Forex rebates on every trade - win or lose!

I'm not actually going anywhere (apart from a few weeks with GoldDog in Spain during the summer), but Sue's right in so far as I do intend to semi-retire.

My interest in stocks is now pretty minimal and I am limiting my FX trading to just one trade a day with a view to being out of the market around mid-morning. That's enough for me and I hope that it will help me to raise my tennis game.

As my trading is 100% chart based from the FXCM feeds, I find that many of the tools on this site are now surplus to requirements so I've therefore cancelled my am subscription. I'll still pop into Lambykins Dutch Coffeeshop from time to time for a slice of "special" cake and to check that Jeffmack is still wearing his Dutch Cap and to wind Dazzling Dave up. You can always leave a message for me there.

Hilary, sorry to hear you're no longer going to be on this thread. You deserve great credit for encouraging lots of us to look at Fx trading and for keeping the header updated. I still haven't mastered it but I'm convinced Fx is a great thing to trade, you can concentrate on the currencies and related news only, no worries about overnight profit warnings.

Once again, many thanks.

Rob. (aka the other SC)

hilary,
Time to move on then, as all things must, but it is a shame we will no longer have the benefit of your input, a great loss.
I hope you will accept my thanks for the help I received, and my best wishes for the future.

Regards,

SC (also the other one)

hilary

I will miss your magic touch. You lead this thread by example and constantly emphasise good trading practice.

All the best with your one trade a day, that is my new goal in life. I may however have to give up a little golf to achieve it.

Regards and all the best

Bob

well done on getting away from the screens! See you at the masters tennis in November at the Albert hall:)

Greenspan, Snow to meet senators on China policy Thurs.
AFX


WASHINGTON (AFX) -- Treasury Secretary John Snow and Federal Reserve Chairman Alan Greenspan will meet with Sens. Chuck Schumer and Lindsey Graham on 'China trade policy' Thursday, the Treasury Department announced Wednesday. The two lawmakers have introduced a bill that would penalize China if it is found to be manipulating its currency, the yuan, and another that would slap tariffs on Chinese goods if Beijing doesn't force a revaluation of the yuan.



This story was supplied by MarketWatch. For further information see www.marketwatch.com.

The Euro has certainly missed the party that the US is having against the and Yen.
Yen staying under 111, pound above 1.7925?
Stop running on yen, could be a good short for post figures and post Tanken later tonight?

Hilary - the very best of luck. Thank you for all your help.

MG

Are you still shorting cable?

Sorry mate I haven't been at the screen all day - been out playing Golf this afternoon.

The answer is yes - still with the one I had from last Friday ;))))

Drinks on mg then...:-)

Great call by the way!

When does the Forex market re-open next week?

Tomorrow night SC

Great, thanks Choccie. Must say I'd though of cable as a good short but......

Might try and get a piece of the action on Mon.

Just bringing this thread up (pardon me!) for Monday morning.

Log on to http://www.cantos.com for:

Deep rate cuts on the way in the UK
- Video interview with Alan Castle, UK Economist, Lehman Brothers - Weak data on the UK economy means that deep rate cuts will be introduced over the next few months, according to Alan Castle. He adds that the biggest black cloud on the horizon would be a halting in United States economic growth.

And there's this from earlier in the week:

http://www.moneyam.com/action/news/showArticle?id=867632

Anyone know of a site or facility to download historical eod rates? I want to import into excel for a few currencies to backtest strategies. I have a site where you can download the last two weeks data but then you need to separate it into the relative currencies, wheras I need a list of prices for each pair listed by date.

(Filed: 17/07/2005)

Signs that sterling has run out of steam

Throughout Labour's term of office the UK's external trade has been a notable weakness in an otherwise good performance.


The weakness has been partly due to the extraordinary strength of the pound but this very strength has also served to distract attention from the external accounts. After all, if foreigners want to hold pounds what is the problem? Meanwhile, because other parts of the economy were doing so well it didn't seem to matter that our overseas trade was doing badly. But all this is set to change.


Assessing the problem

In cash terms, the UK's current account deficit has recently been very large by historical standards. Last year's deficit of 23bn was only 3bn short of the all-time record deficit set in 1989, at the peak of the Lawson boom.

But, as our top chart shows, the picture looks less worrying when the deficit is compared to the size of the economy. Last year the deficit amounted to only 2 per cent of GDP.

