Weathering the Storm of the Slipping Dollar

Weathering the Storm of the Slipping Dollar

By: Dane Smith

The greenback has been slipping against the euro, the Chinese yuan, and the pound for the past nine months or so, reaching record lows amidst a global credit crunch and plummeting real estate prices. What does this mean for US growth? According to the Federal Reserve, projected economic growth will slow from more than 2.5, and inflation remains a concern. But one figure does not an explanation give.

The dollar is an indicator of how strong and robust the US economy is, relative to other countries and currencies. As news of record mortgage defaults, volatile markets, and skyrocketing oil prices continue to trickle in from throughout the US, consumer confidence has tumbled and with it their spending has tightened. This signals an impending shift that Americans will have to weather, but which actually provides a useful impetus for making some fundamental changes in the economy.

If Americans are forced to actually save, (rather than going into negative savings, as the average American has within the past two years) a falling currency can actually be absorbed without causing economic devastation. Simply put, most Americans don't plan for their economic future very well, and are in fact in debt more often than not. No matter how much growth the US economy may generally experience, it is unsustainable for our present levels of spending to result in a beneficial outcome indefinitely. Therefore, a falling currency forces a necessary economic reality to be faced, which may have a much better end result, even if the transition is somewhat unpleasant.

A depressing currency also makes US exports cheaper for other countries, hence ensuring that demand for American labor will be attractive to foreign interests. While this may guarantee some growth, if US manufacturers aren't hiring Americans, (because we aren't willing to do the work and illegal immigrants are) the US cannot reap these benefits. Hence another attitude shift is in order: That there are no jobs in America that Americans should be unwilling to perform. This has been a huge strength in US history, as American manufacturing and industrialization fueled its development into an economic powerhouse throughout the twentieth century.

The falling dollar is also beneficial in that OPEC prices oil in dollars. This means that even though oil almost reached 100$ a barrel within recent weeks, it was still less expensive than it could be if they decided to price oil in euros. Therefore OPEC absorbs the weakness of the dollar in tandem with consumers, thus placing no special burden on Americans. If they were to price oil in another currency, Americans would be hard-hit, but perhaps the US would be able to cut back its dependence on foreign oil. It's possible that rising oil prices, coupled with the other factors mentioned, could trigger the growth of alternative energy production on a wider scale.

Above all, the US benefits from a less powerful currency because the current model for economic growth is unsustainable, if not downright foolhardy. In order for America to remain a world leader, it must be able to lead more than amount of products consumed. The US also has to be able to produce more sophisticated solutions for its weaknesses at a lower cost, which it now has the opportunity and incentive to do.

Ki Gray is an Austin real estate broker helping sellers and buyers through the transaction process. His site provides access to the Austin MLS, market analysis on his Austin real estate blog, and Austin real estate information in general

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Currency Trading System - Tips On Getting One for Profit

Currency Trading System - Tips On Getting One for Profit

By: Kelly Price

There are numerous currency trading systems for sale online but 95% of them are junk. There are some good ones out there and they can make you great profits, so follow the tips below and find the best currency systems.

1. Real Track Records

The first point to make is that you should if possible get a system that has a real track record that means real dollars, real trading and audited.

This may not ensure future profitability but shows the logic is probably soundly based and that the vendor has had the confidence to trade it.

2. Simulated Hypothetical Track Records

Most currency trading systems don't come with a real track record but with a simulated or hypothetical one and you need to take these for what they are:

Designed in hindsight knowing the closing prices - there is nothing wrong with back testing but you must ensure the testing was done correctly.

This is the subject of the next point:

3. Beware OF Curve Fitting

Of course it's easy to make profits if you know the forex price data already and many vendors simply make track records up and bend the system to fit the data.

When you see a track record with huge gains and low drawdown the likelihood is the vendor has bent the system rules

It is therefore a good idea to see the system rules - do not try and trade any system you do not know the logic of.

A good currency trading will have simple rules and simple logic.

If they do and the test is realistic then they can work in real time - if their curve fitted they won't work.

Clues to curve fitted systems are:

Lots of rules, unique rules for various trading conditions and different rules, for different currencies.

Curve fitting is the major reason most forex trading systems lose.

Many traders bend the system to fit the data - without realizing but many vendors do it on purpose. This is done to show track records which are simply too good to be true to appeal to the greed of buyers - these people are not traders their normally marketing organizations.

Keep in mind if you see a track record which looks to good to be true it probably is.

THE KEY TO FOREX SUCCESS...

They key to making money with a trading system is to follow it with discipline.

This means you MUST understand the logic it is based on to have confidence to trade it through inevitable losing periods, so you need to understand and agree with the logic.

If you don't have the discipline to follow your currency trading system, you don't have a system.

