trinidad and Tobago
Caracas Stock Exchange,
Venezuela
Venezuela Electronic Stock Exchange,
Venezuela
Global foreign exchange market
The global foreign exchange market is the biggest market in the world. The 3.2 trillion USD daily turnover dwarfs the combined turnover of all the world's stock and bond markets.
There are many reasons for the popularity of foreign exchange trading, but among the most important are the leverage available, the high liquidity 24 hours a day and the very low dealing costs associated with trading.
Of course many commercial organisations participate purely due to the currency exposures created by their import and export activities, but the main part of the turnover is accounted for by financial institutions. Investing in foreign exchange remains predominantly the domain of the big professional players in the market - funds, banks and brokers. Nevertheless, any investor with the necessary knowledge of the market's functions can benefit from the advantages stated above.
In the following article, we would like to introduce you to some of the basic concepts of foreign exchange trading. If you would like any further information, we suggest that you sign up for a FREE Membership on this website, where you will be able to exchange views with other Forex traders and get answers to any questions you might have.
Margin Trading
Foreign exchange is normally traded on margin. A relatively small deposit can control much larger positions in the market. For trading the main currencies, Saxo Bank requires a 1% margin deposit. This means that in order to trade one million dollars, you need to place just USD 10,000 by way of security.
In other words, you will have obtained a gearing of up to 100 times. This means that a change of, say 2%, in the underlying value of your trade will result in a 200% profit or loss on your deposit. See below for specific examples. As you can see, this calls for a very disciplined approach to trading as both profit opportunities and potential risks are very large indeed. Please refer to our page Forex Rates & Conditions for current Spreads, Margins and Conditions.
Base Currency and Variable Currency
When you trade, you will always trade a combination of two currencies. For example, you will buy US dollars and sell euro. Or buy euro and sell Japanese yen, or any other combination of dozens of widely traded currencies. But there is always a long (bought) and a short (sold) side to a trade, which means that you are speculating on the prospect of one of the currencies strengthening in relation to the other.
The trade currency is normally, but not always, the currency with the highest value. When trading US dollars against Singapore dollars, the normal way to trade is buying or selling a fixed amount of US dollars, i.e. USD 1,000,000. When closing the position, the opposite trade is done, again USD 1,000,000. The profit or loss will be apparent in the change of the amount of SGD credited and debited for the two transactions. In other words, your profit or loss will be denominated in SGD, which is known as the price currency. As part of our service, Saxo Bank will automatically exchange your profits and losses into your base currency if you require this.
Dealing Spread, but No Commissions
When trading foreign exchange, you are quoted a dealing spread offering you a buying and a selling level for your trade. Once you accept the offered price and receive confirmation from our dealers, the trade is done. There is no need to call an exchange floor. There are no other time-consuming delays. This is possible due to live streaming prices, which are also a great advantage in times of fast-moving markets: You can see where the market is trading and you know whether your orders are filled or not.
The dealing spread is typically 3-5 points in normal market conditions. This means that you can sell US dollars against the euro at 1.7780 and buy at 1.7785. There are no further costs, commissions or exchange fees.
This ensures that you can get in and out of your trades at very low slippage and many traders are therefore active intra-day traders, given that a typical day in USDEUR presents price swings of 150-200 points.
Spot and forward trading
When you trade foreign exchange you are normally quoted a spot price. This means that if you take no further steps, your trade will be settled after two business days. This ensures that your trades are undertaken subject to supervision by regulatory authorities for your own protection and security. If you are a commercial customer, you may need to convert the currencies for international payments. If you are an investor, you will normally want to swap your trade forward to a later date. This can be undertaken on a daily basis or for a longer period at a time. Often investors will swap their trades forward anywhere from a week or two up to several months depending on the time frame of the investment.
Although a forward trade is for a future date, the position can be closed out at any time - the closing part of the position is then swapped forward to the same future value date.
Interest Rate Differentials
Different currencies pay different interest rates. This is one of the main driving forces behind foreign exchange trends. It is inherently attractive to be a buyer of a currency that pays a high interest rate while being short a currency that has a low interest rate.
Although such interest rate differentials may not appear very large, they are of great significance in a highly leveraged position. For example, the interest rate differential between the US dollar and the Japanese yen has been approximately 5% for several years. In a position that can be supported by a 5% margin deposit, this results in a 100% profit on capital per annum when you buy the US dollar. Of course, an even more important factor normally is the relative value of the currencies, which changed 15% from low to high during 2005 – disregarding the interest rate differential. From a pure interest rate differential viewpoint, you have an advantage of 100% per annum in your favour by being long US dollar and an initial disadvantage of the same size by being short.Please refer to our page Forex Rates & Conditions for current Spreads, Margins and Conditions!
Such a situation clearly benefits the high interest rate currency and as result, the US dollar was in a strong bull market all through 2005. But it is by no means a certainty that the currency with the higher interest rate will be strongest. If the reason for the high interest rate is runaway inflation, this may undermine confidence in the currency even more than the benefits perceived from the high interest rate.
Stop-loss discipline
As you can see from the description above, there are significant opportunities and risks in foreign exchange markets. Aggressive traders might experience profit/loss swings of 20-30% daily. This calls for strict stop-loss policies in positions that are moving against you.
Fortunately, there are no daily limits on foreign exchange trading and no restrictions on trading hours other than the weekend. This means that there will nearly always be an opportunity to react to moves in the main currency markets and a low risk of getting caught without the opportunity of getting out. Of course, the market can move very fast and a stop-loss order is by no means a guarantee of getting out at the desired level.
But the main risk is really an event over the weekend, where all markets are closed. This happens from time to time as many important political events, such as G7 meetings, are normally scheduled for weekends.
