Forex rebates on every trade - win or lose!

Not sure whether cable is worth buying as oversold. Usually cautious of currency trades as things tend to go a lot further than expected and this whole de-leveraging process and carry trade reversal seems to have a fair tail wind behind it. Market ticker is ranting on about treasuries today and Hank and Ben digging themselves into a bigger hole, whether that means the dollar is about to implode I have no idea. I shall do a little more research!

Anyone for a Brazilian?

Is that a real clue?

:-)

SC
I'm with you, I have trouble understanding Hils and Choccy at times. Why cant they just say what they mean like men do.

I was picturing one of these, so yes please!

Please try to keep up, Jeffie. I've already given you 50 yards of clues!

Yes, I can guess

Спасибо. Насчет системы, в общем то ничего особенного :) Да и mathemat очень верно описал график моего эксперта на форуме. Риски в ритме чемпионате должны быть запредельными, но как мы видим у многих они просто абсурдные. Моя система построена на желании торговать и держаться на плаву имея все шансы вырваться в лидеры при благоприятных стечениях обстоятельств. С верой в победу и Вам желаю от души того же самого.

October 27, 2008
Flows remain “forced”

Dealers report few speculative flows again today with most trading decisions taken under duress. The sharpest moves are being attributed to prime brokers “selling out” clients; pulling the plug on all manner of positions as margin collateral falls to the point where clearing firms essentially close the doors on hedge funds without warning.

When those flows hit the market, the firm doing the liquidation tends to use minimal “finesse” in the liquidation process, hitting bids indiscriminately, sending markets downhill like a snowball. We’ve seen it repeatedly in all the asset classes.

Keep positions small in this environment as fundamentals and technicals matter less in a market with few speculative flows.

NEW YORK (Dow Jones)--The dollar rose sharply against the yen Tuesday after U.S. stock markets shot higher and on speculation the Bank of Japan may cut interest rates at a Friday meeting.

As the Dow Jones Industrial Average rose by more than 800 points, the dollar jumped by nearly five yen, reaching an intraday high of Y98.50. The euro also took off against Japan's currency, reaching an intraday high of Y124.69.

Currency investors tend to become less risk-averse when U.S. equity markets rise, and so they sell the lower-yielding currencies such as the yen and buy higher-yielding currencies or other assets, which offer better returns.

"I think the key thing behind today's move is a recovery in risk appetite, reflected in the move higher in equities," said Adam Boyton, a currency strategist at Deutsche Bank in New York. "Despite the bounce, however, I think that fundamentally there's still a bear market in equities and the dollar against the yen will again print lower."

Tuesday afternoon in New York, the euro was at $1.2715, up from $1.2521 late Monday, while dollar was at Y97.60, up from Y93.57, according to EBS. The euro was at Y124.10, up from Y117.17. The U.K. pound was at $1.5923, up from $1.5615, and the dollar was at CHF1.1555, down from CHF1.1564 Monday.

The Nikkei newspaper reported in its Wednesday morning edition - during New York trading hours Tuesday - that the BOJ is eyeing an interest rate cut of 25 basis points to help support a domestic economy battered by a strong yen and swooning share prices.

Such a cut would bring the BOJ's target for the unsecured overnight call money rate down to 0.25% from the already ultra-low rate of 0.5%. The BOJ policy board is expected to take into account market conditions and other factors when it makes a final decision at a meeting Friday.

The talk of a BOJ cut caused a knee-jerk drop in the yen as this would further reduce the already-small yield investors receive on yen holdings.

But the speculation of a BOJ rate cut seems to run contrary to comments made Monday by the deputy governor of the BOJ, who suggested the bank may leave rates on hold. Hirohide Yamaguchi told reporters that Japan's policy interest rate has been kept accommodative, suggesting that the central bank is unlikely to loosen monetary policy immediately.

The central bank's short-term rates are "extremely low given Japan's economic growth rates and the pace of price increases in the country," Yamaguchi said.

Currency markets on Wednesday will turn their attention to an interest rate decision by the Federal Reserve. It is expected to cut rates by as much as 50 basis points, which would bring the Fed's benchmark rate down to 1.0%.

Analysts aren't sure how the dollar might react to a 50-basis-point rate cut by the Fed. On the one hand, it would tend to reduce returns on dollar-based assets, which could hurt the dollar. However, markets may also view it as the necessary medicine to get the U.S. economy growing again, which could send a signal of support for the greenback.

