Forex rebates on every trade - win or lose!

Don't know if this has been mentioned elsewhere but there's an EWI Freeweek for Forex this week, including intraday:

www.elliottwave.com

NEW YORK (Dow Jones)--Global central banks that kept huge amounts of U.S. dollars as foreign currency reserves throughout the long years of decline will be even more loyal to the greenback now that it's making a comeback, right?

Wrong.

If the dollar is indeed on track for a multi-year uptrend, central banks are likely to slowly cut back on their dollar holdings. And with trillions of dollars sitting in foreign central bank coffers, analysts say that even a moderate reduction in reserves could put the brakes on any major surge by the U.S. currency. That means a long-term upswing in the dollar might be just as slow and steady as most of its downtrend was.

"The surge in central banks' foreign reserves (most of which are held in dollars) has been the flip side of the weak dollar over the past six years," said Chris Turner, currency strategist at ING in London. "If the dollar has begun a multi-year recovery...we could conceivably see a modest drawdown in reserves."

During the dollar's roughly six-year decline, global central banks increased their total foreign reserves from around $2 trillion to nearly $7 trillion, according to data from the International Monetary Fund. The dollar's share of these funds has actually increased, accounting for about 63% in the first quarter of 2008, up from about 55% in late 2001.

But that buildup in reserves may now change, as the dollar appears to have found a floor last month, when the euro hit an all-time high of $1.6040. The dollar has since risen about 10%, with the euro falling to as low as $1.4570 Tuesday.


Rainy Days Are Coming

The dollar reserves accumulated by central banks abroad aren't part of an return-seeking investment strategy. Nor are they necessarily intended as a security blanket, to be used in the event of a crisis. Experts say the massive amounts held by many central banks - about $1.8 trillion in China, $300 billion in India, $200 billion in Brazil - far surpass the amount deemed necessary to fend off financial market shocks.

Instead, many central banks, including those in the Middle East, China and Brazil, have been stacking up their greenbacks to counteract the dollar's weakness. Buying, or removing U.S. dollars from their local economies, has been an exercise in keeping their own currencies relatively weak, which boosts the economy by helping exports. Now, as the dollar starts to look up, there's less need for such central bank intervention.

Also, as commodity prices come down and a global economic slowdown begins to take hold, local governments may want to use at least some of the reserves to pay for public works projects and other job-creating ventures.

The central banks may "now have an opportunity to do something with the reserves," Turner noted.

Some countries are already being forced to part ways with their reserves as their currency feels the early effects of a stronger U.S. dollar.

South Korea's won is trading at a four-year low against the dollar as foreign investors ditch their won bets on worries over a global credit crisis and a slowing economy. The government has been selling dollars to support the won, shrinking its foreign-exchange reserves to the lowest mark in 15 months in July.

Meanwhile, the stronger dollar could also allow the U.S. government to renew pressure on China to allow its tightly-managed currency, the yuan, to appreciate, making U.S. exports to China more competitive. While the dollar was at record lows against the euro and multi-year lows against a host of other currencies, it was rather difficult for the U.S. to complain about China's weak currency.

A stronger yuan would probably have to come by way of less dollar purchases by China, which could stem, if not reduce, the buildup of foreign reserves by the People's Bank of China.

"The heavy purchases of dollars will have to stop at some point," said Robert Scott, global trade economist at the Economic Policy Institute, who said it might require "the mere threat of trade sanctions."

The PBOC doesn't disclose the composition of its reserves but Barclays Capital estimates around 65% are now denominated in dollars, mostly invested in U.S. Treasury bills.

Could anybody tell me the time of day for maximum volatility for the major currency pairs, or where I can find it for myself.

Much of what you need to know is in this thread header, Plateman.

Hil has gone to a lot of trouble over time - you'll have to study it.

The Three Musketeers look to be reunited again.

I didnt know about them first time around, where are they now Hils

Choc, can't see anywhere in my header that Hil has posted this information, all I have is a M5 GBP/USD chart and a calendar, should I have someting else?

Plateman - Things are usually (but not always) quiet during the overnight session although JPY AUD and NZD can be big movers between midnight and 2am due to news.

Currencies start to move as the Middle East and Europe get online around 6 to 7am.

Often the best moves can be experienced when London opens around 8am and volume really kicks in. There are many strategies based upon the London open. You can often find reversal of an overnight or European open move.