For speculative trading, we always recommend the placement of protective stop-lossorders. With Saxo Bank Internet Trading you can easily place and change such orders while watching market development graphically on your computer screen
The London Stock Exchange
The London Stock Exchange history is proof that from something small, a huge giant can be built. It can trace its history back more than 300 years. Starting life in the coffee houses of 17th century London, the Exchange quickly grew to become the City’s most important financial institution.
1698 John Castaing begins to issue 'at this Office in Jonathan’s Coffee-house' a list of stock and commodity prices called 'The Course of the Exchange and other things'. It is the earliest evidence of organised trading in marketable securities in London.
1698 Stock dealers are expelled from the Royal Exchange for rowdiness and start to operate in the streets and coffee houses nearby, in particular in Jonathan’s Coffee House in Change Alley. 1720 The wave of speculative fever known as the South Sea Bubble bursts. Details of this can be found in many investment books - especially those related to investor or crowd psychology. It makes for an instructive and entertaining read!! Without doubt, this has to be one of the most interesting times in London Stock Exchange history.
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1761 A group of 150 stock brokers and jobbers form a club at Jonathan's to buy and sell shares.
1773 The brokers erect their own building in Sweeting’s Alley, with a dealing room on the ground floor and a coffee room above. The members soon name it the 'The Stock Exchange'.
1801 On 3 March, the business reopens under a formal membership basis. On this date, the first regulated exchange comes into existence in London, and the modern Stock Exchange is born. Officially, London Stock Exchange history starts here!
1812 The first codified rule book is created.
1836 The first regional exchanges open in Manchester and Liverpool.
1854 The Stock Exchange is rebuilt.
1876 A new Deed of Settlement for the Stock Exchange comes into force.
1914 The Great War means the Exchange market is closed from the end of July until the new year.
1923 The Exchange receives its own Coat of Arms, with the motto 'Dictum Meum Pactum' (My Word is My Bond). For many decades, this phrase summed up the code of those working on or in the exchange.
1939 The start of World War Two. The Exchange is closed for 6 days and reopens on 7 September. The floor of the House closes for only one more day, in 1945 due to damage from a V2 rocket – trading then continues in the basement.
1972 Her Majesty the Queen opens the Exchange's new 26-storey office block.
1973 First female members admitted to the market.
1986 Deregulation of the market, known as 'Big Bang':
Ownership of member firms by an outside corporation is allowed. All firms become broker/dealers able to operate in a dual capacity. Minimum scales of commission are abolished. Individual members cease to have voting rights. Trading moves from being conducted face-to-face on a market floor to being performed via computer and telephone from separate dealing rooms. The Exchange becomes a private limited company under the Companies Act 1985. 1991 The governing Council of the Exchange is replaced with a Board of Directors drawn from the Exchange's executive, customer and user base. The trading name becomes '“The London Stock Exchange'.
1995 AIM is launched – read about it on other pages of this site.
1997 SETS (Stock Exchange Electronic Trading Service) is launched to bring greater speed and efficiency to the market. The CREST settlement service is launched.
2000 Shareholders vote to become a public limited company: London Stock Exchange plc.
2001 London Stock Exchange plc lists on it's own Main Market in July.
As you can see, the London Stock Exchange history has been one of growth and constant expansion and is a credit to the UK.
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How to start investing on the stock exchange
Without a doubt in my mind, I believe that the main reasons that most people are unsuccessful as investors are a lack of both preparation and discipline.
Investment in any form is a show of faith in the future, optimism if you prefer. Whether you are buying property, antiques or stocks, you are displaying your positive outlook for your future years.
Yet despite this obviously good intention, many people make dreadful investments and lose large amounts of money. This optimism can become blinding and prevents us from seeing obvious risks or pitfalls. If we do see them, we may discount them or fail to understand their potential implications. Therefore, understanding the nature of risk is a key lesson that all investors should try to learn before they begin to invest directly in companies quoted on the stock exchange.
For years, investment newcomers were advised to start by choosing a few companies and investing on paper. In other words, the new investor would follow the progress of the company and share price without actually buying. Each day a new plot on a hand drawn graph of the company would help the investor to understand just a little more.
Over time, the investor might spot trends between the company and a leading index or sector. The price might move in odd and unpredictable ways causing a desire for more understanding and education to explain these mysteries.
This desire for new knowledge is a core trait of successful investors. To succeed in stock exchange investments, it is vital to firstly keep up to date, but if possible to stay ahead of the pack. This might mean reading trade journals, the annual reports of competing firms, company reviews, interviews and much more. This ongoing education is vital to success.
As computer technology has advanced and investment analysis tools that only a few years ago were expensive and highly specialised have proliferated, the basic learning process for an investor has changed.
Should it?
If plotting points on a graph hepled to truly understand the workings of a moving average or stop loss system, why stop? This used to be 'investment 101' but is now a task to be downloaded. For many investors, it was the most valuable investment they made. They learned to invest and to understand the workings of the stock exchange. They learned a skill, for others a trade.
This time and investment in learning will help the decision making process of an investor for years to come. It may both earn and save many thousands as the years pass.
Is this a process that you have taken? To accompany all the reading and theory that goes with investment generally, paper trading is an important pillar in understanding both investments and the stock exchange.
Investment in any form is a show of faith in the future, optimism if you prefer. Whether you are buying property, antiques or stocks, you are displaying your positive outlook for your future years.
Yet despite this obviously good intention, many people make dreadful investments and lose large amounts of money. This optimism can become blinding and prevents us from seeing obvious risks or pitfalls. If we do see them, we may discount them or fail to understand their potential implications. Therefore, understanding the nature of risk is a key lesson that all investors should try to learn before they begin to invest directly in companies quoted on the stock exchange.
For years, investment newcomers were advised to start by choosing a few companies and investing on paper. In other words, the new investor would follow the progress of the company and share price without actually buying. Each day a new plot on a hand drawn graph of the company would help the investor to understand just a little more.