You will never follow a mechanical trading system unless you have confidence so make learning it part of your forex education.

If you follow the above tips and have realistic expectations from your currency trading system, you check the logic and you're happy with the performance and draw down then you can trade it for real and enjoy currency trading success for very little effort.

NEW! 2 X FREE ESSENTIAL TRADER PDFS AND - PROFESSIONAL TRADING COURSE For 2 free trading Pdf's with essential trading info and more on currency trading systems visit our website at: http://www.learncurrencytradingonline.com/index.html

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Major Forex Indicators

Major Forex Indicators

By: Andrew Daigle

Certain financial indicators have a history of moving the financial markets when the actual numbers don't match consensus. This article explain what some of the better financial indicators are and the ones traders should pay close attention to when trading the forex market.

APICS Survey - The APICS survey provides detailed information of the manufacturing sector. This survey is less well known than the ISM, but can also suggest trends in production. The diffusion index does not move in tandem with the ISM index each month, but sometimes the two do move in the same direction. Since manufacturing is a major sector of economy, investors can get a feel for the general economic backdrop for several investments. These surveys also play an important role in learning forex trading.

Business Inventories - The degree of inventories in relation to sales is an important signal of the near-term direction of production activity. Investors need to monitor the economy closely because it usually dictates how various types of investments will perform. Growing inventories can be an indication of business optimism that sales will be growing in the coming months. By looking at the proportion of inventories to sales, investors can see whether production demands will expand or contract in the near future. The business inventory data provide a valuable forward-looking tool for traversing the economy and it is greatly used while making forex trading strategies.

Chain Stores Sales - It is monthly sales volumes from department, chain, discount and apparel stores. Sales are reported by the individual retailers. Chain store sales are an indicator of retail sales and consumer spending results. Consumer spending accounts for two-thirds of the economy, so if you know what consumers are up to, you will have a pretty good grip on where the economy is headed. Sales are reported as a change from the same month a year ago. It is significant to know how strong sales actually were a year ago to make sense of this year's sales. In addition, sales are normally reported for "comparable stores" in case of company mergers.

Construction Spending - Data are available in nominal and real (inflation-adjusted) dollars. Because of their forex trading strategies, businesses only put money into construction of new factories or offices when they are sure that demand is strong enough to justify the expansion. The same goes for individuals making the investment in a home. That's why construction spending is a good indicator of the economy's momentum.

Consumer Confidence - It is study of consumer attitudes concerning both the present position as well as expectations regarding economic conditions conducted by The Conference Board. The level of consumer confidence is directly related to the intensity of consumer spending. Consumer spending accounts for two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might act in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it's easy to see how this index of consumer attitudes gives insight to the way of the economy. Changes in consumer confidence and retail sales don't move in tandem month by month.

Consumer Price Index (CPI) - It is measure of the average price level of a fixed basket of goods and services purchased by consumers. Monthly changes in the CPI represent the inflation rate. The CPI is the most followed indicator of inflation in the United States, some forex training institutes also keeps record of it for training purpose. Inflation is a general increase in the cost of goods and services. The relationship between inflation and interest rates is the key to understanding how data like the CPI influence the markets. By tracking the trends in inflation, whether high or low, ascending or descending, investors can anticipate how different types of investments will perform.

Current account - It is a measure of the country's international trade balance in goods, services and unilateral transfers. The level of the current account, as well as the trends in exports and imports, are followed as indicators of trends in foreign trade. U.S. trade with foreign countries hold significant clues to economic trends here and abroad. According to forex training experts this data can directly affect all the financial markets, and particularly the foreign exchange value of the dollar.

Andrew Daigle is the owner, creator and author of many successful websites including ForexBoost at http://www.ForexBoost.com and http://www.squidoo.com/forexboost , Free Forex Training Resource for the Novice and Advanced Forex trader.

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Currency Trading Signals - How To Make Huge Profits With Them

Currency Trading Signals - How To Make Huge Profits With Them

By: Monica Hendrix

You currency trading signal is your way of timing the market and determines whether you win or lose and most people lose as they don't understand one key fact behind their currency trading signal so here it is...

The key factor that will determine whether you win or lose long term with your forex trading strategy is - understanding the logic your signal is based upon and most new forex traders in particular, forget this and never make it part of their forex education.

There is a huge industry today in currency trading, where companies and vendors that will sell you currency trading signals and send them to your mobile, or your email box. Most traders simply take the vendors word for it or simulated track record, that these signals will make money.

The trader has no idea of the logic and as soon as they hit a few losses, they throw in the towel.

The same goes for forex traders who buy forex trading system software that generates trading signals. They again accept a simulated track record of profits and have no idea why the system should work (and in most cases it doesn't) and again they throw in the towel when they hit a few losses.