The greatest actual volatility is to be found around news events which are mostly scheduled. In the header you will see some items such as the German CPI this morning shown as 'HIGH'.

9:30 am is a good time for GB news to be announced. 13:30 and 15:00 are popular times for US news.

There is a big difference between playing the London open and attempting to trade a news event. If you expect your trade to be instantly processed during a major news event you may be very disappointed and very much out of pocket !

Welcome to the throng, Plateman.
All I can add at this point, I assume as a newcomer to Forex, is that you really don't want to be trading volatility.



And this just takes the biscuit!

LONDON (Dow Jones)--U.K. consumer confidence improved in August from a record low the previous month, but the slight recovery was due to short-term effects and shouldn't be seen as a turnaround in sentiment, market research firm GfK NOP said Friday.

The company's headline measure of consumer confidence rose to -36 from -39 in July, the first increase since January but still 32 points lower than August last year.

Market participants were expecting another deterioration to a fresh low of -41, according to a Dow Jones Newswires survey of economists last week.

"This improvement could be down to a number of recent factors, which are mostly of short-term influence, such as cheaper petrol offers, summer holidays happening or just a general feeling of things can't get any worse can they?" Rachael Joy, a research analyst on GfK NOP's consumer confidence team, said in a statement.

"In particular, winning gold medals in the Olympics seems to have had a lifting effect," she said.

The survey of 2,001 people, which was carried out on behalf of the European Commission Aug. 8-17, found the climate for major purchases deteriorated to a fresh record low.

But consumers' perception of the general economic situation over the last 12 months was stable, albeit at a low level of -69.

Consumers were also less pessimistic about their personal financial situation over the last 12 months and next 12 months and about the economy over the next 12 months.

The index measuring whether it was now a good time to save rose one point to +21.

Despite the slight improvement, the results of the survey support the view that the Bank of England's next interest-rate move will be downward, even though inflation is at its highest level for 16 years.

"We have seen a small improvement in consumer confidence in August, but this should not be seen as a turnaround in core sentiment," Joy said.

GfK NOP's headline measure of consumer confidence has fallen from -4 last August, when a meltdown in the U.S. subprime mortgage market triggered a credit crisis which has roiled financial markets and institutions and weighed on growth in many of the world's biggest economies. U.K. economic growth stalled in the second quarter.

Last month the measure hit its lowest point since the survey was launched in 1974 due to the ongoing toxic combination of falling housing prices, rising living costs and higher utility bills.

GfK NOP said a separate survey of 1,000 adults carried out August 22-24 found U.K. consumers were continuing to find ways to save money. More than one-third were buying supermarkets' own brands rather than branded goods, cutting back holiday travel plans, and going out less to pubs and restaurants.

Quento, many thanks for that very helpful answer, I've stopped trying to guess what the markets are going to do on news, now I just look at the indicators although I'll be watching open positions very carefully at newstimes.
Choc, perhaps I chose the wrong words, as a "newcomer" I certainly won't be trying to trade wildly volatile situations, perhaps I should have said "steady trends".

Wish you the best of beginners' luck, Plateman :)