Over time, the investor might spot trends between the company and a leading index or sector. The price might move in odd and unpredictable ways causing a desire for more understanding and education to explain these mysteries.
This desire for new knowledge is a core trait of successful investors. To succeed in stock exchange investments, it is vital to firstly keep up to date, but if possible to stay ahead of the pack. This might mean reading trade journals, the annual reports of competing firms, company reviews, interviews and much more. This ongoing education is vital to success.
As computer technology has advanced and investment analysis tools that only a few years ago were expensive and highly specialised have proliferated, the basic learning process for an investor has changed.
Should it?
If plotting points on a graph hepled to truly understand the workings of a moving average or stop loss system, why stop? This used to be 'investment 101' but is now a task to be downloaded. For many investors, it was the most valuable investment they made. They learned to invest and to understand the workings of the stock exchange. They learned a skill, for others a trade.
This time and investment in learning will help the decision making process of an investor for years to come. It may both earn and save many thousands as the years pass.
Is this a process that you have taken? To accompany all the reading and theory that goes with investment generally, paper trading is an important pillar in understanding both investments and the stock exchange.
The Australian Stock Exchange
The Australian Stock Exchange history starts with six separate exchanges established in the state capitals Sydney (1871), Hobart (1882), Melbourne (1884), Brisbane (1884), Adelaide (1887) and Perth (1889).
The first interstate conference was held in 1901. The exchanges then met on an informal basis until 1937 when the Australian Associated Stock Exchanges (AASE) was established, with representatives from each exchange. Over time the AASE established uniform listing rules, broker rules, and commission rates.
Trading was conducted by a call system, where an exchange employee called the names of each company and brokers bid or offered on each. In the 1960s this changed to a post system. Exchange employees called 'chalkies' wrote bids & offers in chalk on blackboards. They also recorded transactions made.
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In 1976 the Australian Options Market was established, trading call options.
In 1980 the separate Melbourne and Sydney stock exchange indices were replaced by Australian Stock Exchange indices. This is essentially the start of the modern Australain Stock Exchange history.
In 1984 broker's commission rates were deregulated. This has allowed competition to lower commissions gradually ever since, with rates now as low as 0.12% or 0.1% from discount internet-based brokers.
In 1987, the separate exchanges merged to form the Australian Stock Exchange. Also in 1987 the all-electronic SEATS trading system was introduced. It started on just a limited range of stocks, progressively all stocks were moved to it. This enabled the trading floors to be closed in 1990. Also in 1990, the warrants market was first opened.
In 1993 fixed interest securities were added. Also in 1993 the FAST system of accelerated settlement was established, and the following year the CHESS system was introduced, this superceded FAST.
In 1995 stamp duty on share transactions was halved from 0.3% to 0.15%. The ASX had agreed with the Queensland State Government to locate staff in Brisbane in exchange for the stamp duty reduction there. This caused the other states followed suit so as not to lose brokerage business to Queensland. In 2000 stamp duty was abolished in all states.
In 1996 the exchange members voted to demutualize. The exchange was incorporated as ASX Limited and in 1998 the company was listed on the ASX itself. The ASX arranged with the Australian Securities and Investments Commission to have it enforce listing rules for ASX Limited.
As you can see, the Australian stock exchange history is one of quickfire change and technology improvements!
Hong Kong Stock Exchange
Hong Kong Stock Exchange history dates back to 1866 but the first formal stock market, the Association of Stockbrokers in Hong Kong, was established in 1891. It was renamed the Hong Kong Stock Exchange in 1914.
A second exchange was incorporated in 1921 - the Hong Kong Stockbrokers' Association. The two exchanges merged to form the Hong Kong Stock Exchange in 1947.
The rapid growth of the Hong Kong economy led to the establishment of three other exchanges in the late 1960s and early 1970s. Prompted by the 1973 market crash and the need to strengthen market surveillance, the Hong Kong government set up a working party in 1977 to consider the unification of the four stock exchanges. As a result, the unified exchange - the Stock Exchange of Hong Kong (SEHK) - was incorporated on 7th July 1980. The four exchanges ceased trading after the close of business on 27th March 1986.
This was a pivotal point in Hong Kong Stock Exchange history as this merger allowed the market to grow and compete on an international scale.
After the October Crash in 1987, SEHK underwent a complete reform, including the establishment of a more widely representative Council and a strong, professional executive management team, to safeguard the interests of all participants and to operate and develop the market effectively.
To enhance the competitiveness of the Hong Kong stock exchange and to meet the challenge of an increasingly globalised market, the Financial Secretary of the Hong Kong SAR Government announced in his Budget Speech on 3rd March 1999, a comprehensive market reform for the securities and futures market. Under the reform, SEHK and Hong Kong Futures Exchange Limited (HKFE) were demutualised, the two exchanges and their respective clearing houses were merged with the Hong Kong Securities Clearing Company Limited (HKSCC) to form a single holding company - Hong Kong Exchanges and Clearing Limited (HKEx).
In accordance with the Schemes of Arrangements of the exchanges and the Exchanges and Clearing Houses (Merger) Ordinance which took effect on 6th March 2000, SEHK became a wholly-owned subsidiary of HKEx together with HKFE and HKSCC.
As you can see, the Hong Kong stock exchange history is one of massive growth and increasing market regulation to improve investor safeguards.
Friday, February 6, 2009
Risks in Forex Trading
Assuming you are dealing with a reputable broker, there are still a lot of risks in forex trading. Forex transactions are subject to unexpected rate changes, volatile markets and political events.Despite so many claims that you may see on most of the forex exchange web sites, there are lot of risks in forex trading. That is why, it is reccommended that you get forex trading training before you start.
Forex trading is done with substantial sums of money and there is always that possibility that trades will go against you. However, there are several trading tools, systems, strategies etc, that can help you manage risks in forex trading. With caution, and above all education and experience, the forex trader can learn how to trade profitably while minimizing losses.
