Techniques for Advanced Forex Trading

Forex is a potential platform for earning substantial profit. In fact it is one of the largest trading markets of the world. Featuring an average daily trade of US$ 2 trillion and above, this market is best known for its high scale trading volume and intense liquidity. Adding to this, today with the advancement of technology it can be done from anywhere of the world. Backed up by world-wide web, you can easily trade in the forex market at the comfort of your own home. However, it is important to understand that fx trading is based hugely on speculation. You must be smart enough to guess exactly when the rate of a certain currency pair will rise and go down, and then buy or sell based on that. Indeed it is said that if you learn to study the speculation of this market, you will have a better chance of getting profit.

Today, it is more advanced and turned into an active investment arena, where only a factual understanding of the intricacies and complexities can make your capital grow every day. Moreover, like any other business, it also involves some amount of risks. There is no shot fx trading technique for success in the currency trading market, but there are some well-known techniques that can assist you formulate a good advanced foreign exchange trading strategy. Here are few essential techniques that can help you cut your losses and increases profits:

Forex Scalping: It is a latest technique of trading where profits are taken after relatively small moves in the forex market. It is a technique where trading is done over small time frames, and smaller profits are taken more frequently. As the position exposed to the market is shorter, it automatically reduces the risk of adverse market events causing the price to go against the trade. It is a different approach to most other forex strategies, but still requires you to analyze the market to ensure that the set up for a trade is present. This type of trading greatly appeals to day traders and those who look to reduce the risk involved in trading currencies.

Forex Hedging: It is a technique that helps in reducing some of the risk involved in holding an open forex position. It decreases the risk by taking both sides of a trade at once. If your broker allows it, a simple way to hedge is just to initiate a long and a short position on the same pair. Advanced traders sometimes use two different pairs to make one hedge, but that can get very complicated.

It is important to understand that much of the risk involved in holding any forex position is market risk; i.e. if the market falls sharply, your losses may escalate dramatically. So if you have an open Forex position with fine projection but you think the currency pair may reverse against you, it is advised to hedge your position.

Forex Position Trading: Forex position trading approach is yet another trouble-free technique to boost your position size without increasing your risk. This trading tactic is very effective with mini lots. The major highlight with this technique is that - with forex position trading your exposure to the market is less and so therefore is no need to monitor the market continuously. Moreover, you may even earn profit with negligible loss that can further boost your trading confidence. For Example- you might make a short trade on EUR/USD at 1.40. If the pair is ultimately trending lower, but happens to retrace up, and you take another short at say 1.42, your average position would be 1.41. Once the EUR/USD drops back below 1.41, you will be back in overall profit.

Today forex trading is all about watching your options when you make a trade. Aside from using effective risk management and extreme vigilance, advanced trading can be an alternate way to make profits and control losses. Nevertheless, these above mentioned advanced trading techniques are more about using the market behavior to your advantage. Utilizing these advanced techniques can give you the edge from other average trader.

Dollar Tree reports jump in second-quarter sales over last year

Dollar Tree Inc. announced today that sales for the second quarter jumped nearly 12 percent from the prior year to $1.2 billion.

Sales in comparable stores -- those open at least 12 months -- rose 6.8 percent in the quarter, which ended Aug. 1. Data for comparable stores provide the best measure of year-to-year performance.

That growth comes on top of a 6.5 percent increase in comparable sales in the second quarter of 2008. It also continues Dollar Tree's momentum during the recession, as shoppers spend more at its all-for-$1 stores on food and other household basics.

Bob Sasser, the retailer's chief executive, said customers in the second quarter also scooped up health and beauty items, party supplies and "hot summer deals." Dollar Tree, with headquarters in Chesapeake, plans to release its full quarterly earnings results Aug. 26.

UPDATE 10-Oil slips as U.S. jobs data boosts dollar

U.S. July unemployment data better than expected
* Offshore crude storage up sharply in last 2 weeks (Updates with settlement prices, replaces last graph on offshore storage)
By Matthew Robinson
NEW YORK, Aug 7 (Reuters) - Oil fell from six-week highs on Friday, pressured by gains in the dollar following the release of better-than-expected U.S. job-loss numbers.
U.S. employers cut 247,000 jobs in July, far less than expected and the least in any month since last August, according to a government report, adding to optimism that the world's largest economy was turning around. [ID:nN07385157]
"The jobs report was a mixed bag for crude traders. On the one hand, it was good for fundamentals for people to be working and able to buy things," said Chris Jarvis, senior analyst at Caprock Risk Management in Hampton Falls, New Hampshire.
"But it could mean that Europe will be seen as the lagging market and get people to short the euro, and a stronger dollar longer term, and put some pressure on commodities."
U.S. crude settled $1.01 lower at $70.93 a barrel, after touching a six-week high of $72.84 earlier. London Brent crude fell $1.24 to settle at $73.59 a barrel.
The drop came as the dollar gained against the euro and the yen, putting pressure on commodities denominated in the greenback. [.N] Wall Street gained following the release of the U.S. jobs data.
The economic crisis has damped fuel demand, pushing crude from record highs near $150 a barrel in July 2008 to below $33 a barrel in December.
Oil prices have found support from optimism that a potential turnaround in the economy could boost flagging fuel consumption, although global inventories of crude remain high, especially in top consumer the United States. [EIA/S]
Several industry sources estimated that there were 70 million barrels of crude oil being stored at sea. While the estimates vary from around 60 million to 100 million barrels, most sources agree offshore storage levels rose by around 10 million barrels in the last two weeks alone.

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TOKYO, Aug 6 (Reuters) - Gold inched up on Thursday, drawing
support from the dollar's weakness against the euro and investor
risk appetite that has helped boost assets across markets, but
prices were capped as investors grew wary of high price levels.

Gold hit a two-month high earlier in the week on the dollar's
drop and a broad rally in commodities and equities, as hopes for
an economic recovery encouraged funds to pour money into a wide
range of assets.

Traders said investors may become cautious about pushing
prices higher given the elevated market levels, as well as
physical demand remaining weak and gold losing its appeal as a
safe haven as sentiment about the economy improves.

"We'll see further weakness in the dollar which is very
supportive to the gold market, but in 2009 we have seen gold
struggle to maintain its momentum when it got to the high
$900s-$1,000," said Toby Hassall, an analyst with CWA Global
Markets in Australia.

"I wouldn't be surprised if the market fails to break above
$1,000," he said.

Spot gold XAU= was up 0.2 percent at $963.60 per ounce as
of 0250 GMT, compared with New York's notional close of $961.95.

