While a recently adopted National Futures Association (NFA) rule is forcing some forex brokers to discontinue the use of stop and limit orders to protect positions, GFTannounced today that their platform is fully compliant with all NFA regulations and, as such, customers trading with GFT will not be affected.

Click here for more information >>

While a recently adopted National Futures Association (NFA) rule is forcing some forex brokers to discontinue the use of stop and limit orders to protect positions, GFTannounced today that their platform is fully compliant with all NFA regulations and, as such, customers trading with GFT will not be affected.

Click here for more information >>

The NFA has enacted a new rule that will eliminate the ability of traders to hedge open trades. Many traders are nervous that they will no longer be able to place stop-loss or limit orders. As GFT has already been following this rule and will experience no changes. Customers with GFT will be able to continue to place stop-loss and limit orders.

There will be more information posted on FX360 shortly.  

The euro is falling to the U.S. dollar in currency trading on the FX market today. The euro is gaining in forex trading as China continues to say that it supports the dollar as the global reserve currency. And China does support the dollar. For now. (What China is doing for the long term is another story altogether.) For the short-term, China's continued use of the dollar will continue to provide limited support for the dollar in currency trading. 

Another issue affecting the euro in forex trading is economic data. Even though German employment saw some improvement, overall the euro zone is looking pretty grim. Yesterday's enthusiastic rally is being overshadowed as forex traders moderate their optimism. GFT's Boris Schlossberg reports in FX360 on the latest euro zone unemployment issues:

EZ unemployment rose to 9.5% from 9.3% projected as conditions in southern Europe deteriorated further. As we’ve stated before the risk of EZ unemployment rolls rising into the second half of 2009 remains quite high especially if German efforts at “short work week” arrangements begin to fail. Many analysts now expect the EZ rate to climb into double digits mirroring the labor conditions in US.

This renewed concern about the economy means that the U.S. dollar is once again ascendant in currency trading as a safe haven.

In todays article on Market Watch, Dollar slips versus euro as equities start quarter in the green Kathy Lien was quoted:

"If Trichet suggests that he has done enough, which we expect him to do, the euro-dollar could extend its gains," said Kathy Lien, director of currency research at Global Forex Trading. "If he openly talks about extending the size and scope of program, it would be bearish for the euro."

Read full article.

Earlier this year, China made a rather strident call for a global reserve currency. This call was for the world to use International Monetary Fund "special drawing rights." Most countries scoffed at the notion, and, having planted the idea, China backed off. Even recently, China expressed its current support of the U.S. dollar as a reserve currency. But China isn't one to just give up. China is patient, and takes the long view.

Earlier this year, China arranged a currency swap with Argentina. Additionally, China is looking to have its major finance centers settle loans in yuan. There is even an agreement with Hong Kong in the works for exchanges in the yuan. Clearly, China is looking forward to a day (and it may be two or three decades in the future) when the U.S. dollar may not be the dominant reserve currency. The Forex Blog offers this on the gradual change:

Even China has stated that its reserve policy will not feature any sudden changes. In sum, “It seems safe to say that the Chinese are pursuing a rather logical path. They will continue to accumulate dollar reserves, as doing so fits their three-adjective criteria [liquidity, safety and returns], while also pushing for international acceptance of an alternative to the dollar in a new global currency.”

This is smart thinking. China has been taking one solid step at a time as it builds toward economic superpower status. The country has been diversifying in recent months, buying energy concerns and looking to European investments. While America's dominance has certainly lasted quite a while, China is looking toward the day when it make take her place.