Here are some of the general risks in forex trading
Scams: Forex trading scams were and is fairly common. You still need to exercise caution when signing up with a forex broker. Do some background checking – reputable forex brokers will be associated with large financial institutions like banks or insurance companies and they will be registered with the proper government agencies. In the United States brokers should be registered with the Commodities Futures Trading Commission (CFTC) or a member of the National Futures Association (NFA). You can also cross check with your local Consumer Protection Bureau and the Better Business Bureau.
Exchange Rate Risk: This refers to the fluctuations in currency prices over a particular trading period. Prices can fall rapidly resulting in substantial losses unless stop loss orders are used when trading forex. Stop loss orders specify that the open position should be closed if currency prices pass a predetermined level. Stop loss orders can be used in conjunction with limit orders to automate forex trading. Limit orders specify an open position should be closed at a specified profit target.
Interest Rate Risk: This type of risk can arise from discrepancies between the interest rates in the two countries represented by the currency pair in a forex quote. This discrepancy can result in variations from the expected profit or loss of a particular forex transaction.
Credit Risk:There is the possibility that one party in a forex transaction may not honor their debt when the deal is closed. This may happen when a bank or financial institution declares insolvency. Credit risk is minimized by dealing on regulated exchanges which require members to be monitored for credit worthiness.
Country Risk: This type of risk is associated when government of a particular country becomes involved in foreign exchange market by limiting the flow of currency. There is more country risk associated with 'exotic' currencies, than with major countries that allows free trading of their currencies.
There are also various foreign exchange risk management strategies, that you can use to limit risks in forex trading.
Wednesday, February 4, 2009
Euro Hits Top of its Trading Range as Risk Appetite Returns
The euro is trading near the top of its recent range but further gains could be limited as risk aversion looms in the background, according to currency strategists.Geoffrey Yu, FX strategist from UBS, said their outlook is bearish on the euro as the global and European economies continue to weaken. The fundamental data is still negative and markets will continue to flock to safe haven currencies, he said."The risk gains we have see in the last two days could be wiped away with a bad nonfarm payrolls report," he said. "And we are expecting another weak employment report."Yu said the 1.30 level is going to act as a ceiling for the EUR/USD in the shorter term. With such a volatile market, Yu said he's expecting the pair to bounce between 1.25 and 1.30.
Tyson Wright, senior currency trader at Custom House, said he's not convinced the euro will move higher against the U.S. dollar, especially ahead of the European Central Bank's rate decision. The ECB is expected to hold rates at 2.00% on Thursday.
Wright said there is a risk that the central bank isn't being proactive enough to support the economy and that the result could be a sharp selloff in the euro.The euro was up 0.0105 to 1.2948 against the U.S. dollar. The euro was unchanged at 1.5987 against the Canadian dollar. The pound sterling was down 0.0022 to 1.1085 euros. The euro was up 0.68 points to 115.56 against the yen. All data taken at 12:41 p.m. EST
Dollar Edges Higher on Global Economy Worries
The dollar edged higher against a basket of currencies Tuesday as a plunge in U.S. consumer confidence reminded investors about the dire economic outlook worldwide, boosting the greenback's safe-haven appeal.Trading was volatile as currencies constantly shifted direction. The overall market outlook, however, remained grim, and market players favored buying the lower-yielding dollar and yen.The yen and the dollar often take their cue from perceived swings in investors' risk appetite and have tended to rise when risk tolerance falls.
"The (consumer confidence) will really weigh on the market's risk appetite ... driving investors back into the safety of low-yielding currencies—the dollar and yen,'' said Kathy Lien, director of currency research at GFT Forex in New York.
Data Tuesday showed that U.S. consumer confidence fell to a record low in January. The Conference Board, an industry group, said its sentiment index fell to 37.7 from a revised 38.6 in December, compared with forecasts for a small uptick.
In midday New York trading, the ICE Futures' dollar index a gauge of the greenback's value versus six major currencies, rose 0.1 percent to 84.502. The euro [EUR-TN Loading... was up slightly against the dollar at above $1.31 after hitting a one-week high at $1.3330 following a surprise rise in German corporate sentiment, according to electronic trading platform EBS.
The euro had earlier extended gains versus the dollar after data on U.S. single-family home prices in November came in broadly in line with expectations.US Dollar/Risk Aversion Theme Some market participants, however, expressed doubts as to how long investors will keep buying dollars despite dismal U.S. economic data.
The dollar has been the main beneficiary of downturns around the world. Investors have considered the currency a safe haven amid expectations the United States, the first major economy to hit recession, will be the first among industrialized nations to emerge from the economic slump.
This week's advanced data on U.S. gross domestic product for the fourth quarter should be a key litmus test.This week's advanced data on U.S. gross domestic product for the fourth quarter should be a key litmus test.
Saturday, January 31, 2009
Currency forecast 2009, the year of the Greenback
The US dollar took a stiff beating since the Federal Reserve, in mid December, slashed policy rates to essentially zero. The reverberation from the historic rate cut brought the US dollar/euro rate back to the levels of September and left the greenback at a 13-year low against the yen.
After a strong run in the latter half of 2008, the dollar seemed ripe for consolidation. Still, the longer-term outlook for the dollar is strong, as witnessed by its upsurge against a basket of currencies in January.
The US economy has been struggling with severe economic headwinds for a longer period of time than most others, and thus could be the first to emerge from recession.Supporting that view is an aggressive monetary policy and what is expected to be a vigorous fiscal stimulus plan.
Measured against the US, the Euro Zone policy response has been tepid, and, if not made more aggressive, could prolong the recession, putting pressure on the euro, especially in relation to the dollar. We do anticipate, however, that the euro probably will continue to appreciate against other European currencies.