U.S. gold futures for December delivery GCZ9 eased 0.1
percent to $965.40 an ounce, compared with $966.30 an ounce on
the COMEX division of the New York Mercantile Exchange.

As optimism about the economy grows, other products such as
silver, copper and oil have become a focus due to their
exposure to industrial use, Hassall said.

"As things are getting better and money flows into riskier
assets, funds are looking to get exposed to industrial demand.
Gold has been out of focus, with fear moving out of the market as
the volatility index .VIX fell," he said.

The dollar stayed near its 2009 lows against the euro on
Thursday on hopes a slower pace of U.S. private job losses in
July hinted at a gradual improvement in the economy. [USD/]

The impact on gold from the U.S. nonfarm payrolls data due on
Friday will depend on how currencies react, traders said. With
the recent markets' rally based on expectations the U.S. economy
is improving, a negative surprise could erode some of the
optimism.

Gold futures dipped on Wednesday as weaker equities prompted
funds to consolidate recent profits.

U.S. stocks slipped on Wednesday as the market took the
weaker services sector and private payrolls data as cooling
recent optimism the recession was retreating, but the market
finished off its lows as investors ventured into riskier
financial shares. [.N]

Asian stocks fell on Thursday, led by a more than 3 percent
drop in Chinese stocks on worries about adjustments to monetary
policy that might impact market liquidity. [ID:nPEK368445]

Base metals also fell sharply on Thursday after rising to
multimonth peaks in previous sessions.

Physical demand is generally weak and the fairly high price
of gold in a historic context might limit the market impact from
an expected pick-up in Indian demand this month, traders said.

Indians have started buying gold jewellery and wholesalers
are stocking up against anticipated price rises as the busy
season gets under way in the world's largest bullion consumer.
India, accounting for over 20 percent of global demand for gold
jewellery in 2008, celebrates several Hindu festivals this month,
when demand for bullion usually picks up. [ID:nSP91056]

The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust GLD, said holdings stood at 1,072.87 tonnes as
of Aug. 5, unchanged from the previous business day. [GOL/SPDR]

PRICES
Precious metals prices at 0250 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 962.55 0.60 +0.06 9.36
Spot Silver 14.60 -0.04 -0.27 28.98
Spot Platinum 1277.50 -5.00 -0.39 37.07
Spot Palladium 273.00 0.00 +0.00 47.97
TOCOM Gold 2950.00 -4.00 -0.14 14.65 24202
TOCOM Platinum 3906.00 33.00 +0.85 47.29 15256
TOCOM Silver 446.90 0.70 +0.16 39.96 84
TOCOM Palladium 842.00 -16.00 -1.86 53.09 182
Euro/Dollar 1.4390
Dollar/Yen 94.97
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.

Three Banks Face CBN's Sanctions Over Forex Scam

The Central Bank (CBN) will, this week, withdraw the foreign exchange authorised dealership of three banks and suspend them from the foreign exchange market for three months for engaging in foreign exchange speculation.

Meanwhile, foreign exchange demand at the official foreign exchange market rose by 351 per cent even as the naira depreciated by 400 kobo at the parallel foreign exchange market.

JAPANESE FINANCE REG. TO CAP LEVERAGE ON FOREX MARGIN TRADING

Japan's Financial Services Agency will limit foreign exchange traders' leverage on margin transactions, drawing down the multiple in two stages to 25 times collateral by August 2011.

The financial watchdog proposed the regulatory changes in May. Despite widespread opposition to such a cap expressed in the public comment period, the agency on Friday decided to revise the regulations, citing the risk of highly leveraged trades and the need to protect consumers. The Japan Federation of Bar Associations was among those supporting the measure.

The leverage multiple will initially be capped at 50 in August 2010, and then reduced to 25 a year later.

Central Bank to restart dollar purchases

Turkey’s Central Bank said it will resume buying dollars through daily auctions starting Tuesday, taking advantage of a stronger lira to strengthen its reserves.
The Bank will buy $30 million a day with an option to purchase an additional $30 million, it said in an e-mailed statement from Ankara Monday.
International risk appetite has risen, increasing capital flows to Turkey and making “conditions right for the Central Bank to strengthen its reserves,” the statement said. The Turkish Lira has gained 18 percent against the dollar since March 9, when it hit a record low at 1.808 per dollar.
Mehmet Büyükekşi, head of the Turkish Exporters’ Assembly, on July 23 urged the Bank to buy dollars to curb the increase in the lira, which he said is damaging exports. Central Bank Governor Durmuş Yılmaz said on July 29 he was considering a restart to the purchase auctions, which were last held on Oct. 15.
The lira weakened after the announcement, dropping 0.1 percent to 1.472 per dollar after rising as much as 0.2 percent earlier.
The Central Bank had reserves of $65.8 billion on July 24, according to the latest data. It sold $900 million for lira through daily auctions in March as the currency weakened against the dollar.

Dollar rises as RBA drops easing bias

The Australian dollar set a high for the year on Tuesday for the third day in a row as the RBA dropped its easing bias, suggesting rates could rise here well before the rest of the developed world.
The Reserve Bank of Australia left interest rates unchanged at 3 per cent, but closed the door on the chance of further easing in an expression of confidence on the economy at home and abroad.
Yet it also said low rates were appropriate, curbing the most extreme speculation in the market that it might tighten by year-end or even earlier.
The Aussie had risen a cent to as far as $US0.8471 before the announcement, but drifted off to $US0.8422 after as the statement was not as hawkish as some had wagered on.

At the close of local trade, the dollar was buying $US0.8433, up form yesterday's close of $US0.8357.

"The market was quite long going into the RBA so it kind of dribbled off after that," said Matthew Brady, a trader at JPMorgan.
Against the yen, the Aussie rose to as far as 80.61 yen, before pulling back to 80.12.
Brady said the recent spurt in the Aussie, which has jumped over 7 per cent from a low of $US0.77 in the last three weeks, may have legs to run further as fund managers were still buying the local dollar.
He said option levels are seen at $US0.8475 and $US0.8500, which meant the Aussie could bounce sharply if these levels are breached. Option levels on the downside around $US0.8380, then $US0.8340 will prove to be firm support levels.
Bill and bond futures were down again, though they did pare losses as investors rowed back a little on the chance of early and sizable rate hikes.
December bill futures lost 0.13 points to 96.26, while three-year bond futures fell 0.12 points to
94.93.
Ten-year bond futures eased 0.035 points to 94.38.
Expectations of rising local rates have seen Australia's yield curve undergo a bear flattening. The spread of 10-year government cash bonds over their three-year counterparts narrowed to 79 basis points on Tuesday, the lowest since December.
Some economists said investors were too aggressive in pricing in rate hikes by Christmas, since the outlook to the world economy remained uncertain.
"Given that the RBA still sees "sluggish" domestic output near-term and a "modest" global recovery ... we continue to expect the RBA to hold rates steady until at least second-half 2010," said UBS in a research note.
Implied money market rates show investors are pricing in rate hikes of 152 basis points over the next year.
If the RBA does indeed eventually raise rates, it would likely be the first central bank in the developed world to do so, and that would further boost the Aussie's yield allure.