But a closer look at the detail suggests that the UK's external position may not be as robust as it seems. There has been a deterioration in the trade balance, encom-passing both goods and services, where the deficit now exceeds 3 per cent of GDP. What has offset this deterioration has been the strength of our net investment income, which has a surplus of some 2 per cent of GDP in each of the past two years, four times larger than its average surplus since 1955 of just 0.5 per cent of GDP.

But can the UK's robust investment income surplus be sustained? There are several reasons to be cautious. For a start, the UK has a smaller stock of investments overseas than other countries have in the UK. Given this, it is extraordinary that UK investors have been able to achieve a greater return on that investment than overseas investors have managed on their bigger interests in the UK. It suggests that our investment expertise really is stellar. Or have we just been lucky? Either way, there is no guarantee that these conditions will last.

Second, as long as the UK is running a current account deficit, its net international investment position will get worse over time, making it harder for UK investors to continue to generate higher earnings than overseas companies achieve on their UK investments.

Third, one positive influence in the past year or two has been the strength of the UK oil companies. Should the oil price fall, their earnings would fall too.



Economic weakness

The period of a strong pound and weakening external trade has paradoxically been one of great success for the overall economy. There are no secrets about why this is. Until recently, the growth of consumer spending has been strong. Meanwhile, government spending has grown strongly too.

But under current fiscal plans, the growth rate of government spending is set to slow to 1.7 per cent by 2008/9, compared with 4.2 per cent last year. Meanwhile, consumer spending is already slowing sharply. Admittedly, corporate investment could pick up but it is so small in relation to consumer spending that this is unlikely to make up the difference.

The upshot is that overall growth is set to slow. Somehow I think that come November we will be denied our usual treat of listening to the chancellor castigating outside forecasters for mistakenly anticipating a slowdown while his own forecasts bask in the glow of unexpected vindication. In short, he will have to eat humble pie - or at least the Gordon Brown version of it.

Moreover, the slowdown is unlikely to be a flash in the pan. If economic growth continues at 2 per cent or below - and it could be well below that - then much else starts to go wrong as well. Tax receipts will not grow as planned so the fiscal numbers will be worse and unemployment will rise.

The way out of all this is for exports to grow more strongly. In view of the weakness of overseas demand this is not going to happen unless British exports are more competitive, and in the short run that requires a weaker pound. Essentially we will have to reverse much, if not all, of the rise in the pound since 1997, clearly shown in our lower chart. In these conditions, British producers would be able to win a higher share of markets, both at home and abroad.

This would be rather like the period immediately after we left the ERM in 1992, when our economy grew despite continued weak growth on the continent and in consumer spending.

The key is interest rate policy. The pound has already come down a bit but if I am right in thinking that August's rate cut will be the first of many then the pound could really get the skids under it. A fall of between 10 and 20 per cent is perfectly plausible.

Wouldn't a sharp fall in the pound initiated by lower interest rates inhibit the MPC from cutting rates further? It all depends on the context. Provided that this fall came against a background of weak aggregate demand - which is my hypothesis - any upward pressure on inflation would probably be limited.

In these conditions, I think that the Monetary Policy Committee would be able to tolerate a good deal of sterling weakness.


Against which currency?

How all this pans out against the dollar and the euro will depend upon what happens to the dollar/euro exchange rate, over which the UK has no influence. If I am right in expecting the euro to resume its rise against the US dollar, then most of the pound's decline will come against the euro.

My forecast is for the pound to fall from its current rate of around 69p against the euro (or 1.45 euros to the pound) to a rate of 82p (1.21), a fall of some 15 per cent. In these circumstances, the pound would hold reasonably steady against the US dollar.

But if the dollar remained stronger, then because the euro has a greater weight in our trade, the pound would need to fall against both the euro and the dollar to achieve the fall in the average exchange rate which I believe is warranted, with the dollar/pound rate perhaps dropping to something like $1.55 by the end of next year.

Either way, savour your overseas holiday while you can. Next year's may cost much more. But don't despair even about that. A much weaker pound is just what the economy needs. It would lay the foundations for greater prosperity in the years ahead.

Roger Bootle is managing director of Capital Economics and economic adviser to Deloitte. You can contact him at roger.bootle@capitaleconomics.com

Log on to http://www.cantos.com for:

US trade deficit not sustainable
- Audio interview with David Wyss, Chief Economist, Standard & Poor's
- The US economy is currently doing "a lot better" than expected says David Wyss. Manufacturing data has been strong and the picture on the US budget deficit is improving faster than anticipated. The situation in the Middle East, continuing trade deficit and high price of oil all remain concerns, he adds.