Weak pound-Sterling is likely to remain weak well into 2009, reflecting the UK's severe recession, ballooning fiscal deficit and falling policy rates. A weak pound will help underpin exports and offer useful support in the face of shrinking domestic demand.
Of course, there is a potential boost to inflation from a weaker pound, but in our view, that should be offset by the squeeze on margins from the recession and collapse in commodity prices. Yen in unique position We expect the Japanese yen to retain its unique position in the currency market in 2009.
It will likely continue to appreciate against the US dollar through the year, as uncertainty persists surrounding the global economic outlook and volatile financial markets.However, economic spillover from a strong yen will likely be capped by Japan's Ministry of Finance. The government will probably intervene in the currency market if the yen appreciates against the US dollar in a way that takes a significant toll on the economy and financial markets.
Asian weakness-Asian currencies ex Japan generally weakened in the final weeks of 2008 on reduced risk appetite, slowing growth and deteriorating current accounts. The Korean won, the Indonesian rupiah and the Indian rupee led the decline due to their external financing risks.
Even the Chinese yuan, having appreciated rapidly against the dollar earlier in 2008, has stagnated of late. Once global financial risks subside, we believe the yuan will likely resume a path of around 5% annual appreciation against the greenback.
Downward dollar shifts-The Australian dollar will likely trade with a downward bias in the near term, as global commodity prices continue to decline, policy rates are cut and risk appetite remains impaired. Further into 2009, however, we expect the Aussie dollar to recover some of its lost ground, especially if China can avoid the worst of the global downturn and the Australian financial system remains in better shape than many of its peers.
The Canadian dollar has retreated sharply with the slide in commodity prices. US dollar strength, spillover from ongoing global financial market imbalances, monetary policy easing and downbeat Canadian data reports have also weighed heavily on the loonie. There is nothing in the outlook that will change that anytime soon.
Friday, January 30, 2009
Tokyo stock exchange
In the 1870's, a securities system was introduced in Japan and public bond negotiation began. This resulted in the request for a public trading institution; and, the "Stock Exchange Ordinance" was enacted in May 1878. Based on this ordinance, the "Tokyo Stock Exchange Co., Ltd." was established on May 15, 1878; and trading began on June 1st.
Thursday, January 29, 2009
GLOBAL MARKETS-US dollar gains, world stocks slip
The U.S. dollar rallied to new high for the past month against the euro on Tuesday after news of the biggest contraction in the U.S. trade deficit in 12 years, and ahead of an expected interest rate cut by the European Central Bank later this week.
The U.S. trade deficit contracted 28.7 percent in November, the biggest fall in 12 years, narrowing to $40.4 billion.U.S. stocks ended mixed, but the Dow Jones Industrial Average closed lower for a fifth consecutive day.Energy-related shares provided some support to stocks though after oil prices rebounded on Saudi Arabia's decision to cut crude output.
European stocks fell for a fifth straight session also on intensifying concerns about the global economic slump that is expected to lead the ECB to cut its benchmark interest rate half a percentage point to 2.0 percent at Thursday's meeting.
"The euro should spend the day trying to resist the negative sentiment being placed upon it, however the current trend suggests this will be a difficult task," said Sacha Tihanyi, currency strategist at Scotia Bank in Toronto, in a research note.
ECB President Jean-Claude Trichet said on Tuesday the euro zone economy faces pressing challenges and cannot afford to let down its guard, adding "a lot of work remains to be done" to address the financial crisis.Hopes that the U.S. Congress would speedily approve the release of the remaining $350 billion financial rescue fund to stabilize credit markets helped underpin U.S. stocks.
"Obama is in a much better position to work with Congress than the previous administration," said Gail Dudack, chief investment strategist at Dudack Research Group in New York. "The market wants to see some very pragmatic action, and Obama is trying to do that."
FED ASSURANCES-The reiteration by U.S. Federal Reserve Chairman Ben Bernanke that the government would consider buying non-performing assets did little to help stocks.The Dow Jones industrial average fell 25.41 points, or 0.30 percent, to 8,448.56. The Standard & Poor's 500 Index lost 1.53 points, or 0.18 percent, to 871.79.
The Nasdaq Composite Index dropped 7.67 points, or 0.50 percent, to1,546.46.Aluminum producer Alcoa kicked off the U.S. fourth-quarter earnings season on a sour note on Monday after reporting a big loss, and its shares fell more than 5.0 percent.
"There's little-to-no good news forthcoming," said Marc Pado, a U.S. market strategist with Cantor Fitzgerald & Co in San Francisco.Shares of Chevron Corp rose 1.4 percent to $71.82 while Exxon Mobil Corp gained 1.8 percent to $77.92, helped by higher crude oil prices.
European shares were led down by losses in banks. The FTSEurofirst 300 index of top European shares fell 1.51 percent to 840.36, all but wiping out the gains achieved since the end of 2008. The index fell 45 percent last year.
Japan's Nikkei average fell 4.8 percent 8,413.91, its lowest close in a month after a strong yen hurt exporters at a time when firms are worried about earnings.Global risk appetite deteriorated this week after Standard & Poor's warned about the ratings on several countries including the United States, Spain, Greece and New Zealand.
In foreign exchange trading, the U.S. dollar firmed against a basket of major trading-partner currencies, with the U.S. Dollar Index up 1.18 percent at 84.2 from a previous session close of 83.214, buoyed by the U.S. trade data and the expected ECB rate cut.
The dollar rebounded from a one-month low against the yen, rising 0.11 percent to 89.23. The euro fell 1.31 percent at $1.32, extending a one-month decline. Sterling fell 2.19 percent to $1.4502, a one-week low.The benchmark 10-year U.S.
Treasury note was down 8/32 in price, with the yield at 2.28 percent.Intra euro zone government bond yield spreads widened to the most since the launch of the euro a decade ago as investors piled into German Bunds, the safest and most liquid of regional government debt.
