Items Tagged With december 2005
Investica: Daily market analysis 29-12-05 - Sterling confidence falters.Written By: forexblog.org2005-12-29 06:00:35
Sterling confidence will remain fragile in the short term after recent sharp losses. The economic data, however, has been generally favourable and not weak enough to trigger a further near-term interest rate cut. In this context, there is likely to be some reassessment of the situation and at least a limited corrective Sterling recovery. Low liquidity will maintain the risk of erratic trading in the short term. Overall, there should be strong Sterling support below the 1.7150 level against the dollar. Sterling remained under pressure on Wednesday, dropping sharply against the Euro to a lows around 0.69 and failing to secure a significant recovery in New York. The UK currency was also unable to sustain any headway against the US dollar and weakened sharply to lows below 1.7150 as low liquidity helped trigger erratic moves and stop-loss selling. There were also reports of merger-related flows out of Sterling and rumours of central bank Sterling selling. The UK currency secured a fragile recovery in early Europe on Thursday. Interest rate considerations will remain very important in the short term with further market expectations of a cut in UK rates early in 2006. The data over the past week suggests firm consumer spending and a small rise in house prices. This combination should deter the Bank of England from a further near-term cut in interest rates. On Thursday, there was a reported drop in consumer confidence for December, but there was firm growth in mortgage lending for November Although Sterling sentiment will remain weak, there will be the potential for a sharp correction given that favourable news has been ignored over the past 24 hours. Erratic moves will remain a high risk in the short term.
Forex Holiday HoursWritten By: Rich2005-12-25 17:25:50
I've done a quick survey of a couple of forex brokers to see when they re-open since technically, the forex market never closes. I found that all re-open Monday evening (EST) or Tuesday morning (EST). I don't foresee there being much volume. I couldn't say for sure though since this is my first Christmas holiday trading. Major Forex Broker's reopening: fxcm.com : Tuesday, the 27th at 2 am (EST)
forex.com : Monday, the 26th at 7 pm (EST)
cmsfx.com : Monday, the 26th at 5 pm (EST)
GFT : Monday, the 26th at 6 pm (EST)
fxsol.com : Tuesday, the 27th at 1 am (EST)
Grow account 10% 73 timesWritten By: Rich2005-12-15 13:58:43
This was a modified post by Brian in the forums. I kind of like it. How realistic is it? "Want to have some fun with MS Excel? Below I have drawn what the 1st 4 cells in an excel sheet will read. Put $1000 in cell A1. Cell B1 is A1 plus 10%. In cell A2 put the formula =B1. Now B2 will read $1210. Now grab the lower right hand edge of each column when it displays a little plus sign and pull downwards, which will copy your formulas downwards. By column 73 you are a millionaire. Now the only question is - how long to grow your account 10% and how long to do it 73 times?
btw, you are going to be wanting to be sitting down if you try pulling these formulas down past row 100 or so. (could that represent 100 weeks?)" Click on the thumbnail to see my spreadsheet:
Forex Reader: Booming Chinese economy might catapult it to fourth placeWritten By: forexblog.org2005-12-20 19:30:22
The Chinese economy has grown far more than estimated as per a year-long census. China’s economy is thought to be 17 percent larger than was estimated. This can help place the country at the fourth position among the list of the world’s largest economies. In such an event, it will have moved ahead of the United Kingdom. Economists think these figures will lead the US and Europe to urge china to let its currency appreciate further. Beijing revalued the yuan this year by 2.1 percent. Free trade can help the yuan gain up to 7.74 against the dollar in a year. The nation’s services industry accounted for more than 40 percent of GDP last year. Bloomberg reports: “By the end of next year the Chinese economy will be half the Japanese economy,†said Kenneth Courtis, vice chairman for Asia at Goldman Sachs Group Inc. “The whole balance of power in this region is shifting.â€
The Future of the DollarWritten By: Rich2005-12-30 15:50:03
There is an article in the latest issue of Newsweek that doubts the US Dollar will be able to remain bullish in 2006 for several reasons: 1. US record trade deficit
2. End of interest rate hikes in the US with the start of interest rate hike cycle in Eurozone and Japan
3. China's inability to continue its USD buying spree due to political reasons and possible Yuan revaluation
4. US Manufacturers statement that the USD must decline by 12 percent due to rising energy prices
5. Gulf Coast rebuilding costs
6. Growing toll of the Iraq war There's a lot facing the dollar in 2006 but that's also what "experts" thought at the start of 2005. http://www.msnbc.msn.com/id/10513234/site/newsweek/
forexblog.org: South African Rand settles down in 2005Written By: forexblog.org2005-12-26 23:30:27
As 2005 draws to a close, currency traders are taking a collective step back, in order to asses the performance of forex markets. Among the biggest losers, surprisingly, is the South African Rand. Having nearly doubled in value against the USD from 2001 through 2004, the Rand has depreciated 12% against the USD through December. The silver lining, as far as economists and fundamental analysts are concerned, is the marked decrease in volatility surround trading in the Rand, due largely to an increase in liquidity. Rand bulls are already looking to 2006, when GDP growth is expected to exceed 5% on the heels of strong capital inflows and high commodity prices. Reuters reports:
Deepening liquidity also points to growing confidence in an economy which most analysts agree has been well-managed -- especially by emerging market and African standards.
