All eyes have been focused on what has certainly proved to be a volatile week on the markets. With many heralding in “Black Monday” in terms of the falls within the Asian markets, online Forex trading has been massively affected by recent events. Spurred by weak growth data from the largest economy in the world, major indices such as the FTSE 100, the Dax and the CAC 40 took massive hits over the past few days. This has caused a shudder of uncertainty to resonate throughout the trading world; many Forex investors claiming that the markets were on the “verge of panic”. (more…)
Archive for the ‘Crisis’ Category
The International Monetary Fund, IMF is sensing out a warning regarding Japan’s debt in a completely new report. The IMF believes that Japan’s debt is unsustainable and that the risk of increasing as much as up to three times the country’s GDP (Gross Domestic Product) in 2030, is worrying. (more…)
All eyes have been understandably focused on Greece during the past week. What appeared to be a rather tenuous bailout offer has been accepted by the Greek parliament and pushed through at the eleventh hour by the European Union. While the massive €80 billion euros required to ease the financial tensions and imbue liquidity into the Greek economy may be a welcome development, many investors are still wary in regards of the long-term damage that could have already been done to the euro as a whole. (more…)
The Greece crisis reached new corners of the globe recently with its latest haphazardly turn away from progress. Today Monday June 29th, markets suffered across Asia to Europe in the wake of Greece shutting down its banks for a week, ahead of a debt default that now seems more probable than ever.
Oil prices saw a sharp drop and the Euro declined against the dollar, while Japan’s Nikkei 225 index fell 2% to 20,283.98 points.
The conflict has significantly slowed the recovery in central Europe, with Germany’s finance minister Wolfgang Schäuble recently announcing that the growth forecast for the country may not attain its predicted target of 1.8 per cent.
This is to be expected in a country only 400 miles from the conflict; fighting has affected business confidence in the powerhouse economy of Europe, and this has had a negative knock-on effect on the price of the Euro.
However, the tenuous peace deal between Russian rebels and the Ukrainian government has helped the Euro advance against the Dollar faster than all other currencies; from previous lows to a price of $1.311565.
The final week of April has witnessed the Euro tumble once again as the jobless rates in the European Union hit an all-time high of 12.1% awhile inflation slowed to 1.2%; rates not seen since February of 2010.
Of notable importance for online forex traders is the marked unemployment figures released from both Spain and Germany. While the figures in Germany may be seen as comparatively marginal, those in Spain represent the continued weakness of the fifth-largest economy in Europe.
The week ahead looks to highlight concerns underpinning the European sovereign debt situation. The main story still is that of volatility on the European market; the single currency’s future viability questioned by many traders worldwide.
Spain is becoming more and more of a concern
The concerns with Spain’s ability to manage a flailing economy have grown since the IMF rescue package was approved. Spanish yields have tipped well over seven percent, trading at 7.39% after hitting a European-era high of 7.56%. Attempting to mitigate further volatility, Spain has banned short selling for three months while Italy, feeling the effects as well has banned short selling financials for one week. There are now fears that Spain may indeed seek a full bailout, as regional governments have begun to express concern for their ability to manage internal debts. Spanish and Italian bank shares were the worst hit followed closely by their domestic indices; the Ibex at one point dropping nearly five percent.
Greece’s debt reduction
Furthermore, creditors are expected to begin auditing Greece’s progress on debt reduction. This audit determines whether the country is to be approved for an additional 31.5 billion euros. With political and social unease, a quickly shrinking economy and many investors questioning whether Greece will meet its August deadline, there has been speculation of true insolvency should their financial situation worsen.
EUR/USD at two-year low
Because of these protracted jitters, the euro has fallen to a two-year low against the US dollar to trade at $1.2082. Furthermore, it has fallen to an eleven-year low to the Japanese yen. Below $1.20, many online Forex traders have taken a bearish stance.
Euros long term survival
On the other hand, some Forex traders have taken the attitude that any position would have to be long due to such market volatility. This, of course, is under the assumption that the euro will remain in its current form. Indeed, the lack of real movement in the precious metals markets, traditional safe havens, illustrates that many believe the markets may incur still more losses in the near term. Nonetheless, taking a long position in the euro may indeed be one of the few hedges against what remains as the most volatile era for decades.
Many European Investors believe the Euro crisis are about to spread to Spain and Portugal, after Greece took a hard hit in the beginning of the month. The Euro have taken a hard hit and lost over 6 % against the Euro the last weeks. Are Europe just in the beginning of the crisis, while US are on their way out?
Spain deny lost budget control
“We have control of the ship, we have a plan,” said María Teresa Fernández de la Vega, Spain’s deputy premier. Earlier the same day, the prime minister José Luis Rodríguez Zapatero, visited Washington
where he was confident about his home country: “Spain has a strong and solid financial system.”
Well, all are not as confident. Both Madrid and Lisbon ran up their budget deficits to dampen the effects of the economic crisis and partly because of (more…)
Many investors see online forex as an alternative when the equity and property market remain risky.
There are many reasons for this. Let us explain a few here:
- When the stock market are turbulent, investors seek alternative investments.
- It’s hard to predict the stock market at the moment.
- Newspapers write more about online forex and how currencies fluctuate.
- With currency trading, you are not dependent of a positive equity market.
What will you do in turmoil times, trade online forex?