$ may get whipped next week by storm Gustav

NEW YORK (Dow Jones)--The dollar's month-long track toward recovery could be put to the test next week, first by Tropical Storm Gustav, and at the end of the week by the key U.S. jobs report.
But investors will also keep their eye on euro-zone data on growth, retail sales and manufacturing, and more signs of economic weakness in the euro zone and may provide offsetting support for the dollar. Also on tap next week are rate-setting meetings by the European Central Bank and the Bank of England.
For the first part of the Labor Day-shortened week, Gustav will certainly grab most of the headlines in currency markets, especially if it is bumped up to hurricane status.
If Gustav, like Hurricane Katrina three years ago, were to cause an extended shut-down of offshore oil platforms and refining facilities in the Gulf of Mexico, this could send crude futures prices soaring. Given recent trends, this would send the dollar lower.
Jitters over the approaching storm have thus far had little impact on the dollar, but with the rain and winds expected to hit U.S. coastal waters Monday or Tuesday, ABN Amro currency strategist Dustin Reid said "next week will be the key test."
He added: "The risk, of course, is that oil supplies decrease, sending spot and futures prices higher with a negative net impact for the dollar throughout the week."
Still, there's a feeling among traders that the extremely tight relationship between oil prices and the dollar during the past few weeks may have been a temporary phenomenon for August due to thin market conditions as many investors were away on vacation.
"There's a chance that we shift back (next week) to trade on a wider breadth than just the price of oil," said Tom Fitzpatrick, global head of currency strategy at Citigroup in New York. "As we get into September, I think (investors) may take a step back and decide what they believe for the dollar on big-picture basis."
With this as a backdrop, analysts said the euro is likely to trade next week in a range between $1.45 and $1.49, while the dollar against the yen is likely to move between Y107.50 and Y110.75.
Friday midday in New York, the euro was at $1.4717 from $1.4688 late Thursday, while the dollar was at Y108.54 from Y109.64. The euro was at Y159.77 from Y161.08, according to EBS. The U.K. pound was at $1.8248 from $1.8292, and the dollar was at CHF1.0989 from CHF1.1003 late Thursday.
The U.S. data week starts with a nationwide manufacturing report for August due Tuesday. That will be followed by some second-tier reports Wednesday and Thursday on the services sector. All of this leads up to Friday's pivotal report on U.S. nonfarm payrolls, which isn't expected to provide any of the positive surprises seen this past week.
The dollar may also run into some trouble when the European Central Bank meets Thursday to make a decision on interest rates.
Economists are forecasting the ECB will leave rates alone at 4.25%, but in a press conference after the decision, ECB President Jean-Claude Trichet may further depress hopes that the bank is considering rate cuts.
Several ECB officials this week have suggested that talk of rate cuts to help the economy is premature, and Trichet's backing of this sentiment would likely benefit the euro.
Regarding the yen, analysts say its weeks-long trend of choppy, range-bound trading could remain intact next week, though downside risks to the dollar may slightly outweigh the upside. They say Japanese investors may begin to repatriate funds invested overseas amid further signs of a slowdown in the global economy.

-By Dan Molinski, Dow Jones Newswires; 201-938-2245; dan.molinski@dowjones.com

Thanks Choccie, away on Monday, I'll be giving it a go Tuesday onwards.

Well, tried my luck today, 11 trades, all on EUR USD, +23, +30, -15, -25, -9, +13, -2, 0, -12, -4, and +9 for a net +8.

+ 8 is better than -8. Well done.

1.4510 exotic option expires tomorrow
September 3, 2008

Should EUR/USD backup toward 1.4510, there may be some selling related to a digital option which expires at that level at 10 am tomorrow morning. The owner of the option wants spot to trade below 1.4510 at expiry (and will recieve a $5 mln payout if it does, while the writer of the option will try and push the market higher (if it is close) to avoid the big payoutEUR/USD trades now near 1.4465 after rallying toward 1.4490 after stops were tripped above 1.4470.

does anyone actually trade on odl?

Sources report talk that two names have been good buyers of cable this morning (HSBC possibly China related and Goldmans possibly tied to Quatars possible purchase of Sainsburys.)

NEW YORK (Dow Jones)--The euro struck a 12-month low Wednesday against the dollar, despite another sign of distress in U.S. financial markets.

The move is the latest indication of a total market repositioning, as the dollar reverses losses against previously high-flying rivals and traders prepare for quarter end in a risk-averse environment.

The upshot is a more resilient buck in the face of disconcerting U.S. news, as it benefits from safe-haven flows and concern about the euro-zone economy.

One-month volatility for the euro versus dollar is at its highest levels since September 2001, say traders.

"From November 2000 to December 2001, we saw 10% to 15% swings in the euro versus dollar, which is similar to what we are seeing now," said Kathy Lien, director of currency research at Global Forex Trading in New York.

During that period, the euro was at its historically weakest levels against the dollar since the introduction of the single currency at the beginning of 1999.


The Theory Of Relativity

Troubled U.S. bank Lehman Brothers (LEH) released worse-than-expected preliminary third-quarter earnings early Wednesday. While many have compared the bank's situation to the events leading up to the collapse of Bear Stearns, it's unlikely that the euro will again be catapulted to another record high. The last euro record was struck July 15 at $1.6040.

To be sure, the greenback experienced a slight sell-off on the Lehman report, but short-term trades do not a trend forsake.

"We'd expect the dollar to sell off far more on this type of negative news," said Michael Woolfolk, senior currency strategist at Bank of New York Mellon.

"What this means is the turmoil we're currently seeing in U.S. financials is pushing investors to the sidelines and many international investors to the dollar," as a safe-haven asset, he said.