Sterling adds to gains, hits 9-mth high vs weak dollar

Sterling hits 9-mth high vs broadly weak dollar * Pound edges closer to 2009 high vs currency basket * Strong UK PMI, bank earnings continue to support sterling

LONDON, Aug 4 (Reuters) - Sterling hit a nine-month high against a broadly weak dollar on Tuesday, extending its rally in the aftermath of strong UK manufacturing data and optimism about the health of domestic banks.

The UK currency leapt as high as $1.7005 in Asian trade, boosted after a regional rally in share prices to an 11-month high, which stoked demand for risk to the detriment of the safe-haven dollar.

"The generally weak dollar is driving the move in sterling today," said Jane Foley, research director at Forex.com in London, noting that the dollar hovered near its lowest level of the year against a currency basket.

"If we are to see a significant move higher in sterling in the near term, it will have to come from a move lower in the dollar."

Sterling was flat against the dollar at $1.6930 at 0807 GMT, pulling back from $1.7005, its highest level since mid-October. A 0.5 percent slide in UK shares .FTSE during early trade helped trim some of the pound's early gains.

The UK currency climbed more than 1.3 percent against the dollar on Monday, when a UK purchasing managers' index showed growth in the manufacturing sector.
In addition, a boost in bank shares after earnings results from HSBC and Barclays PLC the previous day also offered an upward thrust to the pound, which is often closely correlated with movements in bank shares given the significant impact of the banking sector on the wider UK economy.


The pound was supported against the euro EURGBP=R, which slipped 0.2 percent to 84.97 pence and stayed near a one-month low around 84.59 pence hit on Monday. Against a currency basket, the pound =GBP was at 84.6, a shade under the 2009 high of 84.7 hit in June.

Markets are awaiting the outcome of the Bank of England's policy meeting on Thursday. With interest rates expected to remain steady, the focus is on the future of quantitative easing. [BOE/INT]
Whether the central bank will pause or expand its 125 billion pound asset-buying programme still looks to be a close call. But some analysts expect a sterling-positive outcome, at least in the short term.

U.S. Dollar Breaks Its December Lows

The dollar's steady descent continued with Monday's long anticipated break of the December lows (see chart below). While I fully expected the dollar to reach this point, I thought a stronger relief rally would ensue before we got here. The dollar's "fate" seemed sealed after the Canadian authorities signaled resigned acceptance of their currency's strength against the US dollar. As the dollar continues to roll back the gains from its earlier status as a safe haven currency, I am still left wondering at what point will America's trading partners begin to voice concerns about how dollar weakness will hurt their own exports. Americans are already saving a lot more, and the propensity to save should get stronger as imports continue to get more expensive (this relationship of course was VERY broken during our credit bubble as rapidly expanding debt became a very convenient way to finance increasing net consumption of imports). Then again, economic recovery seems to be all about China and any company fortunate enough to be doing business there, so it is possible that finance ministers outside of China and Russia are not going to worry as much as they otherwise might have done.

From a technical standpoint, a strong US dollar relief rally in the coming week or so still seems likely given the synchronous multi-month highs being made by so many currencies against the dollar (for example, the Euro, Pound, Australian Dollar, and Canadian Dollar). These moves have likely created very crowded dollar shorts.

Finally, I had expected that a break of the December lows would deliver gold above $1000/ounce and silver at fresh 52-week highs. Instead, both metals remain below their highs for the year even as other commodities and materials such as copper and steel continue to soar ever higher (despite growing questions as to whether China's stocking of commodities can or will continue much longer). I suspect that the loss of the fear component of the gold and silver trade is suppressing prices a bit, but as the dollar continues to weaken, these two metals should shine even brighter.

EUR/USD: The Euro could continue to 1.4600

Euro rally from levels around 1.4100 has reached 2009 high at 1.4445 so far, and the Euro is moving in a range around 1.4000 at European session opening, although Nicole Elliott, senior technical analyst at Mizuho Corporate Bank considers that the common currency could appreciate to 1.4600 and beyond.

The Euro should follow Dollar weakness: "Against what is expected to be generalised US dollar weakness the Euro should follow the leaders, currently the Swedish krona and Brazilian real. Our measured targets are 1.4600 and eventually the psychological 1.5000."

Concerning strategy, advices to go long at levels below 1.4400: "Attempt longs at 1.4385, adding to 1.4310; stop well below 1.4200. Short term target 1.4430, then 1.4545 and after that 1.4635."

SOUTH KOREA EXPECTS FOREX RESERVES TO HIT RECORD HIGH

South Korea's foreign exchange reserves are expected to hit a record-high of US$270 billion this year, bolstered by the local currency's gains and an expanding current account surplus, the finance ministry said Sunday.

The Ministry of Strategy and Finance predicted Korea will continue adding to its reserves in the second half, pushing their total value past the current record of $264 billion, reached in March last year.

"South Korea's FX reserves will possibly exceed the previous record as the country is expected to continue to log massive surpluses in the current account, and the stabilization of the local currency is also forecast to add to the value of the reserves," an official from the ministry said.

The country's foreign exchange holdings increased for a fourth month to $231.7 billion in June, the highest level since September.

They sank to the lowest level in nearly four years in November as the government handed out foreign currency funds to local banks, who were struggling to service their debts because of the Korean won's sharp depreciation and a global credit crunch.

The reserves began to gain in March as the country registered current account surpluses.

The surplus reached the second-highest level ever at US$5.43 billion in June, after rising for a fifth straight month on reviving exports.

The won has made a remarkable recovery in that time, climbing almost 28 percent against the U.S. dollar since hitting an 11-year low in early March.

This has helped to lift reserves by driving up the value of assets denominated in foreign currencies.

The reserves will also get a boost from the government's plan to retrieve foreign currency funds extended to the banking system as well as its issuance of around $3 billion foreign-exchange stabilization bonds, scheduled for the second half of the year, the ministry said.

Adding to the optimism, data by the International Monetary Fund showed South Korea's reserves grew at the second-fastest pace among member countries.

The country's holdings rose by $14.3 billion at the end of May from a month earlier, the fastest clip after Russia.

The data excluded China due to an absence of available statistics.