Ten-year Portuguese, French, Belgian, Greek, Spanish and Dutch bonds were all yielding their biggest premiums over benchmark Bunds since 1999, according to Reuters charts.Crude oil prices rose over 2.0 percent after Saudi Arabia confirmed it planned to produce less than its OPEC target while Qatar said OPEC would cut output again in March. Profit taking cut into the gains and it settled with a 0.51 percent gain to $37.78.
Spot gold prices rose 0.20 percent to $820.95 an ounce. (Additional reporting by Ellis Mnyandu, Pedro Nicolaci da Costa, Wanfeng Zhou, Leah Schnurr and Deepa Seetharaman in New York and Mike Peacock and Emelia Sithole-Matarise in London;
The U.S. trade deficit contracted 28.7 percent in November, the biggest fall in 12 years, narrowing to $40.4 billion.U.S. stocks ended mixed, but the Dow Jones Industrial Average closed lower for a fifth consecutive day.Energy-related shares provided some support to stocks though after oil prices rebounded on Saudi Arabia's decision to cut crude output.
European stocks fell for a fifth straight session also on intensifying concerns about the global economic slump that is expected to lead the ECB to cut its benchmark interest rate half a percentage point to 2.0 percent at Thursday's meeting.
"The euro should spend the day trying to resist the negative sentiment being placed upon it, however the current trend suggests this will be a difficult task," said Sacha Tihanyi, currency strategist at Scotia Bank in Toronto, in a research note.
ECB President Jean-Claude Trichet said on Tuesday the euro zone economy faces pressing challenges and cannot afford to let down its guard, adding "a lot of work remains to be done" to address the financial crisis.Hopes that the U.S. Congress would speedily approve the release of the remaining $350 billion financial rescue fund to stabilize credit markets helped underpin U.S. stocks.
"Obama is in a much better position to work with Congress than the previous administration," said Gail Dudack, chief investment strategist at Dudack Research Group in New York. "The market wants to see some very pragmatic action, and Obama is trying to do that."
FED ASSURANCES-The reiteration by U.S. Federal Reserve Chairman Ben Bernanke that the government would consider buying non-performing assets did little to help stocks.The Dow Jones industrial average fell 25.41 points, or 0.30 percent, to 8,448.56. The Standard & Poor's 500 Index lost 1.53 points, or 0.18 percent, to 871.79.
The Nasdaq Composite Index dropped 7.67 points, or 0.50 percent, to1,546.46.Aluminum producer Alcoa kicked off the U.S. fourth-quarter earnings season on a sour note on Monday after reporting a big loss, and its shares fell more than 5.0 percent.
"There's little-to-no good news forthcoming," said Marc Pado, a U.S. market strategist with Cantor Fitzgerald & Co in San Francisco.Shares of Chevron Corp rose 1.4 percent to $71.82 while Exxon Mobil Corp gained 1.8 percent to $77.92, helped by higher crude oil prices.
European shares were led down by losses in banks. The FTSEurofirst 300 index of top European shares fell 1.51 percent to 840.36, all but wiping out the gains achieved since the end of 2008. The index fell 45 percent last year.
Japan's Nikkei average fell 4.8 percent 8,413.91, its lowest close in a month after a strong yen hurt exporters at a time when firms are worried about earnings.Global risk appetite deteriorated this week after Standard & Poor's warned about the ratings on several countries including the United States, Spain, Greece and New Zealand.
In foreign exchange trading, the U.S. dollar firmed against a basket of major trading-partner currencies, with the U.S. Dollar Index up 1.18 percent at 84.2 from a previous session close of 83.214, buoyed by the U.S. trade data and the expected ECB rate cut.
The dollar rebounded from a one-month low against the yen, rising 0.11 percent to 89.23. The euro fell 1.31 percent at $1.32, extending a one-month decline. Sterling fell 2.19 percent to $1.4502, a one-week low.The benchmark 10-year U.S.
Treasury note was down 8/32 in price, with the yield at 2.28 percent.Intra euro zone government bond yield spreads widened to the most since the launch of the euro a decade ago as investors piled into German Bunds, the safest and most liquid of regional government debt.
Ten-year Portuguese, French, Belgian, Greek, Spanish and Dutch bonds were all yielding their biggest premiums over benchmark Bunds since 1999, according to Reuters charts.Crude oil prices rose over 2.0 percent after Saudi Arabia confirmed it planned to produce less than its OPEC target while Qatar said OPEC would cut output again in March. Profit taking cut into the gains and it settled with a 0.51 percent gain to $37.78.
Spot gold prices rose 0.20 percent to $820.95 an ounce. (Additional reporting by Ellis Mnyandu, Pedro Nicolaci da Costa, Wanfeng Zhou, Leah Schnurr and Deepa Seetharaman in New York and Mike Peacock and Emelia Sithole-Matarise in London;
Yen up, dollar rises vs euro as risk appetite suffers
The yen rose against the dollar and euro on Friday as more signs of weakness in the U.S. economy heightened fears that the ongoing credit crisis had pushed the global economy to the brink of recession.Though governments worldwide have started pouring cash into troubled banks, helping reduce the cost of interbank borrowing, investors remain worried about high cost to the economy from a credit crisis that has persisted for more than a year now.
And with signs of trouble now emerging in economies in Eastern Europe and Asia, investors have reversed risky trades financed with low-yielding yen, helping lift the Japanese currency at the expense of its higher-yielding rivals.
The dollar, which benefits from risk aversion because dollar-based investors repatriate funds, gained on the euro. “The focus is shifting from the credit crisis to a looming global recession,” said Omer Esiner, senior currency analyst at Ruesch International in Washington. “I’d characterize recent U.S. data as dismal, but no matter how bad things get here, the global picture looks just as bad,” and that will support
the dollar and the yen, he said.
