Gain Capital’s Forex.com sponsors the Middle East Trading Expo and Conference 2011
Apr 3rd
Gain Capital, a global provider of online trading services, is pleased to announce that they are the exclusive Diamond sponsor of the Middle East Trading Expo & Conference at the Jumeirah Emirates Towers Hotel in Dubai on 8 – 9 April 2011.
About Gain Capital
Gain Capital Holdings, Inc. (NYSE:GCAP) is a global provider of online trading services. Gain’s innovative trading technology provides market access and highly automated trade execution services across multiple asset classes, including foreign exchange (forex or FX), contracts for difference (CFDs) and exchange-based products, to a diverse client base of retail and institutional investors.
A pioneer in online forex trading, Gain Capital operates FOREX.com(R), one of the largest and best-known brands in the retail forex industry. Gain’s other businesses include Gain GTX, a fully independent FX ECN for hedge funds and institutions, and Gain Securities, Inc. (member FINRA/SIPC) a licensed U.S. broker-dealer.
With offices in New York City; Bedminster, New Jersey; London; Sydney; Hong Kong; Tokyo and Seoul, Gain Capital and its affiliates are regulated by the Commodity Futures Trading Commission (CFTC), the National Futures Association (NFA) and the Securities and Exchange Commission (SEC) in the United States, the Financial Services Authority (FSA) in the United Kingdom, the Financial Services Agency (FSA) in Japan, the Securities and Futures Commission (SFC) in Hong Kong, and the Australian Securities and Investments Commission (ASIC) in Australia.
Press enquiries to:
Rachel McArthur
+971 50 667 5267
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From www.americanchronicle.com
Return on forex reserves skids to 2%, net gain negative: RBI
Apr 3rd
MUMBAI: Even as domestic interest and inflation rates shot through the roof, USD 303-billion plus (Rs 13.63 trillion) forex reserves fetched a measly 2.09 per cent return for the year ended June 2010, which if adjusted against inflation at 8.31 per cent, is a negative return on the asset.
This has happened so because the Reserve Bank has chosen to invest those monies in foreign markets/assets and not in the domestic market/assets. However, it has to be noted that, RBI could not have done otherwise under the prevailing rules governing the foreign exchange reserves management.
“The rate of earnings on foreign currency assets (FCAs) and gold, after accounting for depreciation, decreased from 4.16 per cent in July 2008 to June 2009, to 2.09 per cent in July 2009 to June 2010, reflecting the generally low global interest rate environment,” RBI’s half-yearly report on management of forex reserves released last week said.
Accordingly, RBI could get only an interest yield of a paltry Rs 27,000 crore from this 2.09 per cent interest rate – which is even way below the return rate on savings accounts – on this mound of cash. However, had the central bank chosen to deploy these funds in the country, it would have fetched as much as 4.5 times more return at whopping Rs 1,21,900 crore at the prevailing interest rates.
Contrast this with the current interest rate in the country, which had been spiked as many as eight times since March 2010 and the adjust this with the current inflation of 8.31 per cent. A 390-day term deposit gets you as much as 9 per cent or more return today and even saving bank rates offer a higher return of a full 3.50 per cent.
From economictimes.indiatimes.com
Revised tax on currency conversion would affect Indian exports
Apr 3rd
NEW DELHI: Industry chamber Assocham today said the government’s decision to revise taxes on currency conversion would increase transaction cost and hit the country’s exports.
“This charge, on the differential between RBI reference rate and the rate at which transaction is booked, will significantly increase transaction costs and decrease India’s competitiveness in global markets,” the apex chamber said.
The government has revised the policy, after Finance Minister Pranab Mukherjee proposed to introduce new methods to calculate service tax on forex transactions, in his Budget speech.
As of now the tax will be charged on one per cent of the difference between buying/selling rate and the Reserve Bank of India’s reference rate for the day multiplied by total units of the currency. The apex bank publishes market rates every noon to act as a reference rate.
Disagreeing with the criteria, it said, taxing on the differential has no connection with the services provided by a bank.
It said the levy would be as good as imposing service tax on the profit or loss made by the money changers than on the services provided by the bank.
As per the revision, the tax for foreign exchange transactions will be calculated “at the rate of 0.1 per cent of the gross amount of currency exchanged for an amount up to Rs 1,00,000, subject to the minimum amount of Rs 25″.
For transactions between Rs 1 and Rs 10 lakh, the tax rate will be Rs 100, plus 0.05 per cent of the gross amount of currency exchanged.