"Government authorities generally favor higher FX reserves since the global financial crisis in September although they were previously concerned about excessive holdings," a finance ministry official said.

Daily Exchange Rate

Currency	bid	offer	Time
EUR/USD	1.43889	1.43898	Tue Aug 4 07:19:59 2009
USD/JPY	94.663	94.675	Tue Aug 4 07:19:59 2009
GBP/USD	1.69423	1.69441	Tue Aug 4 07:19:59 2009
USD/CAD	1.06780	1.06825	Tue Aug 4 07:20:00 2009
USD/CHF	1.06284	1.06302	Tue Aug 4 07:19:47 2009
EUR/JPY	136.209	136.236	Tue Aug 4 07:19:59 2009
EUR/GBP	0.84926	0.84943	Tue Aug 4 07:19:59 2009
EUR/CHF	1.52934	1.52953	Tue Aug 4 07:20:00 2009
GBP/CHF	1.80083	1.80125	Tue Aug 4 07:19:59 2009
GBP/JPY	160.378	160.417	Tue Aug 4 07:19:59 2009

Rupee strengthens as Dollar drops overseas

Mumabi: The Indian rupee rose on Wednesday, buoyed by weakness in the US unit versus majors overseas but pared some of its rise in mid-morning trade as local shares turned negative after having risen nearly 1% early.

At 10:55pm, the partially convertible rupee was at Rs47.69/70 per dollar, off an early high of Rs47.595, but still a little stronger than its previous close of Rs47.73/74.

On Tuesday, the rupee had risen to as much as Rs47.43, its strongest since 12 June. “The rupee has gained as expected. It should be rangebound today with a slight downward bias. Rs47.50-47.80 is the expected range for the day,” said Ashtosh Raina, head of foreign exchange trading, at HDFC Bank.

Dealers said weakness in the dollar versus majors and a positive start to the domestic share market had helped the rupee rise, but added that they would be watching out for cues on direction of capital flows.

The dollar was steady near 2009 lows against the euro and sterling on Wednesday, after a surprisingly strong US housing report the previous day boosted hopes that the worst of the recession was over.

The dollar index, a gauge of the US units performance versus six majors, was down 0.1%. Most Asian units were also stronger against the dollar.

Shares rose 0.9% early with positive economic data from the United States lending support, but were trading down 0.3% as caution prevailed across Asia after the recent rally.

Foreigners have so far in 2009 bought $7.6 billion worth of local stocks, after net sales of more than $13 billion last year.

One-month offshore non-deliverable forward contracts were quoting Rs47.71/81, largely unchanged from the onshore spot rate, indicating a bullish outlook in the near term.

Employees' pension program 10 trillion yen in red

Depressed stock prices, deficits in public pension programs nearly doubled to 10.1795 trillion yen in fiscal 2008 from the previous fiscal year, the welfare ministry reported Tuesday.

In addition, the national pension program for self-employed, unemployed, part-time workers and other people chalked up a red ink figure of 1.1216 trillion yen, the ministry said.

The deficits, based on market values, were the largest since fiscal 2001. Comparable data for the period before that was not available.

Both pension programs were in the red in fiscal 2007 as well. The deficit for the employees' pension program at that time came to 5.5909 trillion yen and the national pension program ran a loss of 777.9 billion yen.

The Ministry of Health, Labor and Welfare attributed the biggest losses mostly to investments in reserve funds. The global financial crisis that flared last September caused share prices to tumble.

The employees' pension program lost 8.7252 trillion yen through various market investments in fiscal 2008, and the national pension program was down 592.4 billion yen, the ministry said.

The reserve funds in both programs fell sharply to 116.6496 trillion yen for the employees' pension program, down 13.5314 trillion yen from fiscal 2007, and to 7.1885 trillion yen for the national pension program, down 1.2789 trillion yen.

As for revenues, the employees' pension program received premiums worth 22.6905 trillion yen in fiscal 2008, up 721.4 billion yen from fiscal 2007.

The higher revenue owed largely to the fact that 496,000 more people were in the program than in the previous year due to a relatively stable labor market at the beginning of fiscal 2008.

As for the national pension program, 752,000 fewer people paid premiums than in the previous year, mostly because many baby boomers reached an age and no longer had to pay them.

This was a main reason for the drop in the program's revenue for fiscal 2008 to 1.747 trillion yen, down 111.2 billion yen from fiscal 2007.

Because pension benefits are funded by both premiums and tax money, deficits in a single year will not immediately affect payouts.

"We have devised long-term prospects for pension financing, taking into consideration stock prices and other factors up until the end of last year," said a welfare ministry official.

"A balance between the burden and the payments will be maintained in the future," the official added.

However, if the economic slump continues for a prolonged period, pension benefits could drop in the future.

Malaysian Ringgit Tumbles Against Dollar

The Malaysian ringgit plummeted to 3.5030 against the U.S. dollar at 2:20 am ET Wednesday. On the downside, 3.510 is seen as the next target level for the Malaysian currency. The dollar-ringgit pair closed yesterday's North American session at 3.4895.

Japan to cap forex margin

TOKYO (Agencies): Japan’s foreign exchange margin traders will have their leverage capped at 25 times collateral two years from now, the government said on Friday, a move that could curb retail investors’ zest for currency speculation. The Financial Services Agency said leverage would be capped at 50 times starting in August 2010, and at 25 times starting a year after that, in line with a proposal it unveiled in late May. That would be a big cut for some brokers who offer leverage of 400 times or more, and for margin brokers in general. Foreign exchange margin trading, which allows investors to make large bets with relatively small amounts of money, has boomed in the past few years as Japanese households, dissatisfied with puny interest rates at home, looked abroad for higher yields. In a sign of their growing clout, a Bank of Japan report said last year that foreign exchange margin trading in Japan may account for 10 percent of all yen spot trades conducted globally each day.

US Dollar, Japanese Yen Gain Ahead of Bank of Japan's Rate Decision

The US dollar and Japanese yen were two of the strongest major currencies on Monday, just behind the New Zealand dollar, as uneasy risk appetite weighed on the S&P 500 and DJIA. The moves suggest that Friday wasn’t necessarily a turning point for the greenback after the release of better-than-expected US non-farm payroll results provided a boost to both the currency and US equities, but with event risk due to pick up later in the week, we won’t jump to conclusions.

