Forex rebates on every trade - win or lose!

I don't :-)

Oh you're both soo sweet ;)


NEW YORK (Dow Jones)--As the U.S. Congress hunkers down to decide on the government's $700 billion bailout proposal for the banking sector, dollar bears are getting ready to strike.

Expectations are high that lawmakers will quickly approve the plan, perhaps before the weekend and probably with only a few minor adjustments - maybe by adding vague wording that discourages excessive salaries for executives.

Stock markets could certainly surge on the news of Congressional approval, but the dollar is unlikely to respond in kind, and might even take a sharp turn lower.

Currency investors are likely to focus on the grim reality of the bailout, which pinpoints with GPS accuracy just how distressed the U.S. financial system is and how vulnerable the dollar could become. Approval likely would mean the U.S. government will have to issue vast amounts of Treasurys, which would lead to concerns that inflation will rise.

We're not talking about the modest type of inflation seen in normal times, which leads the Federal Reserve to lift interest rates and helps the dollar by boosting yields. Rather, the worries are that prices could soar, sharply cutting the dollar's purchasing-power, making the currency unappealing for both Americans and foreigners.

This spike in inflation could hit just as the economy stalls. The Fed wouldn't lift rates in such an environment, and the situation could deteriorate fast into stagflation as ugly as that seen in the 1970s.

Fed Chairman Ben Bernanke, perhaps offering himself an out if such a scenario does develop, told lawmakers on Wednesday that while inflation should moderate, there are "significant" risks to that outlook.

Enactment of the bailout plan, said Kathy Lien, director of currency research at GFT Forex, "would cause a destruction of the U.S. balance sheet by increasing the nation's debt ceiling by 6.6% to $11.315 trillion."

The dollar has already taken a hit on the initial shock of what the bailout plan means. The euro, which was trading at $1.43 against the dollar a week ago, was 3 U.S. cents higher at $1.46 Thursday. With the expected approval of the plan, analysts say the euro could easily begin to creep up toward $1.55, though most doubt the single currency would re-test its lifetime high of $1.60 reached in July.

Of course, there's the off chance that lawmakers reject the bailout, or delay its passage for an extended period. This would no doubt cause risk aversion to spike, leading investors to dump their higher-yielding bets in emerging markets. The dollar could benefit, as many overseas investments are paid for in dollars.

The dollar has recently been benefiting from risk aversion and times of inter-bank funding stress.

But even if the dollar did catch some risk aversion tailwinds, its gains would probably be short-lived. Investors, digesting the gravity of the failure of a plan to resolve the U.S. banking mess, would start to re-think their long-held belief that the U.S. currency is a safe haven in turbulent times.

"There's a big problem, and the [bailout plan] is a reflection of that," said Daniel Katzive, currency strategist at Credit Suisse in New York. "Both scenarios [lawmakers' approval or rejection] still point to a weaker dollar."

Sure, the plan is an important step in direction of solving the U.S. financial debacle, and helping the economy start to get back on its feet.

"But perhaps a weaker dollar is one of the side-effects of the problem, and a weaker dollar may even be a necessary part of solving the problem," Katzive said.


Other Currencies Weak, Too, No?

Of course, dollar bulls will argue the problems facing the U.S. financial system and overall economy are quickly spreading to the rest of the world, making currencies such as the euro and the yen just as unappealing, if not more, than the dollar.

True enough, the financial sectors in other countries and other regions of the world haven't been spared, and their economies are struggling alongside the U.S. But GFT's Lien argues the rest of the world's financial systems are not being completely upended like they are in the U.S., where centuries-old banks have crumbled.

Other countries "aren't facing same system risk that U.S. banks are," she said.

Lien argues that liquidity, or a lack of funding is not the main issue facing the U.S. financial system, and points out that hedge funds still have a bunch of cash.

"Cash is not the rare commodity here, it's the lack of a willingness to lend," she said, adding that this is not so large of a problem elsewhere, and will therefore allow other currencies to retain an edge over the dollar.

me2 chocy.....do miss your arty charts aswell!

I read all your posts, Choccie (said he, just hoping to be called sweet).

Well you are serweeet ;)


(From THE WALL STREET JOURNAL ASIA)
By Bob Davis
WASHINGTON -- The success of the pending rescue of the U.S. financial system probably depends as much on the central banks of China and the Middle East as on the U.S. Congress and Federal Reserve.

The U.S. is turning to foreign governments and other overseas investors to buy a good chunk of the as much as $700 billion in Treasury debt that would be sold to finance the bailout. Foreign investors are also needed to shore up the depleted capital of the nation's financial institutions, as evidenced by the plan of Japan's Mitsubishi UFJ Financial Group to buy a large stake in Morgan Stanley, which is weighed down by bad debt and market distrust.

This is a bittersweet moment in U.S. economic history. In one sense, the growing importance of foreign cash represents the triumph of a half-century of U.S. proselytizing for a global financial system in which money flows from those who have it to those who need it, regardless of borders. But it is also an unmistakable sign of U.S. economic decline. The global financial system the U.S. designed anticipated that American banks and financial firms would be the world's financial lifeguards; now those institutions are like exhausted swimmers a stroke or two away from drowning.

