Most Important Fundamental Factors That Influence EUR/USD

Posted by admin on October 18, 2010
Oct 182010
 

EUR/USD is the most traded currency pair among the traders from all the corners of the world including Singapore. As Europe and USA are the biggest world economical zones, there are many factors influencing EUR/USD currency pair that make it the most volatile and active in the Forex market. For that reason Forex traders see a lot of trading opportunities here and most of the Forex brokers offer the lowest spreads for EUR/USD due to its popularity. In this article we will discuss some fundamental factors that influence on the rate and movements of the EUR/USD currency pair and will help you predict its rates changes.

The Monetary policy on EU is regulated by the European Central Bank (ECB). The main target of ECB is the price stability. The price stability is preserved if the increase of the Harmonized Index of Consumer Prices is not more than 2%. Every second Thursday of the month, the board of ECB announces the interest rates. During the first meeting of each month the ECB gives a press conference where it clarifies the perspective of the overall economy and monetary policy in particular. The best indicator for the pair EUR/USD is the difference between the rate of US Funds and the refinance rate of ECB.

German economical data is the most important in the Euro zone, as Germany is the EU’s largest economy. The most influential data is the gross domestic product, unemployment, industrial production, inflation, etc. Also one of the most important indicators in Germany is the Business activity – an overview of IFO. Other non-European countries may also affect the price changes of the EUR/USD currency pair. Strong trends of EUR/CHF and EUR/JPY may course the volatility for EUR/USD. For example EUR/USD may go down in the background of strong positive news from Japan which first results the decrease in a rate of EUR/JPY.

There is a strong correlation between EUR/USD and USD/CHF that consists in some similarities between the Swiss Franc and the Euro. The reason is very simple, as the Swiss economy is heavily dependent on the economy of EU. The reduction of EUR/CHF rate often predicts or accompanies the reduction of EUR/USD. As any other currency pair, EUR/USD responds to political instability, such as coming to power a coalition government in Germany, Italy or France. Political or financial turmoil in Russia also have a negative impact on EUR/USD as the German business has made significant investment in the Russian economy.

Watching the behavior of EUR/USD you can find out many more factors that may influence this currency pair. The main ones mentioned in this article can be found in the Economical Calendar that will show you the date, importance and the result of any economical or political announcement for the major world currencies. Fundamental analysis is a great way to plan your Forex trading for EUR/USD and other currency pairs whether you are located in Singapore or any other country in the world.

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A Role Of Big Capitals In Forex Market

Posted by admin on September 4, 2010
Sep 042010
 

It is not a secret that in Forex Market both profit value and the ability to influence the price movements depend on the size of a capital. Banks have the biggest influence on the market as they operate with the largest amounts and can deliberately change the price of the currency in order to support the macro economy of a country or just make a good profit. An average online trader, even with a relatively solid capital cannot move the market to the certain course. Even the biggest players in Forex are not able to take a full control of the price movements. A fierce fighting breaks out on the Asian markets for such currencies as USD/JPY, EUR/JPY. On the one hand many Singapore Forex traders use this phenomenon in order to increase their investments, but on the other hand it is a very risky game and strategy. The fact is that technical analysis of Forex market cannot predict news and financial events which for a short time can change the price for 100 pips and lead to the opposite trend. Moreover, technical analysis cannot predict interference of big players in Forex trading.

At certain times of a day Foreign Exchange market becomes very calm and even freezes because of the breaks in the main trading centers in the world. When trading starts in USA it is the most active and unpredictable time in the market in terms of technical analysis. When staying in the market alone, US banks can urge big price movements of up to 1000 pips. They try to push the price to the levels of massive stop-losses of the traders who traded in the opposite direction. If they succeed, the total closure of the positions dramatically changes the direction of the price. This process brings huge profits in a short period of time. If you study the market, you can notice these tricks and may use them for increasing of your own capital. But at the same time every trader must be very careful when trading during these hours as it is very risky and may course high losses.

The international financial markets attract a focused attention of the entire world and each piece of news brings its own corrections in currencies’ rates on the Forex market. Experienced Forex traders know the presidents of the major banks by their names because any word from their speech may cause big fluctuations of a price. We cannot ignore the fundamental analysis of Forex market. Today any trading platform provides the traders with a news strip of the most recent financial news. And on the website of every Singapore broker you can find a financial calendar which indicates the time of the main news releases. You can build a trading strategy based on the news or simply close a trading position before the release of the most important of them. In any case, every online trader must take into his consideration such factors as time of trading, news and noise of the market.

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Why Gold Is The Most Reliable Currency In The World

Posted by admin on August 20, 2010
Aug 202010
 

Gold is one of the most traded commodities in the world along with Silver and Oil. Let us look a bit into the history and the essence of gold’s importance for the world economy.
Looking at the prices on gold during the last years you can see that they are changing all the time. Though it is not the price of gold that is changing, it is the price of money against gold moves up and down. Virtually the gold price remains stable for many centuries though the quantity of money you need to buy gold changes from time to time.

The reason why mankind has chosen gold is very simple. First of all gold is a tough material that cannot be damaged by corrosion and may preserve its qualities eternally. The second factor is in the nature of gold – it is rare and difficult to find.

Historically it started a long time ago when gold was used as money. The money was made of gold and other precious metals like silver. But it was a time of completely different money and economy. With the development of civilization, the world’s economy and money has changed too, though the gold value still stayed the same.

You may ask why there are so many cases of countries’ bankruptcy, inflation and economical crisis if the quantity of existing money is equal to the gold. The reason is that the world economists wish to raise the value of the money and the ways they used to do so cause all kinds of economical disasters where common people suffer. Instead of stabilizing the economic situation of the country by increasing the gold stocks, economists choose the path of inflation releasing more money. As a result all becomes expensive and people don’t have enough money to buy things. Money depreciates more and more and all this leads to poverty and chaos.

Currently there is so much money in the world, that it is impossible to equate it to the rate of gold, because it would increase the price of gold in a million times. For that reason such actions as inflation is necessary to do in order to keep the stability of the world economy.

The appearance of electronic money changed the situation. Banks have a lot of virtual accounts that are not secured by any gold reserve. So we can say that the present price of gold has being deliberately significantly diminished.

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