Early morning, the dollar was down 0.6 percent at 100.95 yen, while the euro was down 0.9 percent at 135.69 yen , edging closer to a three-year low around 132. European stocks pared earlier gains while U.S. stocks pointed toward a lower opening on Wall Street.
The euro also fell 0.4 percent to $1.3435, while sterling was flat at $1.7317. “We’re still in an incredibly unstable market which will persist for a long time. Although we’ve had all these policy initiatives, it won’t necessarily stop the extreme moves we’ve seen across markets,” said Bilal Hafeez, foreign exchange strategist at Deutsche Bank in London. “Given that context, I expect to see the yen strengthen across the board.”
U.S. economic data has discouraged traders this week, with reports on retail sales and industrial output showing sharp declines. On Friday, a Commerce Department report showed U.S. housing starts continued to fall in September, and markets awaited a fresh reading on consumer sentiment due at 10 a.m. (1400 GMT).
The dollar, however, has held its ground against most higher-yielding currencies, thanks to safe-haven flows. Esiner said much of that is also driven by concern about the economy beyond U.S. borders.
With the Federal Reserve having slashed interest rates to 1.5 percent, he said there is little room for further cuts. That’s not so in the eurozone, Britain and beyond, where rates are much higher. “That means they have a lot further to fall, so in a global recession scenario, the euro, sterling, Aussie and kiwi have a lot more room to the downside,” he said.
The Australian dollar, with rates of 6 percent, was down 2 percent against its U.S. counterpart at $0.6788 while the New Zealand dollar fell 1.3 percent to $0.6116.
Further unnerving investors on Friday was news that Ukraine and Hungary had turned to the International Monetary Fund and other foreign lenders to help bolster their financial systems. That soured sentiment on emerging markets in general and sent investors back into yen, considered low-risk because Japan’s key interest rate remains at just 0.5 percent.
Wednesday, January 28, 2009
Pound rallies despite bleak High St news
The pound ended its seven-day slump against the euro today and rose against the dollar, to above $1.40, despite horrific news from the High Street.Sterling was up 1.03 cents against the European single currency, to €1.0752, making one euro worth 93.0p. It was also up 1.4 cents to $1.414 against the greenback, having fallen to $1.35 on Friday - its weakest since September 1985.
The rally came despite the bleakest forecast from the High Street in 25 years after nearly two-thirds of retailers saw business decline on a year ago in the New Year sales.It raised fears the recession could be deeper and longer than expected. Howard Archer of Global Insight said he now expected to UK economy to contract by 3.1% in 2009, the steepest decline since the aftermath of the Second World War, compared with his earlier forecast of 2.9%.
But currency traders were betting the pound has been oversold in recent weeks and analysts at BNP Paribas argued that sterling's next stop could be $1.46. This followed assurances yesterday from Barclays that it did not need a Government bailout, which would have put the UK's fragile finances under even greater strain. Barclays shares jumped 73% yesterday and were up another 5%, or 4.3p, to 93p today.
'The fact that sterling is benefiting from the banking news suggests it may not be the lost cause many seem to assume it is right now,' said Steve Barrow, head of G10 currency research at Standard Bank. BNP analysts added that the downturn in the UK is unlikely to be as bad as that in the eurozone.
Tuesday, January 27, 2009
Euro, Pound Weaken on Speculation European Rates Will Decline
The euro and the pound fell against the dollar on speculation the European and U.K. central banks will lower interest rates to combat a recession and bank losses.The 16-nation euro also traded near a seven-year low versus the yen before data that may show business sentiment in Germany slumped. Sterling approached a 23-year low versus the U.S. currency after U.K. home prices had the biggest annual decline since at least 2001.
“The European Central Bank will have to cut rates further than the market expects,” said Paul Robinson, a currency strategist in London at Barclays Capital. “Far too much bad news is priced in the pound.”The euro fell to $1.2945 as of 9:47 a.m.
In London from $1.2975 in New York on Jan. 23, when it slid to $1.2765, the lowest level in more than six weeks. The euro was at 115.23 yen from 115.12 yen and 113.75 earlier. The euro touched 112.15 yen on Jan. 21, the weakest since March 2002. The dollar bought 89.07 yen from 88.75 yen.
The pound dropped to $1.3737 from $1.3804. Sterling reached $1.3503 on Jan. 23, the lowest level since September 1985. The U.K. currency declined to 94.19 pence per euro from 94.02. It also fell to 122.18 yen from 122.42 yen after reaching a record low of 118.85 yen on Jan. 23. The pound may rebound to $1.41 and 92 pence versus the euro in a month, Robinson said.
U.K. Rates-U.K. policy member David Blanchflower said interest rates should be at zero to 0.25 percent to aid the economy, the Sunday Times reported yesterday. The central bank will cut its 1.5 percent main rate by a half-percentage point on Feb. 5, a Credit Suisse Group AG index of derivatives showed. The government’s plan for a second bank bailout in three months has stoked concern the financial crisis is deepening.
“Those that agree with Blanchflower should be bearish on the euro-pound, as we are,” Ashley Davies, a currency strategist in Singapore at UBS AG, the second-largest foreign- exchange trader, wrote in a research note today. “We continue to target euro-pound lower from current levels.”
Monday, January 26, 2009
Sideways trade seen for peso
There is no reason or any major factor that will affect the peso’s further movements. I think it will range between P47 to P47.50 per dollar this week," a trader said. Last Friday, the peso opened at P47.42 per dollar, hit an intraday high of P47.43 and a low of P47.30 before closing at P47.40.
Continuing risk aversion due to Wall Street’s volatility, a stronger dollar over other major foreign currencies and a weaker demand for the peso pushed the local currency to lose three cen-tavos last Friday from Thursday.