If you want to follow trading signals you MUST understand the logic they are based upon and be convinced it is soundly based, so you can follow the trading systems signals through the bad periods to hopefully, enjoy long term currency trading success.

The equation that is vital to succeed in forex trading (if you follow a vendor) or generate the trading signals yourself is:

Logical methodology = Understanding = Confidence = Discipline = Forex trading success.

Today, too many traders follow vendors who produce enticing marketing copy and make up a simulated track record in hindsight and the trader is blinded by greed and fails to check the logic is sound and that they understand it.

Where and when you enter your trading signal is vital to you winning longer term at FX trading and you need to know the logic, to have confidence in it and the discipline to follow the signals through periods of drawdown.

Trading is only partially method, the overriding reason traders lose is lack of discipline.

The best way to succeed in forex is to do your homework and understand exactly how and why your currency trading signal is generated, by learning your vendors system and testing it or even better building your own system.

If you want to learn forex trading the right way you need to understand the logic that your currency trading signal is based upon - PERIOD.

NEW! 2 X FREE ESSENTIAL TRADER PDFS + PROFESSIONAL FOREX TRADING COURSE

For 2 free essential trading Pdf's with 90 of pages of essential info and more on Currency Trading Signals for profit visit our website at: http://www.learncurrencytradingonline.com/index.html

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Online Forex Trading: What Kind of Forex Broker Should You Look For?

Online Forex Trading: What Kind of Forex Broker Should You Look For?

By: Peter Halpin

Foreign currency trading, or forex trading, has become a very popular market worldwide, mainly because of its liquidity and 24 hour trading cycle. This tends to eliminate those nasty overnight "price gaps" which traders of the stock market fear. This is one of forex trading's most attractive features. Being able to trade outside of normal working hours is another.

To make a living from forex trading, you need a reliable trading platform that is easy and convenient to use and offers the same tight spreads to large and small players alike. You also want a system that offers the ability to test your trading approach before committing real money.

Your preference should be a system that you can use to place or close a trade pretty much anywhere there is an internet connection. The factor that allows you to do this, is that your broker's interface allows you the option of trading using a Java based system. This is another way of saying you don't have to download any special software which could only be used on your PC or laptop.

This is a big plus, because it means you're not tied to your own computer in order to trade. You can do it at the library, internet cafes, even at your work PC because your trading interface with your broker is "web based" not software based.

But for all those extra little features, your broker should also provide downloadable free trading station software, which gives you full featured charts and other decision making tools.

An example of a trading platform which does all this, is Forexyard. This company has brought together some very talented and well educated professionals, to produce a system that offers excellence in online FX Trading with a worldwide client base.

Another important feature you want, is ease of establishing an account. You'd like to be able to sign up online and start trading within minutes using your credit card to fund your account, especially if you've just become aware of a great trading opportunity and don't want to miss it. Credit card security and your personal privacy is important as well. Some brokers like Forexyard offer a "SuperMini" account, where you can start trading with as little as $100.

You also want a broker that makes withdrawing funds an easy process, particularly if you're only a small trader.

It is common among many forex market makers to freeze their spread prices when price spikes occur. A trader's worst nightmare is getting frozen out and unable to exit when a sudden price move, either in your favour or otherwise, takes place.

Another big item is a forex trading platform which has a uniform commission or spread policy for all. Clients with small accounts should have the same advantage as the professionals, so you want a broker who gives the same tight spreads across the board. Many brokers only offer these to more experienced account holders, while less experienced clients are given spreads 1-3 pips higher. A "universal pip rate" is a big plus.

You want to be able to practice trading with live charts and real-time prices without using real money? You should look for a forex trading platform that offers a "virtual trading" demo-account facility. This is a great way of testing out trading systems, particularly if you use technical analysis as your decision making tool.

Finally, you want a broker whose package includes well informed forex training and education, as well as current market trends and analysis. You would want to include in this, information on charts and proven technical analysis techniques.

Good brokers or market makers like Forexyard and others, offer all the above features and benefits. Investing your hard earned money with them can make all the difference to your forex trading experience.

For an interesting review about the Forexyard foreign currency trading platform at http://forexyardreview.com

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Bet on further Dollar weakness

Bet on further Dollar weakness

By: Mike Wright

The economic roller coaster continues, but unfortunately sick bags will not be provided says BetOnMarkets.com's Michael Wright.

Wall Street resumed its slide last week, as the uneasiness about the wilting mortgage market and concerns about the broader economy, triggered selling ahead of the unofficial start to the holiday shopping season. The Standard & Poor's 500 index and the Dow Jones industrial average were both hurt by traders unwinding positions going into the Thanksgiving holiday weekend.