Read More: Has S.Africa's wild rand finally been tamed?
B.M.: US Economy UpturnWritten By: B. Martin2005-12-02 15:30:13
In the period July-September the US economy rose up to 4 percent – as surveys say, it is the biggest rise during this year. Texas economic growth is beyond comparison. The revised data will reflect stronger spending on construction, retail goods and business inventories, economists said. There can be made the only one conclusion, last events and hurricanes didn’t influence the US economy sready pace growth.
US economy to survive is impressive, in one moth it coped with such a strong devastations that brought hurricanes, said Donald Ratajczak, an economic consultant at Morgan Keegan & Co. in Atlanta. Unfortunately, US population is not so optimistic as the government, 43 percent of questioned said, there is a decline in the US economy.
forexblog.org: China revises GDP figuresWritten By: forexblog.org2005-12-21 00:00:22
Several weeks ago, Chinese officials suddenly announced they had reason to believe China’s economy is much larger than past GDP figures indicate, and they immediately began amassing data and building models to prove their point. Yesterday, the same group of officials released a revised set of GDP figures, which raised the value of China’s economy by 17% and catapulted the country into 6th place in global nominal GDP rankings. Apparently, past GDP calculations had grossly underestimated the size of China’s booming service sector, which represents 41% of China’s economy. In addition, the new GDP figures reveal that fixed asset investment is actually at a sustainable level. In short, China’s economy is both larger and more structurally sound than previously believed. The Financial Times reports:
The new, more rosy picture of economic strength could fuel calls from the US for China to revalue significantly its currency, which critics say is being held at a level that grants an unfair trade advantage.
Read More: China revises size of economy up by 17%
forexblog.org: ECB signals further rate hikesWritten By: forexblog.org2005-12-23 04:30:27
Yesterday, I reported that Central Banks are becoming more transparent in matters of monetary policy. As if on cue, today the European Central Bank and Bank of England offered separate insight into the directions of their respective interest rates. The ECB hinted that it would likely raise interest rates twice in the next year from the current level of 2.25%, while the Bank of England indicated that a cut in its interest rates would take place in March. The corresponding changes in interest rate differentials should benefit the Euro and hurt the British Pound. Reuters reports:
But some analysts see U.S. rate rises stopping there. The latest report about the ECB is seen as likely to boost the euro. “It’s a reminder that not only the Fed but also the ECB is raising interest rates,†said one currency strategist.
Read More: Euro jumps briefly on rate speculation, pound down
forexblog.org: China may widen trading band on YuanWritten By: forexblog.org2005-12-15 09:20:02
In theory, the Chinese Yuan can fluctuate (read appreciate) by .3% per day. In reality, the Central Bank allows the currency to appreciate by less than .01% per day, which has limited the Yuan’s net appreciation against the USD to only .4% since the 2.1% revaluation in July. As a result, the G8 governments are clamoring with renewed vigor for China to further revalue. In fact, a rumor has been circulating that China will widen the Yuan’s daily trading bands to 1%, which would enable the currency to appreciate faster. Many analysts expect the Central Bank to announce such a move before the Chinese New Year on January 29th. Bloomberg News reports:
“Given the track record of the Chinese government preferring to announce key policy changes ahead of long holidays, it's convenient for the market to anticipate the next key move on the renminbi could come in the later half of January,†said one analyst.
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