Investors also had a wait-and-see attitude on Friday as to what kind of action the Bangko Sentral ng Pilipinas would take amidst the economic slowdown.A trader said he believes the Monetary Board’s meeting on Thursday to review rates will impact the peso later in the week."The peso should weaken in case the BSP cuts rates," a trader said. The market expects the central bank to cut rates by 25 to 50 basis points on the back of declining inflation.
Sunday, January 25, 2009
BNR puts a halt on leus downfall. Exchange rates slide to 4.29 lei/euro
The national currency had an opposite evolution compared to emerging currencies in the region with a sharp increase around noon. The move was likely determined by an indirect intervention of the central bank in the currency market,” said Ioan Birle, senior dealer at Banca Transilvania, NewsIn informs.
After a depreciation to 4.34 lei/ euro in the early trades, evolution attuned to the European markets, the national currency started to gain ground gradually, and before BNR’s announcement of the benchmark exchange rate, the euro fell sharply from 4.33 lei to 4.29 lei. Later on, the local currency remained near to this threshold, and at 16:40, the banks were buying euro at 4.2844 lei and sell it at 4.2956 lei.
In the region, Hungarian forint plummeted to record lows of over 291 units versus euro, while the Polish zloty lost ground, and exceeded 4.46 units against euro, the lowest rate since September 2004. The benchmark rate announced by BNR on Friday indicates a 0.5% appreciation of the leu, up to 4.2910 lei/euro, compared to Thursday’s record of 4.3127 lei/euro.
Saturday, January 24, 2009
What's really wrong with Sterling?
How bad is this fall in the pound? In a word: hideous.Measured against a basket of other currencies – the best way in this globalised era to test a currency's strength – the pound has fallen in the past year by around a quarter.
This is more than any previous devaluation in the past century – greater even than in 1931, when, under Ramsay MacDonald, the UK was forced to abandon the gold standard and saw the pound plummet by more than 24 per cent against the dollar.
Greater than after Black Wednesday and the abandonment of the Exchange Rate Mechanism; worse than in 1967, when Harold Wilson was forced to make an extraordinary televised statement to the nation claiming that the "pound in your pocket" would not be worth any less after his devaluation.
Wednesday, January 21, 2009
US, China headed for possible currency clash
The deepening world economic crisis and a possible spat over currency levels hung in the air as the United States and China sat down Thursday to discuss the future of their economic relations.U.S. officials say Treasury Secretary Henry Paulson will press Beijing to let its yuan rise against the dollar to ease trade tensions at the two day Strategic Economic Dialogue.
American companies contend that China keeps the yuan undervalued, giving its exporters an unfair advantage and adding to its swollen trade surplus.But with China's exporters suffering, the yuan plunged Monday in government-controlled trading a possible message to Washington to go easy on the issue.
American companies contend that China keeps the yuan undervalued, giving its exporters an unfair advantage and adding to its swollen trade surplus.But with China's exporters suffering, the yuan plunged Monday in government-controlled trading a possible message to Washington to go easy on the issue.
Dollar Falls on Concern Middle East Conflict May Cut Oil Supply
The dollar dropped the most in more than a week against the euro on concern Israeli attacks on Hamas in the Gaza Strip will fan Middle East tensions and disrupt oil supplies to the U.S., the world’s biggest energy consumer.
The greenback also slid versus the yen before U.S. housing and manufacturing reports this week that may show the world’s largest economy is slipping further into recession.
The British pound fell to near a record low against the euro after a survey of U.K. estate agents and surveyors forecast home prices will slide in 2009, extending this year’s declines.
“The tensions in the Middle East appear to be causing buying of the euro,’ said Toshihiko Sakai, head of trading for foreign exchange and financial products in Tokyo at Mitsubishi UFJ Trust & Banking Corp., a unit of Japan’s biggest bank. “When there’s geopolitical risk in that region, the dollar tends to be sold.”
Forex Brokers comissions
Most forex brokers do not charge commissions. GFT Forex Brokers, like other forex brokers, are compensated by revenues from their activities as currency dealers, including proceeds from buying, selling, converting and holding currencies, interest on deposited funds, and rollover fees.
Many may wonder how brokers work without commissions. The forex dealer is like a middleman. Let's consider the case of a bread middleman. He buys bread at a “wholesale” price and he sells it at a “retail” price. So if one is a baker, he can ask the middleman how much he would buy his bread for. Let's say the middleman quotes $1, so he's willing to pay $1 per loaf.
On the other side of the equation, let's say you just finished his last slice of bread, and you needs a new loaf. So you call up the local middleman, and ask him how much he's willing to sell you (a customer) a loaf of bread for. And he quotes the baker $1.25. That sounds reasonable, so you tell him to drop one off for you.
In this example, the bread middleman didn't charge you a commission to either the baker or you, the customer. Instead he bought at one price and sold at another. He will let you buy from him at $1.25, and let you sell to him at $1. So every time the baker has bread to sell, he checks the middleman's sell price. And when you want to buy a loaf of bread, you check the buy price.
In trading, this is known as the “bid” and “ask”. The bid is the price you can sell at, and the ask is the price you can buy at.
Considering forex broker commissions, the forex dealer will let the trader buy from him at 1.1971 and will let the trader sell to him at 1.1967. The difference 0.0004 is known as the spread. And this spread is where the forex “middleman” makes his money.
If the trader were to buy at 1.1971, then the instant the trader buys, he is “down” 0.0004, because if the trader wanted out of the trade, the best price he could sell it for is 1.1967. So as the forex dealer takes varying trades from people, each buying or selling, he can make money from this price gap. Each minimum increment, 0.0001 is referred to as a “pip”. So the spread in this example is 4 pips. In terms of dollars, for a forex contract of $100,000, this transaction would cost you $40 ($100,000 x 0.0004) or 4 pips. So the trader will find that some companies will advertise a spread of 3 pips on some currencies, usually ranging up to five on others. In forex trading, the tighter the spread is, the better.
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