The decline in the markets has put the S&P 500, FTSE 100 and French CAC indices in negative territory for the year. Many investments such as such as ISAs or tracker funds simply track the benchmark markets, which means that at the time of writing, a lot of passive investors are looking at negative returns for 2007.

The stock market has been thrashing about recently as investors attempt to gauge how companies will fare amid a further slowdown in the U.S. housing market, a deterioration of credit, and record oil prices. Up to last Wednesday's slide, stocks had fallen in eight of the 11 last sessions.

In economic news, the US Conference Board suggested an economic slowdown could accelerate in the coming months, amid rising costs and further weakness in the housing market. Also, the Reuters/University of Michigan Consumer Sentiment Survey showed its lowest reading in two years - an unwelcome development for retailers entering what is for many, the most important period of the year.

Investors turned to government bonds amid the uncertainty. The yield on the 10-year US Treasury note, which moves inversely to its price, fell to 4.01 % from 4.09 % late Tuesday. This flight to quality is occurring as LIBOR rates tick up again, and many debt auctions are pulled.

All of this didn't do much to help the US dollar, which over the last few weeks has been weaker and weaker against the major currencies. At the time of writing the EURO was worth 1.4860 USD and the GBP was trading at 2.0655 per US dollar. Since 2003 central banks have gone on record to announce that they are diversifying away from US denominated holdings, and buying euros and gold. There has also been anecdotal evidence of the Dollars' decline, with supermodel Giselle Bundchen demanding payment in Euros, and recent rap videos displaying wads of Euros instead of Dollars.

The decline has accelerated in recent months as traders price in a weaker US economy and further currency eroding rate cuts. With signs that the US economy is no longer creaking, but cracking, a weak dollar may be here to stay for the foreseeable future. In short, this may not be a temporary weakness.

The average trader can profit from the decline of the US dollar, by buying a Betonmarkets.com 'no touch' option. This compensates the trader if the underlying market doesn't touch the predetermined level.

A No touch option on the Euro/USD exchange rate with a 20-day duration, and 550 points (5.5 cents) away from spot, pays 8%. This mean that the Dollar could weaken further, strengthen slightly, or stay where it is and the trader would still win.

- THE END -

Contact Details:

Name: Mike Wright Tel: 448003762737 Email: editor@my.regentmarkets.com Url: Betonmarkets.com & Betonmarkets.co.uk

Address: Regent Markets (IOM) Limited 3rd Floor, 1-5 Church Street Douglas, Isle of Man IM1 2AG

Regent Markets is the world's leading fixed odds financial trading group. Through its main multi-awarding winning websites, BetOnMarkets.com and BetOnMarkets.co.uk, it has established itself as the leading global provider of a unique, powerful way to trade the world's major financial markets. The number, length and variety of trades available to our clients exists nowhere else in the world.

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Why Interest Rates Matter

Why Interest Rates Matter

By: Jon Beddell

Markets can be volatile, or to put it another way, fickle! One of the main drivers behind currency movements are interest rates. Each economic area has its own central bank which sets interest rates according to its outlook for growth and inflation.


The aim of monetary policy is to walk a tight rope between stimulating growth, and staving off inflation. All other things being equal, demand for each currency is largely dependent on these relative interest rates, as investors from around the world move money around in search of the best return.


For example, the central bank rate in New Zealand is 8.25%, which means there is plenty of demand for the currency. By contrast, the yen offers just 0.5%, and until recently has been very weak against other major currencies as investors attempt to exploit this difference by making so called carry trades (borrowing in one currency with low interest rates and investing the money in another currency with a higher interest rate).


More relevant to anyone buying a property abroad over the next year is how interest rates are having a negative effect on the pound. When the credit crunch became big news in the summer, the US Federal Reserve acted quickly to cut interest rates. As it did so, investors naturally dumped the dollar in favour of other major currencies whose interest rates were not falling, namely the euro, and to a lesser extent the pound. The euro/dollar and sterling/dollar exchange rates rose sharply as a result.


Since then it has become increasingly apparent that the Bank of England will also cut interest rates in the next couple of months. Investors now have good reason to add sterling to their list of currencies to be avoided, especially while uncertainty remains over the timing of any cut.


Meanwhile, the European Central Bank are keeping rates on hold, with no clear indication of any rate cuts in the pipeline, making the euro a relatively safe bet in the short term. So in summary, the relative allure of the Euro has grown as the interest rate advantage of holding sterling or dollars has diminished.


Of course, for anyone buying dollars, the extreme weakness in that currency means you can still get a great exchange rate!

This article is brought to your by http://www.TorFX.com, Specialists in foreign currency exchange. For the latest foreign currency exchange rates visit http://www.TorFX.com

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