The financial crisis makes clear how much the interests of foreign lenders have become a top concern in Washington. A big reason the Fed and Treasury stepped in to rescue mortgage giants Fannie Mae and Freddie Mac, say U.S. financial officials, was to reassure China, which holds roughly $1 trillion in U.S. debt, that U.S. securities were safe. "Superpowers do not normally ask their diplomats to reassure other nations on questions of creditworthiness," says former U.S. Treasury Secretary Lawrence Summers.

Just 10 years after the U.S. oversaw the financial rescue of Asian nations, the U.S. now risks becoming the world's largest subprime borrower. This change of fortune has been hard to swallow politically. In his televised address Thursday, President George W. Bush blamed the current financial crisis on the "massive amount of money [that] flowed into the United States from investors abroad," rather than on greedy decisions by U.S. mortgage lenders and borrowers. In Friday's presidential debate, both candidates railed against U.S. economic dependence on China.

Powerful nations have been humbled before by an overdependence on foreign capital. Council on Foreign Relations economist Brad Setser notes that Britain was forced to end its seizure of the Suez Canal in 1956 because of U.S. opposition. Washington's main weapon: its threat to slash financial support for London, whose economy had been battered by World War II.

The U.S. isn't in remotely as bad shape as postwar Britain. It still is the world's sole military superpower, and the U.S. currency is still dominant. The latter is important because even if foreign holdings of U.S. debt grow, as is likely, the U.S. alone prints the dollars needed to pay those debts.

Even so, foreign lenders have a great deal of sway. If they were to dump U.S. government debt -- or be unwilling to buy more -- the interest rates needed to attract buyers of Treasurys would soar. The already fragile U.S. economy would absorb yet another hit.

China, Saudi Arabia and other big foreign holders are unlikely to take antidollar measures precisely because they own so much U.S. debt. To the extent the dollar declines, so does the value of those nations' holdings. Mr. Summers calls this situation "the financial balance of terror."

But it is naive to assume that this "balance" will protect U.S. interests indefinitely. Senior Chinese economists have voiced growing dismay about the outlook for the dollar, and the introduction of an additional $700 billion in debt might drive the currency's value down further, at least in the short term. "I think foreigners are being taken for a ride by the U.S. government," says Andy Xie, an independent economist in Shanghai.

Sovereign-wealth funds -- huge government investment funds -- have largely sat on their hands rather than buy additional stakes in U.S. financial firms. China Investment Corp., for instance, has been wary of increasing its investment in Morgan Stanley after it was criticized sharply at home for taking equity stakes in U.S. financial companies that have nose-dived.

In the Middle East, too, state investment funds in Kuwait, Qatar and Abu Dhabi say they have no plans to jump to the rescue of ailing Wall Street banks. In one hopeful sign for the U.S., some smaller state funds are looking for bargains in real estate, finance and insurance. "For investors that have the liquidity and have patient capital, I can see good opportunities," said Talal Al-Zain, chief executive of Bahrain's $10 billion fund, Mumtalakat.

The U.S. economy has managed to grow in recent years, even though Americans don't save much and the government has run huge deficits, because foreigners kept lending. The same was true in the 1980s. Now the U.S. needs foreign capitals to keep lending. Fred Bergsten, director of the Peterson Institute for International Economics, a Washington think tank, says the Treasury will have to stage a "road show" to explain the rescue plan to overseas lenders who may be considering euro investments instead.

Domestically, the reliance on foreign money means a loss of policy autonomy that Americans are simply going to have to get used to. Part of the accommodation is already occurring. The controversy over investments by sovereign-wealth funds has been reversed. Last year, lawmakers worried that the funds would gain political influence by investments in U.S. companies; now U.S. policy makers are worried that they won't buy new stakes. Efforts to erect restrictions against foreign trade may also lose momentum. The U.S. needs the world's money more than it thought it would and won't want to rile potential lenders.

---

Jason Dean in Beijing and Chip Cummins in Dubai contributed to this article.

(See related article: "Plan would include executive-pay curbs, taxpayer protections" -- WSJA September 29, 2008)

Thank you Ma'am!

Huge EUR/GBP order said to have gone through the market.
September 30, 2008

Alot of the euros weakness is seemingly down to a huge EUR/GBP order which has gone through the market. Sources are reporting that the interest was to sell some 3.5 yards of euros.

My ODL metatrader isn't working tonight - I opened a new trial account last night but can't get in tonight. Anyone else?

i've got no connection either

Yep flossie. It gave up the ghost at 10pm
And I had re-registered too.
Getting very tedious :S

Is a yard bigger or smaller than a shedload hils , these technical terms confuse me.

How big's your shed, gorgeous?

Thanks love. I'll try again in the morning. I was looking forward to making my fortune this evening :-P

A yard is 36" Dil. A shedload is what falls off the back of a lorry.

Next question?

It's just a pain, flossie.

But right now I'd love to watch Dillydo trying to stuff a billion of anything into a shed :)

Don't Euros come in metres?

I've been live on ODL for a couple of weeks now. I'd already gone to bed by the time you two had a problem last night, but my live a/c held up fine whilst a demo a/c that I was also running went down.

I couldnt re-register my account. login and password not showing.

Open Terminal and then click the Journal tab, Jeffie. That will give a log of everything that's happened.

still showing no connection this am, had to restart.

You're all welcome to take these targets with as many pinches of salt as you wish.