Meantime, the euro's exchange rate against the dollar gyrated sharply Tuesday. The single currency fell to a new two-and-a-half year intraday low of $1.2329 early, but rebounded late in the New York session to close around $1.27.

The single currency's late rally was due largely to the rebound in U.S. stock markets. The dollar has been gaining in recent weeks on the back of weaker stocks, which led investors to dump bets on oil, emerging markets and other riskier assets and put their funds back into greenbacks.

The improvement in risk sentiment Tuesday helped the commodity-linked currencies such as the Australian and Canadian dollars.

The Aussie currency reached as high as $0.6429 Tuesday after falling to a fresh five-year low of $0.6020 near the start of the session. Canada's dollar also ended stronger, with the U.S. currency trading at C$1.2841 late Tuesday, down from a four-year high of C$1.3003 reached earlier.

CANTERBURY (Reuters) - The credit crisis could turn out to be more far-reaching even than the 1929 crash and big interest rate cuts are needed to avoid a deep recession, Bank of England policymaker David Blanchflower said on Wednesday.

Blanchflower, who has consistently been the most dovish member of the Bank's nine-member monetary policy committee, criticised his fellow policymakers for not being more forward looking and said inflationary pressures were now "clearly dissipating."

"My view remains that interest rates do need to come down significantly -- and quickly," Blanchflower told an academic audience in Canterbury. "If rates are not cut aggressively we do face the prospect of a relatively deep and long-lasting recession."

The U.S. Federal Reserve cut its key federal funds overnight lending target rate by a further 0.5 percentage point on Wednesday to 1 percent, the lowest since June 2004. The Bank of England's key interest rate stands at 4.5 percent.

Blanchflower said the energy price shock, which took oil prices up to a record high of $147 a barrel in July and down to below $70 now, would be less damaging than that faced in the 1970s. In contrast, the international financial problems may turn out to be more severe.

"It is even possible that this event may turn out to be more significant than the 1929 crash which primarily involved bank failures in the United States," he said. "The current difficulties in financial markets are more global in nature and more comparable to what happened in the First World War."

Interest rate cuts were needed, he said, not to protect the banks but to protect the public from the banks, many of which had made unwise lending decisions.

GOVT ACTION WELCOME

Blanchflower welcomed recent government efforts to re-capitalise major banks but said lending conditions would take some time to recover.

"Any improvement is likely to be passed on to households and the corporate sector slowly," he said. "Rather credit availability is more likely to be curtailed further in the near future."

He said the impact of constrained credit conditions had yet to fully feed through to the broader economy and a further retrenchment of consumer and investment spending was expected. Growth could take some time beyond 2010 to rebound, he said.

"It's going to depend on the oil price, it depends on what happens in China, it depends on what the U.S. does, whether the U.S. comes out of recession or not," he said.

Against such a backdrop, Blanchflower said worries about inflation were misplaced. There was no evidence workers were bargaining for wages to keep up with the cost of living and unemployment was set to rise.

More than two million people were likely to be out of work by Christmas, he repeated. Blanchflower told the Guardian newspaper the same thing on October 15. The number of Britons out of work now totals 1.792 million.

The economy contracted in the third quarter for the first time in 16 years and Blanchflower said he expected a further contraction in the fourth quarter and through 2009.

He implied his colleagues on the committee should have realised the gravity of the situation earlier, as he had done.

"With hindsight, monetary policy has not been sufficiently forward looking," he said. "Monetary policy makers must take a medium-term view concerning the forces hitting the UK economy and set policy accordingly. It is not sufficient to consider the data month by month until it emerges that the UK is in recession."

So what we're saying is that Blanchflower, the Dove, was actually Blanchflower with the Eagle vision.

Is it me or has cable got a strange feel about it at the moment? At this stage in the game I'd expect to see it around 2 cents lower than it is at around $1.56.

I've also been struggling to get orders away. No problem in selling sterling, but a real effort to buy it back.

So my suspicions were correct. When you struggle to get trades away, it's normally a sure-fire sign that the market's about to turn.

NEW YORK (Dow Jones)--The U.S. dollar's reputation as a safe harbor appears to have been restored by its rally in past weeks, even as the financial crisis has spread across the globe.

