Global Forex Trading Blog | GFT Forex

Interest Rates and Currency Trading

Fri, 08 Aug 2008 10:04:44 -0400

FX market and interest ratesThe last few days, there has been a lot of focus on interest rates. This is because interest rates can affect what goes on in currency trading on the FX market. Interest rate decisions are always watched carefully.

Why forex traders watch interest rates

Forex traders watch interest rates because they are indicators of how the economy is doing. When an economy is strong, its currency is usually strong as well. Likewise, a weak economy usually leads to a weak currency.

Interest rates indicate the direction an economy is going. A hike in interest rates usually means that an economy is gaining in strength. It is expanding, and the higher interest rates keep inflation in check. Higher interest rate usually boost the currecny on the FX market.

Lower interest rates, on the other hand, imply that the economy needs stimulation to help it growing. This damages the currency in FX trading.

Euro Forex Trading Forecast

Fri, 08 Aug 2008 09:32:27 -0400

Is euro strength waning in currency trading?With the US dollar strengthening dramatically in forex trading, the euro is falling.

Right now, the euro has dropped, slumping the most it has in about four years. The concern is mostly centered around the fact that the ECB president Jean-Claude Trichet's remarks about the eurozone economy did not bolster confidence in the future.

While the ECB rate remains on hold for now, analysts and investors are starting to wonder if it might be cut by year's end. Such a move would only send the euro lower in the forex trading forecast.

US Dollar Continues in Strength in Forex Trading

Fri, 08 Aug 2008 09:14:06 -0400

Greenback gains in currency tradingThe US dollar is strengthening today in forex trading. The greenback is making gains in currency trading on the FX market as oil prices fall and as economic data continues to show that the eurozone economy is slowing.

UK Pound Forex Trading Strategy

Fri, 08 Aug 2008 08:56:17 -0400

Sterling continues to drop in currency tradingUK pound forex trading strategy should consider that the currency is falling rather dramatically to the US dollar right now on the FX market.

The sterling is dropping in currency trading as increasingly disastrous economic data continues to roll in. Housing data has been especially damaging to the British economy in the past months. Bloomberg reports on the future for the UK pound in FX trading:

``It looks like the U.K. economic picture is going to deteriorate further and we are going to see sterling come under increasing pressure,'' said Ian Stannard, a senior currency strategist at BNP Paribas SA in London, who predicts the pound will fall to $1.85 by the end of the year.

Canadian Dollar Drops in Currency Trading

Fri, 08 Aug 2008 07:53:36 -0400

Loonie lowest in a year in forex tradingThe loonie has fallen to its lowest level in nearly a year in forex trading on the currency market. The Canadian dollar is falling in currency trading as it appears that the troubles that have been plaguing the US economy are finally catching up to Canada.

The latest big of economic data to impact the loonie in FX trading on the currency market is the unemployment rate. Apparently the Canadian economy has shed more jobs, and this is a sign of continued slowdown.

And with oil prices falling, the worries over Canada's economy only mount.

GFT Daily Market Commentary

Thu, 07 Aug 2008 20:59:12 -0400

Forex Market Commentary for August 8, 2008 by Cornelius Luca

GFT Daily Market Commentary

The dollar made the expected upmove on Thursday, even though it encountered mild weakness early in the day. The European, commodity currencies and the yen remain under pressure amid long liquidation. The dollar could march higher today as well, but some profit taking is possible ahead of the weekend.

Euro/dollar

The euro/dollar fell sharply on Thursday after ECB President Trichet flip-flopped through his statement before finally suggesting concern about weakening Eurozone growth. The pair closed at a five-month low and is at a crucial point; a close below 1.5316 would suggest the start of a double top targeting the 1.4600 area, while a failure would signal profit taking on shorts. Tough call, but the early bias is lower.

Initial support now comes at 1.5319. Further support remains at 1.5305 and 1.5240. Distant support now moved to 1.5050.

Immediate resistance is at 1.54050. This is followed by 1.5450 and 1.5515. Above the strong level at 1.5580, distant resistance moved down to 1.5630l.

Oscillators are declining.

NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Bullish

Dollar/yen

Dollar/yen consolidated on Thursday after nailing a seven-month high on Wednesday, but the uptrend remains in place. Again, the upside is only slightly favored today and an initial pull back is likely.

Support is at 109.15 from a 50-point pivot, which targets 109.65 and 108.65. Distant support follows at 107.95 from a 50-point pivot, which targets 107.45 and 108.45.

Immediate resistance remains at 109.65. Strong resistance is at 110.60. The next resistance is at 111.00. Distant resistance is at 112.05.

Oscillators are mixed.

NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Mixed

Sterling/dollar

Sterling/dollar reversed early gains to slide for a fifth consecutive day on Thursday and closed below a trendline support at 1.9488. Once again, following an early bounce, the pound should see more weakness.

Immediate support is now seen at 1.9410. This is followed by 1.9365. Distant support is now seen at 1.9175.

Initial resistance now comes at 1.9490. The next level is 1.9585. Above 1.9630, the next significant level is pegged at 1.9760.

Oscillators are falling.

NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bullish

Dollar/Swiss franc

Dollar/Swiss rallied further to a new high for the uptrend on Thursday. Again, following some pullback, the uptrend should resume.

Initial support is still seen at 1.0560. This is followed by 1.0480, 1.0435 and 1.0405. Distant support now comes at 1.0370.

Above 1.0638, resistance remains at 1.0675. This is followed by 1.0790.

Oscillators are rising.

NEAR-TERM: Mixed to slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed

Currency Trading from Your Mobile Device

Thu, 07 Aug 2008 09:10:38 -0400

FX trading on the go from GFTOne of the wonders of technology is the possibility of doing any number of "normal" activities from your mobile device. This is even true of FX trading from GFT.

With DealBook Mobile, it is possible to engage in currency trading on the FX market from your mobile device. There are three options available for forex trading:

Windows-based PDA.
Mobile phone.
BlackBerry.

Canadian Dollar Forex Trading Strategy

Thu, 07 Aug 2008 09:06:33 -0400

Oil prices gain; so does the loonie in currency tradingCanadian dollar forex trading strategy should consider that oil prices have a rather large influence on how well things go on the currency market.

As a commodity currency, the Canadian dollar depends on its main export to help buoy the loonie in currency trading on the FX market. Since oil prices are making some gains today -- after a few days of losses, the loonie is also rising in FX trading.

However, reports Bloomberg, Canadian dollar forex trading strategy should consider that the gains will likely be short lived:

``Oil is up, so Canadian dollar has responded, reversing what had been a persistent and unusual trend,'' said Eric Lascelles, chief economist at TD Securities Inc. in Toronto. ``It may hold onto its gains, but it probably will continue to be soft as commodities have probably flattened a bit and the U.S. dollar has managed to hang on, and even make some gains against Canada and other currencies.''

Forex Trading Forecast: Australian Dollar

Thu, 07 Aug 2008 09:00:42 -0400

Aussie set for future losses in currency tradingThe forex trading forecast for the Australian dollar looks a bit limited as commodities continue to falter on the world markets. The Australian dollar is a commodity currency, so it relies heavily on how well commodities are doing in trading.

Right now, the Aussie is set for future losses as commodities continue their global retreat. Most commodities (Australia is especially concerned with gold) are following the lead of oil prices, which are quite a bit off their record highs of mid-July.

Euro Makes Gains in Forex Trading

Thu, 07 Aug 2008 07:50:07 -0400

Currency trading with euro/dollarCurrency trading with euro/dollar has been a bit choppy the last couple of days. With euro rising in forex trading against the US dollar yesterday, before falling back, things have been a bit volatile.

And now, the same bit of choppiness is appearing today. The euro is advancing overall against the dollar in FX trading as the ECB remains the same, maintaining the euro's interest rate differential. However, the euro has begun paring gains in forex trading.

The euro is also gaining against the UK pound in forex trading.

BOE, ECB Keep Rates On Hold

Thu, 07 Aug 2008 07:43:09 -0400

Sterling falls against euro in forex tradingBoth the Bank of England and the European Central Bank are keeping interest rates on hold for now. Despite slowing economies in Britain and in the eurozone, central banks on the other side of the Atlantic remain focused on inflation.

The move continues a delicate dance (similar to the one done by the Federal Reserve in the US) in which central bank officials try to balance the opposing forces of economic slowdown with increased inflation. The hope is that by keeping interest rates the same, inflation will peter out in the coming months, while the economy is not hurt too much.

Cutting interest rates often fuels inflation along with economic growth. Boosting interest rates is a way to limit inflation. When an economic slowdown is combined with inflation, it makes what to do with interest rates a difficult decision.

Global Forex Trading Blog | GFT Forex

Interest Rates and Currency Trading

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Euro Forex Trading Forecast

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US Dollar Continues in Strength in Forex Trading

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UK Pound Forex Trading Strategy

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Canadian Dollar Drops in Currency Trading

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GFT Daily Market Commentary

Currency Trading from Your Mobile Device

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Canadian Dollar Forex Trading Strategy

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Forex Trading Forecast: Australian Dollar

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Euro Makes Gains in Forex Trading

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BOE, ECB Keep Rates On Hold

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