Forex Trading Basics: Currency Nicknames

Understanding forex news and information

When you read forex blogs, information and analysis sites, you might come across currency nicknames that may puzzle you a bit. Here are some of the currency nicknames that you are most likely to come across:

• Fiber: EUR/USD
• Cable: GBP/USD
• Sterling: Great Britain Pound
• Greenback: U.S. Dollar
• Loonie: Canadian Dollar
• Kiwi: New Zealand Dollar
• Aussie: Australian Dollar

See Also

• Forex Blogs, News and Analysis
  Learn about forex trading and the currency market

ECB Expected to Cut Interest Rates

Euro tries to remain fundamentally strong in forex trading

On Thursday, the European Central Bank is expected to cut interest rates. Right now, the ECB is sitting at 1.5%. A 50-point cut to 1% is the expectation.

Unlike the U.S., which has gone all in with near 0% interest rates and quantitative easing to boot, the ECB has been reluctant to take such drastic measures. Instead, the ECB has been focused on stability, reports Forbes:

"We want to establish price stability in the medium and long term," he told the European Parliament’s economy committee. "What’s important for confidence today is to take the appropriate decisions."

If the euro can maintain a fundamentally sound position in forex trading, it is likely to see substantial long-term gains as the global economy moves out of recession.

See Also

• Euro in Forex Trading
  Currency trading and analysis

Japanese Yen Heads Higher in Forex Trading

Yen higher on risk aversion in currency trading

As risk aversion and uncertainty set in, the yen is moving higher in currency trading on the FX market. The Japanese yen often moves higher in forex trading when risk aversion becomes and issue. Japan has a relatively stable banking system and is considered a safe haven investment.

Right now, with uncertainty over the economy, a falling stock market and concerns over goverment power grabs, investors are looking for safe havens. Another issue is that many European countries are unwilling to commit the kind of cash the U.S. is offering for economic stimulus. As a result, the uncertainty is providing a catalyst for the yen to rise against the U.S. dollar in forex trading.

See Also

• Japanese Yen in Currency Trading
  Forex trading with world currencies
• More on the Japanese Yen in Forex Trading
  Charts for USD/JPY

U.S. Dollar Sees Strength in Currency Trading

Economic uncertainty sends investors back toward the greenback in forex trading

Earlier today the U.S. dollar saw some strength in currency trading. Indeed, the dollar rally last night and this morning has been seen as a continuation of the gains made toward the end of last week.

The greenback has been gaining again in forex trading since continued concerns about the economy have surfaced. Once again, recent comments by Timothy Geithner have provided an impetus for a dollar rally as investors look for safe havens. This time, it was his comments about how much more assistance large banks are going to need in order to get through this global financial crisis.

Another consideration is the forced resignation of GM CEO Rick Wagoner. The measures the Obama Administration is taking is sending pessimism through the stock market, and reflecting in the currency market.

See Also

• U.S. Dollar in Currency Trading
  Forex trading on the currency market

U.S. Dollar Forex Trading Forecast

Big news this week could help a dollar rally in currency trading

The U.S. dollar forex trading forecast once again looks uncertain. There are three major economic events happening later this week that are likely to contribute to the future of a dollar rally in currency trading on the FX market:

1. ECB interest rate decision.
2. G20 summit to begin Thursday.
3. U.S. non-farm payrolls.

Concern about the U.S. economy is likely to lead the dollar higher in forex trading. GFT’s Kathy Lien analyzes a possible dollar rally in currency trading for FX360:

It will not take much for the dollar rally to last because the previous sell-off in the dollar was triggered by better than expected economic data and hope that the Obama Administration’s alphabet soup of initiatives will work. If investors become skeptical of a recovery, and they have a million reasons to be, equities could sell-off once again, driving the U.S. dollar higher. Also if the European Central Bank caves and signals that they are ready to adopt Quantitative Easing, aggressive selling of Euros will push the dollar higher as well.