The dollar's revival is occurring across the board, versus the U.K. pound, commodity-linked currencies and emerging markets. It was stoked over the last few weeks as economic forecasts and remarks from leaders affirmed what the market has long been guessing. The U.S. crisis over the last year is leading to a global slowdown and possible recession in the euro zone.

The European Union Wednesday slashed its economic growth forecast for 2008, one week after the European Central Bank did the same. The E.U. said several major European economies will slip into recession, including Germany, the U.K. and Spain. Overnight, Luxembourg Finance Minister and Prime Minister Jean-Claude Juncker also said there was a risk for "technical recession" in the euro zone.

With oil prices remaining soft Wednesday, traders are finding little reason to hold onto the euro - and other investors are paying attention.

"A lot of people that haven't been involved in foreign exchange may be looking at this move and asking themselves if this is the big turn. 'Are we positioned for that?'... That's exacerbating the degree of dollar strength," said Adam Boyton, currency strategist at Deutsche Bank in New York.

As it is often said on Wall Street: "The trend is your friend."

Some retail traders and hedge funds had bet that higher-yielding currencies such as the euro, U.K. pound and Australian dollar would correct higher from recent declines. However, these speculative investors began aggressively bailing on their dollar-bearish holdings last week. Besides the U.S. currencies, traders are also buying back the less risky, lower-yielding yen.

Late Tuesday, the Australian dollar dipped below the psychologically significant level of $0.80. Elsewhere, the Indian rupee Wednesday slumped to a near two-year low and the Brazilian real has tumbled nearly 10% so far in September.

With the dollar at these elevated levels, Kathy Lien of GFT said its ascent will probably begin to slow.

Nevertheless, the market will likely keep testing the euro level of $1.4000, a break of which could tailspin into a short-lived fall to $1.3900, she said.

Wednesday afternoon in New York, the euro was at $1.4059, down from $1.4104 late Tuesday. The dollar was at Y107.75, up from Y107.15, according to EBS. The euro was at Y151.45, up from Y151.08. The U.K. pound was at $1.7581, down from $1.7586, and the dollar was at CHF1.1339, up from CHF1.1294.


(Riva Froymovich reports on the foreign exchange market for Dow Jones Newswires in New York. The writer can be reached at 201-938-5063 or by e-mail: riva.froymovich@dowjones.com)

NEW YORK (Dow Jones)--The dollar fell against the euro Friday by the most since it began a strong rally two months ago, as a weak U.S. retail sales report reignited fears the Federal Reserve may have to cut interest rates again.

Retail sales fell 0.3% in August, the second consecutive monthly decline, and below economists' expectations for a 0.2% increase. Sales were brought down by falling gasoline prices and the sluggish spending of timid consumers.

Also leading the dollar lower Friday was rampant speculation that U.S. investment bank Lehman Brothers (LEH) might find a suitor this weekend that would allow it to stay in business. Shares in the company, which has been hurt by the housing crisis and credit crunch, have been getting pummeled in recent days, and that helped the dollar as worried U.S. investors dumped riskier assets overseas and repatriated into greenbacks.

The euro climbed to as high as $1.4223 Friday afternoon, well above its one-year low of $1.3882 reached Thursday. Still, the dollar remains much stronger from July 15, when the euro hit a record high of $1.6040.

"The first leg of the dollar's recovery appears to be ending," said Marc Chandler, global head of foreign exchange at Brown Brothers Harriman. "The dollar's rally appears vulnerable to a shift in the pendulum of market expectations about Fed policy."

Late afternoon Friday in New York, the euro was at $1.4219 from $1.3942 late Thursday. The dollar was at Y107.82 from Y106.88, according to EBS. The euro was at Y153.30 from Y149.15. The U.K. pound was at $1.7951 from $1.7517, and the dollar was at 1.1311 Swiss francs from CHF1.1408.

In recent days, markets had all but written off the odds of any more 2008 interest-rate cuts by the Fed, on the assumption that the current benchmark rate of 2% was likely low enough to stimulate borrowing and feed a slow economic recovery.

But U.S. stock markets have struggled this week amid worries over the credit crunch, which is keeping borrowing costs high despite the Fed's rather low benchmark rate.

Rate futures contracts are pricing in firm expectations that the Fed could cut its key rate to 1.75% before year's end and perhaps as early as the Fed's October meeting. The Fed also meets Tuesday, but economists agree that the bank is unlikely to tinker with rates at that meeting.