However, some analysts are warning the dollar's recent strength is an illusion. They predict the rally will only set the stage for a long decline tied to the country's high level of debt, and ultimately challenge the dollar's status as the world's reserve currency.

"The United States currency may fail," Ladenburg Thalmann's Dick Bove wrote in a note to clients last week. "The United States is operating a 'guns and butter' economy while cutting taxes, with Americans unwilling to buy U.S. debt and foreigners possibly losing their appetite."

The dollar bears believe the severity of the current financial crisis will force the U.S. to make inflationary moves that will undermine world confidence in the dollar, causing central banks to shift their holdings to alternative currencies, and possibly result in rampant inflation.

Despite the dollar's recent strength and talk that the U.S. is now facing the opposite problem - deflation - the dollar bears point to rumblings from the rest of the world, including recent comments from Russian and Chinese leaders suggesting the global currency system based on the dollar needs to be reformed, and the calls from British Prime Minister Gordon Brown and French President Nicolas Sarkozy for a new Bretton Woods conference, referring to the 1944 treaty that acknowledged the dollar as the world's reserve currency and fixed its value.

Whether currency strategists are bearish on the longer-term strength of the dollar or not, they tend to agree the dollar's current rally is based, at least in part, on technical factors rather than fundamental strength. As funds face redemption calls from investors and margin calls from banks, they are pulling out of their highly leveraged investments in overseas markets. To do this, they sell local currencies and buy dollars, contributing to both the decline in local currencies and the rally in the dollar.

"The dollar's strength is false," said Joan McCullough, a macroeconomic strategist for East Shore Partners Inc., and 35-year veteran of Wall Street. McCollough believes that as the U.S. faces the prospect of loading its balance sheet with risky investments in order to prevent the failure of the financial system, it will be forced to either issue more Treasurys, or to print money to reduce the size of its debts.

In either case, she believes the appetite for foreign investors to hold either Treasurys or dollars will wane as the Treasury Dept. floods the market and the US's balance sheet becomes laden with subprime assets.

"The magnitude of the financial accident that we are still in the throes of is so unquantifiable," McCullough said, "that the amount of money that (the U.S. government is) going to have to print is probably going to push the dollar to the point of no return."

McCollough expects the euro's value to decline with the dollar, and for the Japanese yen and Chinese yuan to have the upper hand after the dust settles.

A scenario similar to this is also predicted by billionaire financier and currency speculator George Soros in his book, "The New Paradigm for Financial Market," published in May. He predicts that because the world's willingness to hold dollars has been impaired, the U.S. government's moves to provide monetary and fiscal stimulus during this crisis "could set off a flight from the dollar and raise the specter of runaway inflation."

"The decline of the dollar as the generally accepted reserve currency will have far-reaching political consequences and raise the specter of a breakdown in the prevailing world order," he writes. "We are liable to pass through a period of great uncertainty and destruction of financial wealth before a new world order emerges."

Merrill Lynch's global currency strategist Daniel Tenengauzer holds a more conventional view of the dollar's future. He sees the possibility of a dramatic decline in the dollar's status at the center of the world financial system as very unlikely, largely because he says there's no alternative to the liquidity, depth and transparency that the U.S. fixed income markets provide.

Instead, he sees a process over a period of decades in which the dollar slowly cedes some ground to the euro or other currencies in the world's central banks. This would happen as Europe and other economies make the political and structural reforms necessary to make their markets as attractive as the U.S., he said. Even in that scenario, the dollar would remain a major part of central bank holdings, though it might share that status with other currencies.

"If there is one factor that could put the dollar's reserve currency status in jeopardy is the fact that the U.S. Treasury market, and more broadly the fixed income market in the U.S., is less liquid today and there are concerns about fiscal spending and the issuance of it," Tenengauzer said. "That is one side of the coin, but the other side of the coin is that you still don't really have an alternative."

I imagine the FX traders are too busy shorting the pants off cable and euro/$ and making piles of dosh to have time to post, but I like the info on this thread, so just making sure it stays on the front page.

I'm with Helen on this: why is this thread drifting down the charts? C'mon, Choccie, Hil and co., get posting again!

It's all becoming a bit boring I'm afraid, DelBoy, and not just down to me and Chocopops.

Well I'm currently homeless until the squatters (builders) move out, so am not trading at the moment. Hope to be back in the next few weeks.

Well we have 19 Forex pairs live behind our Forex button. We are developing more stuff so will officially launch the live forex area shortly