See Also

• U.S. Dollar in Forex Trading
  Currency trading on the FX market

London Session – March 30, 2009 8:01 AM

The buck continued to gain ground in the London session as risk aversion remained the order of the day. Weekend comments for US Treasury Secretary Geithner that banks will continue to need “large amounts” of aid, coupled with the ousting of GM’s chief executive look to be the major headlines behind the flight to safety. European bourses are getting hammered and down -2.6% on average thus far while US futures point to a -2.2% open and an S&P back below the critical 800 support zone. Gold is – lower near 914/913 despite the risk aversion as USD strength outpaces demand for the precious metal thus far. Full text »

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Asia Session – March 29, 2009 11:13 PM

The first Asia session of the week began with lackluster price action.  Most of the majors and crosses traded range bound for much of the session.  JPY pairs looked at first as if they wanted to fill the gap lower on the open, but  failed to do so after multiple attempts.  After managing to deal above the 98 handle for the bulk of the session, USDJPY bids seemed to have dried up, and the pair finally broke lower despite a weaker release of industrial production.  Full text »

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03/29/2009 – USD bounces back–Are risk appetites set to worsen?

* USD bounces back–Are risk appetites set to worsen?
* G20 and SDR talk is just noise
* ECB meeting next week a likely catalyst for more EUR weakness
* Key data and events to watch next week

One week after the USD plunged against other major currencies, the greenback has come bouncing back. The reversal stems from many reasons, but the keys to watch are: 1) Fears over USD devaluation stemming from the Fed’s buying of Treasuries were allayed by solid investor demand for bio of new Treasury issues spanning the 2,5, and 7 year terms. Contrast that with a failed UK auction (demand was less than the amount offered) of only about GBP 1.7 bio in 40-year bonds. 2) Outlooks elsewhere worsened further: Eurozone industrial new orders plunged to a YoY decline of -34.1%. And that was January data. Do you think orders picked up in Feb. or March? Not bloody likely. The March Swiss KOF leading indicator fell to -1.79, a new low in the current downturn. UK retail sales slumped -1.9% MoM in Feb. after a slight improvement in Jan. In Japan, retail trade in Feb. dropped further to -5.8% YoY from -2.4% in January. 3) Anticipated ECB rate cut next week and potential moves to quantitative easing (more below). 4) Greater detail from the US Treasury on plans to entice private capital to take on toxic bank assets. This is still a work in progress and we’ll need to see if the buyers and sellers are able to find satisfactory price levels to engage, but it dissipated a negative hanging over the USD. 5) Lack of follow-through–much of the week was spent testing the USD downside, with some notable action following ill-considered comments from Tsy. Sec. Geithner on the USD reserve role, but the lows established last week held firmly and USD sellers eventually threw in the towel.   Full text »

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The Fed and the U.S. Treasury are "All In"

A number of efforts are being made to stimulate the U.S. economy

Right now, the name of the game is economic stimulus. It has been for quite some time now, but the Fed and the Treasury seem to have become really serious recently. FX Street reports that these two agencies are "all in":

The Fed and the US Treasury are now throwing everything into the battle to eliminate dislocations in the financial system, avert a deflationary spiral, and generate growth again over the medium term. Their reasoning is that the US remains mired in a deep recession.

From new initiatives to quantitative easing, the Treasury and the Fed are implementing new programs and increasing the money supply at an unheard of rate. Indeed, there are concerns about the national debt and the fundamental effects these efforts will have down the road.

But, overall, Wall Street seems happy with the moves, and equity markets have been gaining. But other economic indicators — like GDP and unemployment — remain a problem.

See Also

• Forex Trading and Economic Fundamentals
  How will the U.S. dollar fare long-term on the currency market?

Japanese Yen Forex Trading Forecast

Yen moves higher in currency trading

The Japanese yen forex trading forecast is looking stronger right now. As Japanese officials blast the Chinese plan for a global reserve currency based on IMF drawing rights, the yen is moving higher. Yen is especially high against the euro in forex trading right now, as the 15-nation currency takes a beating over remarks made by the German Finance Minister.

Indeed, the yen is moving higher as Japanese officials assure the markets that currencies will not be a major topic of discussion at an upcoming G20 meeting. 

The Japanese yen forex trading forecast is calling for some further gains, especially against the euro. With the euro likely to be forced into quantitative easing — despite EU leaders’ reluctance — the yen is likely to remain stronger against the euro.

See Also

• More on the Yen in Forex Trading
  Forex trading with the Japanese yen
• Yen in Forex Trading
  Forex trading with world currencies

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