Surprisingly, the dollar's declines Friday came on a day in which crude-oil prices fell under $100 a barrel for the first time since April. In recent months, the dollar has been supported by lower oil prices, which are seen as helping the U.S. economy recover faster.

As the dollar fell Friday, some of the currencies that have been suffering the most in recent weeks by the greenback's rally rebounded impressively.

The U.K. pound on Thursday had hit a two-and-a-half year low of $1.7449, but rose more than a nickel Friday, hitting an intraday high of $1.7953.

The hopes for a resolution to Lehman's problems also helped boost overall risk appetite, which drove the low-yielding Japanese yen lower as investors began betting again on higher-yielding currencies.

The Australian dollar, for example, jumped to $0.8220, up from $0.8045 late Thursday in New York. The Brazilian real and the Colombian peso also managed to recover from some of their steep losses in recent days.


-By Dan Molinski, Dow Jones Newswires

NEW YORK (Dow Jones)--The massive market repositioning that sent safe-haven flows to the dollar has been exhausted, leaving the buck vulnerable next week to losses against the euro after a month of remarkable advances.

The U.S. currency's gains to a one-year plateau from a lifetime low less than two months earlier are likely to begin subsiding. The U.S. economy hasn't yet reached a bottom and dollar support from the liquidation of riskier positions is diminishing.

"(The) liquidation process is expected to have run its course and more fundamentally-driven levels for major currencies are likely to develop," said Robert Sinche, head of global currency strategy at Bank of America in New York.

"That environment appears likely to support the euro, particularly versus the dollar and U.K. pound," he said.

What will remain a constant in the weeks ahead is volatility, say analysts, as developments unfold in the government's most sweeping foray into financial markets since the 1930s. Currencies changed course rapidly and many times a day this week, although generally remaining in well-established ranges. Thin market conditions most likely exaggerated some of the intraday movements, said analysts.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are scheduled to testify on Capitol Hill at the start of the week, which could provide fuel for further hectic trading.

Next week, the euro is seen trading between $1.42 and $1.47. The dollar is expected to gain support against the yen from the government package and trade between Y106 and Y109.

Friday afternoon in New York, the euro was at $1.4421 from $1.4348 late Thursday. The dollar was at Y107.14 from Y105.40, according to EBS. The euro was at Y154.55 from Y151.31. The U.K. pound was at $1.8369 from $1.8201, and the dollar was at CHF1.1084 from CHF1.1041 Thursday.

Traders previously put greater faith in the dollar versus the euro on forecasts that the U.S. would bounce back to economic growth before the rest of the world as the U.S.-bred financial crisis extended to Europe. But after a chaotic week of bank closures, buy-outs, dramatic stock losses and a major money market intervention, the U.S. economy is now seen as further from the finish line than expected.

The dollar will suffer on the new Treasury Department and Federal Reserve actions, which indirectly encourage investors to ditch the dollar for riskier, higher-yielding assets on improved risk appetite, according to analysts.

Then, when U.S. financial markets turn dour after the good news wears off - and it is just a matter of time before it does, say analysts - investors will be unwilling to return to the greenback.

"The euro is caught at the moment between the dollar being a safe haven or not," said Bilal Hafeez, head of foreign exchange strategy at Deutsche Bank in London.

The change in market flows recently seem to point to the latter.

"(The) greenback remains on the defensive as the U.S.-centric credit and liquidity crisis appears to have caught up with it. Not surprisingly...indicators show strong net buying of most other G-10 currencies," said Samarjit Shankar, director of global strategy at The Bank of New York Mellon in Boston.

At the same time, the recovery in crude oil prices is providing additional support for the euro, as well as for the Canadian dollar and Norwegian krona. The surge in gold is also aiding the Australian dollar and euro, Shankar added.

The expected dollar weakness on disconcerting market news is also due to rising calls for another cut to the fed funds target rate - avoided by the Federal Open Markets Committee this past week in spite of the bankruptcy declaration by Lehman Brothers. Lower rates make the buck less attractive than higher-yielding rivals, particularly if recession becomes a reality. The American Bankers Association's committee of chief economists at major banks said this week that many members believe the chances for a U.S. recession have grown in just a matter of weeks.

Still, euro gains will likely be limited in the near term, say analysts. Euro-zone data expected next week on the manufacturing sector and a German business climate survey will likely be negative, pointing to impending recession there as well.