Though not incredibly market-moving for the Japanese yen, it’s worth noting that the Bank of Japan will announce their latest rate decision overnight. The BOJ is anticipated to leave rates unchanged at 0.1 percent, and while some economic indicators - including machine orders, industrial production, and manufacturing PMI - have shown signs of improvement, the central bank is likely to continue focusing on risks stemming from persistently weak domestic demand and deflation.On August 12, traders will be watching the release of the Federal Reserve’s rate decision. The Federal Open Market Committee (FOMC) is widely expected to leave the fed funds target range at 0.0 percent - 0.25 percent, but the statement could spark heavy volatility if the FOMC announces an expansion of their QE efforts or an elimination of them. Generally, signs that the central bank may increase Treasury purchases have been negative for the US dollar, but indications that they will complete the program within the next month or so could send the greenback spiraling higher. Though highly unlikely, any change to previous wording that “economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period” are sure to spark heavy volatility throughout the financial markets

OIL FUTURES: Crude Futures Slip Lower On Rebounding Dollar

NEW YORK (Dow Jones)--Crude futures ended lower Monday as the dollar rose against the euro and equities fell.

Light, sweet crude for September delivery settled down 33 cents, or 0.5%, at $70.60 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled nine cents, or 0.1% lower, at $73.50 a barrel.

The dollar advanced Monday to a one-week high against the euro. A stronger dollar makes crude more expensive for holders of other currencies. The euro was recently at $1.4116, down from $1.4219.

Crude futures have risen almost 20% since July 13 on expectations an economic recovery will galvanize oil demand. Upbeat data showing U.S. unemployment fell to a surprising 9.4% in July sent prices rising close to $73 a barrel Friday, but a rebounding dollar capped gains.

"The ongoing strength in the dollar quelled the upward momentum in the oil market," said Stephen Schork, editor of the energy newsletter The Schork Report.

Crude has been caught in a tug-of-war between bulging oil inventories and hopes of an economic rebound. Sliding equities, a barometer for the health of the economy, exerted further pressure on crude prices. The Dow Jones Industrial Average was recently down 46.53 at 9323.44.

"We'll stay in this range until will get a weather event or we get a change in supply from OPEC," said Morgan Downey, a commodities trader with Standard Chartered PLC in New York.

The National Hurricane Center is tracking a pair of storm systems, including one southwest of the southern Cape Verde Islands that could become a tropical depression in the next day or two. Another storm, with a low potential for tropical cyclone formation, was near the Windward Islands. Neither is considered to pose a serious threat to energy infrastructure, but serve as a reminder that the normal peak of hurricane season has arrived.

Meanwhile, quota compliance by Organization of Petroleum Exporting Countries is deteriorating, according to the latest Dow Jones OPEC-11 survey, falling to 73% compared with the 76% achieved in June, as producers seek to take advantage of higher oil prices.

Front-month September reformulated gasoline blendstock, or RBOB, settled up 1.93 cents, or 1%, at $2.0274 a gallon. September heating oil settled up 1.54 cents, or 0.8%, at $1.9276 a gallon.

More information on settlements and highs and lows for futures on Nymex and ICE platforms can be found by searching for the following headlines:

Nymex Light Crude Oil Close

Nymex Harbor RBOB Gasoline Close

Nymex Heating Oil Close

ICE Brent Crude Oil Close

ICE Gas Oil Close

Growth Surprise Boosts Euro

Growth Surprise Boosts Euro

Patterns in the forex markets seem to be changing: over a long period of time, whenever the crisis intensified, the dollar and the yen benefited. The more confident market participants became, the more the euro strengthened. Most other industrialised and emerging market currencies benefited from increasing risk appetite as well. As confidence grows that the economy could have bottomed out, markets are now focusing more on comparing developments in individual countries, particularly the pace of recovery in these regions, and when they could decide to end expansive monetary policies and quantitative easing measures.
After the release of the US labour market report last Friday, both the euro and the yen had suffered badly. USD-JPY rose by 2 ½ yen to 97.50, EUR-USD fell from 1.4350 to 1.4150. Then, however, in the run-up to the FOMC meeting, the US currency began to weaken again - presumably mainly because market participants were expecting the Fed to remain cautious and focus on a continuation of its present monetary policy. The Bank of England could have had an impact on market expectations too: the Inflation Report emphasized that the interest rate hikes markets had been expecting would lead to inflation undershooting the target.
The Fed, however, did not take such a decisive stand as the Bank of England. The Fed's assessment of the economic situation was slightly more positive than before: the phrase “the pace of contraction is slowing” was replaced by “economic activity is levelling out”. But the Fed still underlined the weak points, particularly private consumption and corporate investment. The announcement that the $300bn Treasury securities purchasing programme was expected to be completed according to plan by the end of October caused some confusion. Some people saw it - to some extent in contrast to the Bank of England - as the beginning of an exit from quantitative easing. The market's reaction was only short-lived, however. This decision was in fact in line with expectations.
In the second half of the week, the dollar came under fresh pressure after surprisingly good second quarter growth figures for the euro area on the one hand, and somewhat disappointing US retail sales figures on the other. According to preliminary estimates, the decline in real GDP in the eurozone slowed down from -2.5% to -0.1% quarter-on-quarter. Compared with the previous year, the decline slowed from -4.9% to -4.6%. The biggest economies in the euro area, Germany and France, have returned to positive growth rates (0.3% respectively, quarter-on-quarter). In both countries, private consumption, public spending and net exports had a positive impact, whereas corporate investment continued to fall.
Then, however, the US retail sales figures dampened the upbeat mood: instead of picking up as expected because of the US cash-for-clunkers scheme, they posted an 0.1% decline in July compared with the previous month. The 2.4% increase in car sales was not enough to push the total figure into positive territory. Sales fell in most product groups, suggesting that new cars are perhaps being purchased instead of other goods.
The sales figures from the US were not good, but not abysmal either. The market's sharp reaction could indicate that market participants are well aware of the risks to the upswing scenario - the labour market and private consumption: an upswing without private households is practically inconceivable in the US. Markets will have to keep a close eye on consumption data such as consumer confidence.
On the US side, we think it likely that the slightly favourable trend in the macroeconomic data could continue for the time being. Next week will see the release of the first August figures for the manufacturing sector, which is benefiting at present from inventory re-stocking and the car scrappage scheme. The housing market is also likely to continue to stabilise. From this point of view, EUR-USD, presently at just under 1.43, could lose some ground again. In the light of surprisingly strong GDP in Q2 and on the general assumption that the ECB is likely to be more hawkish than the Fed, the euro should remain quite well supported, however. It will presumably remain within the trading range for the time being.

Algeria's forex reserves steady at $144.3 bln-cenbank

Algeria held $144.3 billion in foreign exchange reserves at the end of June this year, largely unchanged from six months earlier, the official APS news agency cited the central bank governor as saying on Sunday.
The last time Algeria's central bank revealed the size of its foreign exchange reserves was in December 2008, when it said they stood at $143.1 billion.

