Posts Tagged ‘china’

Sluggish Days for the Pound?

The British pound has seen modest gains over the past few trading sessions and is now slightly above the 1.51 figure in relation to the United States dollar. However, this is now without mixed results.

Recent bank stress tests pointed out that all but two institutions (Standard Chartered and RBS) have passed scrutiny and did not exhibit any symptoms of capital shortfalls. This was unfortunately offset by surprisingly sluggish PMI data.
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According to the Bloomberg reports, less money is changing hands in trading stock in the US than in China market.

The combined turnover in Shenzhen and Shanghai rose to a record high of $380 billion on Thursday, exceeding the value of stock traded in the U.S on Wednesday by a whooping $132 billion.

The equity volumes in China surged as monetary speculation and easing of further stimulus ignited the biggest rally in the world.
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This week the dollar will start another chapter in its race against devaluation in the forex market. US dollars have seen their value being decreased; an occurring trend for the last three months and that can be seen on online trading.

This is particularly worrying as America is facing external deals around the world.

China has signed a $22bn agreement with India and this clearly shows a new layout in the design of the international markets.

America has already started taking steps to counter attack this situation by approaching the Chinese. However the question here is: should we buy or sell dollars?
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Two of the biggest pieces of online forex trading news that emerged this week and caught the attention of traders from all around the world had their origins in Europe and China.

As all good forex traders know, the key to making profits in the currencies markets is accurately predicting movements in price in advance.

These two pieces of important news strongly suggest that there will be movements in price within some of the major global currencies (such as the Euro and Renminbi).
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All eyes seem to be focused on the recent strengthening of the euro in relation to the majority of other traded currencies.

Indeed, this eighteen-nation benchmark was seen to be trading at the highest levels so far this year; rising 0.6 per cent in early trading while even briefly touching upon $1.3813 dollars. This value has not been seen since late December of 2013.
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In this week’s recent Forex trading developments, it seems that risk aversion is on the minds of most investors.

There are several factors to consider when examining how online Forex markets may respond in the weeks ahead.

First and foremost, the next few days will be rather quiet in the United States. However, the presidents of the Chicago and Richmond subsidiaries of the Federal Reserve are said to be speaking soon. Many online Forex traders feel that they may hint that the latest round of QE asset purchases will be slowing.
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One of the primary Forex concerns that has emerged during the past week is the sentiment that the dollar may possibly be losing its benchmark status as a safe haven currency.

Indeed, this is echoed by certain online Forex trading analysts that are viewing risk aversion from a bearish stance. However, this is a view not espoused by most traders.

On the contrary, it is thought that the dollar will regain much of the footing that was seen to waiver in relation to other currencies.
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Entering China has become a hot topic in the forex world. From boardrooms to bulletin boards, there’s a significant amount of buzz regarding the best way to delve into this market. China offers enormous potential for traders, yet this remains largely untapped due to the draconian regulations laid down by the Communist Chinese government.

While it’s been possible for Forex companies to gain some kind of access to Chinese markets, this has typically been accomplished through partnerships with local representatives, offices in less heavily-regulated Asia-Pacific offices and IBs, this has not translated into securing a real presence in the country itself.
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The Australian Dollar enjoyed an increase overnight as manufacturing industries in China acquired even more of Australia’s surplus requirements.

The PMI figure of 50.4 – welcomely higher than the optimum 50.0 required for growth – indicates that the Australian Dollar’s growth looks set to continue, at least for the time being as China turns to Australasia as a realistic solution for its exponential construction requirements.

Online Forex traders should take heed, however. Current forecasts may hint at a continued positive trend, but as yet it is too early to glean a long-term increase.
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One cause of uncertainty hanging over the Forex markets has finally been resolved in the last few hours. The US electorate have now decided who will be in charge of the world’s largest economy for the next four years.

The dollar was gaining ground against the Euro and Sterling in the run up to polling, but saw a small retrace this morning on market expectations of further rounds of quantitative easing.

US businesses and investors are turning their attention more towards the looming ‘fiscal cliff’ and its potential impact on federal deficits and debt. The major credit ratings agencies are maintaining a negative outlook on US debt due to this, with the dollar’s ‘reserve currency’ status being one of the few planks still supporting its elevated rating. If no settlement is forthcoming, the US economy could be shocked into further recession, putting more pressure on the dollar.
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Disappointing Chinese trade data saw Asian stocks declining and the US Dollar and Japanese Yen gain ground as traders turned to these safe haven currencies. The Chinese report showed that imports grew by only 6.3 percent in June, compared to May’s figures of 12.7 percent and the 11 percent analysts had forecasted. This is disappointing and places a question mark on Asian growth as many of the economies in the area rely on China as their main source of demand.

Thus, overnight Forex tsraders saw the USD gain ground while the AUD (Australian Dollar) and NZD (New Zealand dollar) slipped. Clearly, many online traders opted to mitigate risk and buy up the greenback and Yen. (more…)

The German Unemployment Report is expected to support the bleak outlook for the Eurozone as unemployment in the area’s largest economy is forecasted to increase in June. Undoubtedly, the forecast for the Eurozone is not a rosy one, especially considering Greece is expecting a 9% contraction of their (more…)

Wen Jiabao, Chinas premier minister, made it clear yesterday that China will not give in to US and European demands for the Yuan to strenghten. Beijing are becoming more defiant against foreign pressure regarding their currency policy.

“On the one hand, you are asking for the renminbi to appreciate; and for the other hand, you are taking all kinds of protectionist measures”, said Jiabao.

He find that by keeping the Yuan stable against the Dollar, China is contributing to the global recovery. (more…)