Algerian officials have repeatedly said the oil and gas producer is shielded from the turmoil on global financial markets because it has sharply reduced national debt and relies increasingly on its own revenues to fund development.
However, the fall in world energy prices has cut receipts from oil and gas sales, which account for 97 percent of Algeria's total exports.
The government last month banned domestic banks from issuing consumer loans in a drive to cut imports and boost the country's shrinking trade surplus.

U.S. Dollar Unusual Behaviour Despite Continuing Risk Taking Environment

From the middle of 2008 until February 2009, the dollar had been the safe haven vehicle. But in March, when risk appetite came back into the market, the safe haven trade began to slowly unwind. That means, since March, good news for the economy has meant bad news for the dollar.
You can see it in the chart below of the British pound vs. the U.S. dollar. The pound dropped sharply (U.S. dollar rose) on risk aversion as investors fled to the dollar. Now the pound is riding higher on a wave of surging risk appetite.

Within this risk environment, the relationship between financial markets and risk has been abundantly clear: When risk appetite is high … stocks, commodities, interest rates and all currencies (except for the U.S. dollar) rally. When fear creeps back in, the dollar benefits, the U.S. Treasury market benefits and almost everything else goes south.
So, when last week’s employment report showed a lower unemployment rate and fewer jobs lost, the dollar should have taken a hit. But it didn’t. Instead, it rallied!
Well, one day doesn’t make a trend.
And after the markets digested a cautiously positive statement by the Fed this week on the economy, the resulting activity in the currencies spoke clearly: For the moment, it’s still all about risk appetite.
I do, however, expect a shift in market focus to take place in the near term, to accommodate this growing sentiment of recovery. I think that global capital will begin shifting toward those economies that are relative outperformers. And for 2009 and 2010, consensus estimates have the U.S. outperforming other major developed market economies.

Last month, the IMF downgraded its forecast on the Eurozone, expecting the region’s economy to fall 4.8 percent in 2009. And for 2010, while all other economies are expected to grow, the Eurozone is expected to fall more.
Then Germany and France, the two largest economies in the Eurozone, shocked the market this week by posting actual growth for the second quarter!

On top of that, central banks are now upgrading economic forecasts for 2009, a year that was first thought to be a complete disaster. And the 2010 numbers are being boosted even more.
In fact, the European Central Bank has now revised its expectations for 2009 and 2010: Expecting just a slight contraction in 2009 and growth in 2010.
But in a period where less bad is the new good, and economies have stopped free-falling and are now showing signs of improvement, the recovery story is about sustainability, not just data points.

Dollar Stuck Near 2009 Lows Versus Most Majors

he dollar saw very little movement versus most majors on Tuesday, taking a breather after falling to its lowest levels of the year during the previous session.

Its been a brutal stretch for the dollar, which has given back a major portion of its post-economic meltdown gains. During the throes of the near-collapse of the financial system, the dollar rose to multi-year highs, but has since fallen under the weight of increased risk appetite.

With stocks rocketing higher, traders have been in hot pursuit of riskier, higher-yielding assets. Consequently, the dollar has fallen to levels not seen since 2008 versus all majors but the yen.

Traders on Tuesday weighed a pair of economic reports, but participants will be marking time until Friday's pivotal monthly jobs report. Pending home sales increased for the fifth consecutive month in June, according to industry data.

The dollar barely budged on either report, staying near yesterday's 8-month low of 1.4444 versus the euro. Meanwhile, the buck improved very slightly from a 10-month low of 1.7004 against the sterling.

With the price of oil stabilizing near $70, the dollar held its ground versus the loonie. After hitting a 10-month low of C$1.0630, the dollar hovered near C$1.0700.

The buck extended its run of choppy trading versus the yen, bouncing back and forth around 95.

In global economic news, the Eurostat said in a report that Eurozone industrial producer price index or PPI dropped 6.6% year-over-year in June, compared with a 5.9% fall in the previous month. The May month figure is revised from 5.8% decline reported initially. The PPI came in line with economists' expectations.

U.K.'s CIPS/Markit Construction Purchasing Managers' Index rose to 47 in July, a survey from the Chartered Institute of Purchasing & Supply and Markit Economics showed Tuesday. Economists were expecting the index to rise to 45 from 44.5 logged in June. However, the index stood below the neutral level.

CBI’s dollar sales drop on Wed.

BAGHDAD / Aswat al-Iraq: Demand for the dollar was lower in the Central Bank of Iraq (CBI) auction on Wednesday, reaching $132.780 million compared to $150.250 million during the previous session.
“The demand hit $15 million in cash, covered by the bank at an exchange rate of 1,183 Iraqi dinars, and $117.780 million in foreign transfers outside the country, covered at an exchange rate of 1,173 Iraqi dinars per dollar,” according to a CBI news bulletin received by Aswat al-Iraq news agency.
None of the 14 banks that participated in today’s session offered to sell dollars.
The Central Bank of Iraq runs a daily auction from Sunday to Thursday.

Metal prices rise slightly on dollar weakness

Most precious and industrial metals rose Wednesday, building on recent gains as the dollar extended its losses. Gold prices, however, finished slightly lower as investors collected some profits.

Prices were supported by the dollar's ongoing weakness; the greenback fell slightly against the euro and the British pound Wednesday.

Commodities are priced in U.S. dollars, so they become more attractive to foreign investors when the dollar is down.

Commodities traders seemed little fazed by the day's mix of economic data.

A reading indicating weakness in the services sector offset a report showing an unexpected increase in factory orders.

Metals and other commodities have been rallying over the past month, mirroring big gains in the stock market as improving economic data and earnings reports gave investors hope that demand for basic materials will pick up by the end of the year.

But analysts are anticipating that the market will cool off in the near future, and they say it may have gotten ahead of itself considering the economy's slow rate of recovery.

On the New York Mercantile Exchange, September silver rose 6.5 cents to $14.76 an ounce, while October platinum added $16.30 to $1,293.10 an ounce.

Over the past week, silver has risen 11.3 percent, while platinum is up 10.3 percent. September copper futures rose 1.65 cents to $2.8120 a pound.

Copper is up 13.5 percent since July 29. Gold for December delivery dipped $3.40 to $966.30 an ounce.

David Beahm, vice president of economic research at Blanchard & Co., a precious metals investment firm, said investors were likely taking some profits off the table in light of gold's recent advance.

Prices have risen nearly 4 percent in just five trading sessions.

Oil prices hovered near $72 a barrel, after dipping below $70 earlier Wednesday.

Prices have climbed from below $63 a barrel last week on the hopes that energy demand would soon rebound amid signs the economy was improving.

Some of the market's recent optimism was tempered Wednesday after the Energy Department said crude inventories rose by nearly 2 million barrels last week.

Light, sweet crude for September delivery rose 55 cents to settle at $71.97 a barrel on the Nymex.

Gasoline futures fell half a cent to settle at $2.0512 a gallon, while heating oil futures rose just more than half a cent to settle at $1.9569 a gallon.

Grain prices were mixed on the Chicago Board of Trade.

September wheat futures fell 13.5 cents to $5.5675 a bushel, and corn for September delivery fell 7.5 cents to $3.47 a bushel.

November soybeans rose 1.35 cents to $1.045 a bushel.

U.K. Halifax Prices Provide Positive Stimulus Ahead of European Open

U.K. July Halifax house price index rose 1.1% m/m, largely in line with the Nationwide reading for the same month (which was 1.3%) and with the 3m y/y rate now down 12.1%. This is the third monthly increase for the index this year and follows -0.5% m/m and -15.0% 3m y/y in June. Halifax data hence serve to highlight that the housing market might now be stabilizing, though low supply is distorting price comparison.
The USD and JPY are likely to retain their inverse correlation to stock market performance and the associated ebb and flow of risk appetite. Currently we have more ebb than flow as equity markets pause after recent impressive gains, fueled by an overall better-than-expected Q2 corporate earnings season and encouraging global economic data. Concerns about a correction in China's market resurfaced today, with banking stocks pressured amid a view that Beijing may tighten capital holding requirements, while potential for further upside corporate earnings announcements and guidance is reducing simply due to the fact that the majority of companies have now reported. So, the tone for European morning trade will likely be supportive for the USD and JPY and negative for higher beta type currencies. There is some potential for a sharper recovery in the U.S. and Japanese currencies given the extent of net short positions held by the market, though we may need some sort of catalyst (i.e. negative news of data event) to spark a short-covering squeeze. A busy data calendar looms today.

South Korean Won Falls To 2-day Low Against US Dollar

During early deals on Wednesday, the South Korean won declined to a 2-day low against the US dollar as a fall in Asian stock prices reduced the appeal of the nation's assets. The won also showed weakness against the Japanese yen.

Asian markets retreated today as Japanese automakers fell on Toyota's big loss and investors waited for a U.S. employment report to shed light on how quickly the world's biggest economy can recover.

The Korean benchmark KOSPI closed at 1,559.47, down 6.90 points or 0.44% from its previous close.

The South Korean won declined to a 2-day low of 1226.60 against the US dollar at 2:55 am ET Wednesday. The next downside target level for the South Korean currency is seen around 1236.0. The dollar-won pair closed Tuesday's North American session at 1218.30.

FOREX - AUSTRALIAN DOLLAR CLOSES HIGHER

The Australian dollar has finished the local session at a 10-month high after better than expected economic data in the US lifted hopes for the global economy and boosted commodities-driven currencies such as the domestic unit.
At 1700 AEST, the local currency was trading at 83.58 US cents, up 0.95 per cent from Friday's close of 82.79 US cents.

FOREX - RUPIAH SURGES AGAINST US DOLLAR

The rupiah surged against the US dollar on the Jakarta interbank spot market here early Monday as investors continued to buy the local unit.

The Indonesian currency traded at Rp9,890-Rp9,900 per US dollar, up 30 points from Rp9,920-Rp9,935 at the market`s close over last weekend.

The rupiah gained because investors were still optimistic about the Indonesian market, bolstering foreign investment in the domestic market, Edwin Sinaga, a domestic money market observer, said here on Monday morning.

Forex trading challenge to start in August

Varengold Bank is offering traders a second chance to put their FX trading skills to use by virtual trading to win $250,000 AUM. “This is a great opportunity for both beginners and sophisticated forex traders, to join in and put their trading skills to the test,” said Ilja Perschbacher, Managing Director of Varengold Bank Dubai.

Participants are being invited to sign up for a virtual play money account and begin trading over a period of three months, from the 1 August 2009 to 31 October 2009. The challengers will be assessed on the highest risk-adjusted interest yield during the three month duration.

The winner of the challenge will be awarded with their own managed account ready for trade, Seed capital amounting to $250,000 AUM and bank-based sales support to acquire additional funding.

Forex Exchange Morning Report 5-8-2009

Forex Exchange Morning Report
Risk currencies maintained their firm tone last night thanks to supportive, but mixed, US data. The ADP payroll report produced a small negative surprise, denting equity investor sentiment and the S&P500 at the open, but the later factory orders report easily beat consensus, helping revive risk into the NY close. The S&P500 closed down 0.3%, but noteworthy is the +4.4% performance of the banks' index. Oil was little changed, but copper ground 1.1% higher. US treasuries bounced around with the data, the 10yr note 8bp higher on the day.
EUR ranged wildly between 1.4355 and 1.4445, a disappointing retails sales report hurting, but has rebounded to the upper bound. A raft of strong UK data pushed GBP higher to 1.7043. JPY remained around its recent 95 consolidation zone. We note retail margin traders aggressively cutting JPY shorts. Moody's reaffirmation of Mexico's Baa1 rating boosted the peso 1.3%.
AUD bounced around with the data, seeing overnight extremes of 0.8450 and 0.8360, but is about where it closed in Sydney yesterday at 0.8405.
NZD was relatively stable, perhaps supported by residual sentiment from the earlier milk powder price rise, and remains around 0.6730. That milk result kept the pressure on AUD/NZD overnight, reaching a low of 1.2443.
US ISM non-manufacturing slipped from 47.0 to 46.4 in July. This reflected a near 4 pt drop in the business activity index, a 2 pt drop in jobs and a smaller drop in orders, with offset from inventories and supplier deliveries. Not a surprising outcome to us, as the June jump had looked excessive; the uptrend in this survey is still intact.
US ADP private payrolls down 371k in July. This compared to a 463k fall in June, which suggests that Friday's payrolls report will also show a smaller pace of job loss. However, ADP is not a reliable guide to payrolls, even if, as in June, it seems to get it about right; we expect total payrolls to show an even starker improvement (WBC forecast -270k), given statistical distortions related to auto sector hiring.
US factory orders rise 0.4% in June. A 2.7% jump in non-durables (mostly due to energy prices) offset the known 2.2% drop in the durables component. Factory inventories fell 0.8%.
Euroland retail sales fell 0.2% in June, their sixth decline in seven months, and pointing to a likely further contraction in Q2 household spending.
UK industrial production jumped 0.5% in June, the strongest monthly gain since October 2007, and one of only four monthly gains since then. This result adds weight to the view that the UK economy may have bottomed out sometime in the second quarter.
UK surveys point to improving economy. The Nationwide's July consumer confidence index rose from 59 to 60; the Halifax reported a 1.1% jump house prices last month; and the British Retail Consortium saw only modest further discounting in July, with shop price growth easing from 0.7% yr to 0.5% yr. Most impressive was the rise from 51.6 to 53.2 in the services PMI, pointing to accelerating growth in that sector.
Outlook Today's highlight should be the double billing employment reports from New Zealand and Australia. In New Zealand, a number higher than 5.7% may be dismissed as old data (it would also need to be worse than the RBNZ's 5.9% forecast to have monetary policy implications), but something lower would likely elicit a bullish response in the NZD. We favour the kiwi higher in sessions ahead, to around 0.6900 initially, with temporary corrections limited to 0.6650.
Events Today
Country Release Last Forecast NZ Q2 HLFS Employment –1.1% –0.4% Q2 HLFS Unemployment 5.00% 5.70% Aus Jul Employment chg –21.4k –20k Jul Unemployment Rate 5.80% 6.00% US Initial Jobless Claims w/e 1/8 584k 590k Jul Chain Store Sales %yr –5.1% – Jpn Jun Leading Index 76.9 79.7 Eur ECB Rate Decision 1.00% 1.00% Ger Jun Factory Orders 4.40% –2.2% UK BoE Rate Decision 0.50% 0.50% Can Jun Building Permits 14.80% –3.2% Westpac Institutional Bank
http://www.wib.westpac.co.nz/
All customers please note that this information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs. Australian customers can obtain Westpac's financial services guide by calling +612 9284 8372, visiting www.westpac.com.au or visiting any Westpac Branch. The information may contain material provided directly by third parties, and while such material is published with permission, Westpac accepts no responsibility for the accuracy or completeness of any such material. Except where contrary to law, Westpac intends by this notice to exclude liability for the information. The information is subject to change without notice and Westpac is under no obligation to update the information or correct any inaccuracy which may become apparent at a later date. Westpac Banking Corporation is regulated for the conduct of investment business in the United Kingdom by the Financial Services Authority. © 2004 Westpac Banking Corporation. Past performance is not a reliable indicator of future performance. The forecasts given in this document are predictive in character. Whilst every effort has been taken to ensure that the assumptions on which the forecasts are based are reasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks and uncertainties. The ultimate outcomes may differ substantially from these forecasts.

Gold above $950/oz, weak dollar lifts hard assets

LONDON (Reuters) - Gold held above $950 an ounce in Europe on Monday, underpinned by weakness in the dollar, but fresh gains were capped by a dearth of demand for physical stocks of the metal from jewellers and exchange-traded funds.

Silver prices climbed to five-week peak, however, as the largest silver-backed ETF reported a 61-tonne rise in its holdings of the metal to a new record high.

Spot gold was bid at $954.10 an ounce at 4:29 a.m. EDT, against $953.90 an ounce late in New York on Friday. Silver was at $14.16 an ounce against $13.89, having earlier touched a high of $14.19.

"Though dollar weakness and recovery in risk appetite could push (gold) higher, its failure so far to break above a key resistance point suggests prices have limited upside scope," said Pradeep Unni, senior analyst at Richcomm Global Services.

"Lackluster investment demand and the low physical demand are adding to the concerns that the summer rally may fail to hold on to the gains," he added.

Holdings of the largest gold-backed ETF, New York's SPDR Gold Trust, were unchanged for a second straight session on Friday, having fallen nearly 50 tonnes in July.

London's ETF Securities meanwhile said holdings of its three gold-backed exchange traded commodities (ETCs) fell 1.2 percent last week. ETFs, including ETCs, issue securities backed by physical commodities, and their buying was a big source of gold demand in the first quarter.

Jewelry demand was also lackluster as Indian consumption weakened on the back of higher prices. "Traders are waiting for lower prices," said one dealer.

But weakness in the dollar, which is boosting demand for hard assets such as bullion as well as making it cheaper for holders of other currencies, is firmly underpinning gold prices.

The U.S. currency hovered near its lowest point this year against a basket of currencies as higher oil prices, rising global stock markets and positive U.S. economic data diverted investment into currencies seen as riskier.

STOCKS CLIMB

World stocks climbed to a new 2009 high on Monday after signs of a pick-up in Chinese economic activity lifted Asian shares. European shares also rose after a volatile start to the day.

Rising equity markets and optimism over Chinese demand for hard assets boosted interest in oil, with prices rising to a one-month high. Stronger crude prices generally support interest in gold as a hedge against oil-led inflation.

Oil and the dollar also fueled gains in silver prices, but the metal took further support from a fresh inflow into the largest silver-backed ETF, New York's iShares Silver Trust.
Its holdings rose more than 60 tonnes to a record 8,828 tonnes on Friday

"We expect silver to continue broadly tracking gold and the dollar in the coming sessions, with scaled-up resistance expected around $14.40/14.65," said TheBullionDesk.com analyst James Moore.

Platinum was at $1,211.50 an ounce against $1,207.50, while palladium was at $261 against $261.50. Platinum group metals traders are awaiting U.S. car sales data due later in the session for direction.

As both platinum and palladium are chiefly used in autocatalysts, prices have suffered from a downturn in car demand in the last year.

Advantages and Disadvantages of Forex

As you know, FX is one of the greater potential markets that obtains large yields for your investments in the world.
There are two options or forms which you can access to invest in the currency market and take advantage the opportunity that offer you:
-Operating directly in the Forex Market
-Investing in through of a Broker
Between the advantages and disadvantages that could see in these two methods of investment emphasize:
a) Operate directly in the FX Market
Advantages
- You have a unlimited potential of income, depending to your ability.
- Possibility of manage personally your capital
- You can open a “mini” account directly with the Broker, from $ 300.
Disadvantages
There is great possibility of Losses of Capital if you don' have knowledge and experience.
- Maybe you require to study Specialized Courses to operate into Forex.
- You require much time to study and analyze the market.
- Maybe you can lose capital before obtain the experience need to operate successfully
b) Operate through a Broker
Advantages
- Don't require specialized knowledge nor experience
- You can start with minimum capital, even less than $ 100
- Your capital is managed by professional traders with experience, which you possibility of loss is lowest.
- There are enterprises that manage the multilevel system and your incomes are can multiply.
- Don't have account directly with the Broker, only you place the capital to the enterprise
- there were many frauds with Brokers of FX, which most people have bad image of them.
- The enterprise cannot guarantee to you gains or yields.