For transactions over Rs 10 lakh, the rate of service tax to be levied has been fixed at Rs 550 plus 0.01 per cent of the gross amount of currency exchanged.
However, the maximum amount of service tax paid has been capped at Rs 5,000.
From economictimes.indiatimes.com
So, How High Can The Euro Go?
Apr 3rd
The euro staged a remarkable rally today after dipping as low as 1.4060 following the U.S. non-farm payrolls release. The resilience of the single currency is incredibly impressive considering that Standard & Poor’s downgraded Ireland’s sovereign debt rating and Fitch warned about the possibility of their own downgrade in the near future. Both rating agencies currently have Ireland at the same level but a downgrade by Fitch would move Irish debt one step closer to junk.
However none of these rating actions have deterred forex traders from buying euros in anticipation of the first rate change in nearly two years. At the last monetary policy meeting in March, ECB President Trichet said interest rates could be increased as early as April. Since then, the central bank’s message has been very consistent with a number of ECB officials reiterating the need for tighter monetary policy. In contrast, the Federal Reserve is still debating whether QE2 should be cut short. Although many members of the Federal Reserve have grown more optimistic, there are also a number of Fed officials who believe that caution is warranted.
As a result, the best that we can expect from the Fed won’t nearly be as hawkish as the least that we can expect from the ECB. The better than expected U.S. non-farm payrolls report on Friday helped to lift the dollar against the euro but we believe that the EUR/USD could make a run for fresh year to date highs ahead of the ECB’s rate announcement on Thursday. The direction of interest rates is one of the most important drivers of currencies and investors usually prefer to invest in currencies where the interest rate is high and growing and the euro certainly fits the bill. Aside from the ECB rate decision, Eurozone retail sales, German factory orders, industrial production and the trade balance are also scheduled for release. Baring any major downside surprises, the euro should be on its way to a new year to date high. After the rate decision however, the euro could weaken if a classic buy the rumor, sell the news dynamic takes hold.
This chart shows how rate hike expectations have changed in recent weeks:
In terms of how high the EUR/USD can rise, there is a VERY good chance that the currency pair will make a run for its Nov high of 1.4282. If this level is broken, then it could be clear sailing to 1.45
From wallstreetpit.com
Forex – EUR/USD Price Levels At A Crossroad
Apr 3rd
Forex – EUR/USD Price Levels At A Crossroad By: ForexTV on April 2 11 7:05 EDT
ForexTV.com (New York) – by Timothy Kelly
Forex traders will be listening closely to ECB President Jean-Claude Trichet on Thursday, especially during the increasingly important Q & A session following the prepared statements. It is very widely expected that the ECB will elect to increase interest rates by a quarter of a point this week. What remains to be learned is weather the increase will be the beginning of a tightening cycle for the ECB. The answer (if not, clues to the answer) as traders are beginning to understand, may come during the Q&A session.
Included in the mandate of the ECB to maintain price stability is the responsibility to publicly communicate policies to members. (ECB Mandate pdf) Keep in mind the language used by Trichet hinting of the rate increase during last month’s Q & A session was only elicited by a reporter’s question, and even then there was only a hint and not an explicit declaration of a rate hike.
That brings us to the question of the EUR/USD price level. As G-7 nations now set their focus on monetary and interest rate normalizaion, interest rate anticipation and risk have taken center stage as the catalysts for currency price levels. The more traditional correlations between financial asset classes are becoming stronger and more predictable as policy stabilization becomes a priority.
This weekend I read two opposing views between the policies of the FOMC and the ECB. On the one hand Kathy Lien wrote an article speaking of the diverging policies between the two Central Banks. Lien stated …the best that we can expect from the Fed won’t nearly be as hawkish as the least that we can expect from the ECB (see full Article). Compare that to the viewpoit of Peter Rosenstreich “…the message that we take from Kocherlakota and Lacker earlier in the week is that Fed opinion is clearly starting to shift away from complete loyalty to ultra-loose monetary policy.” (see full article)
Lien speculates that the EUR/USD is headed higher likely she says to the 1.45 range, while Rosenstreich offers a less committed stance on the pair’s next direction. This dichotomy of opinions clearly illustrates the uncertainty of the pair at the current levels.
Forex research provided by ForexTV.com
From www.forextv.com
Forex – Survey: Small Businesses add Jobs for Second Consecutive Month
Apr 2nd
Forex – Survey: Small Businesses add Jobs for Second Consecutive Month By: Calculated Risk on April 2 11 4:56 EDT The National Federation of Independent Business (NFIB) will release their March survey on Tuesday, but here is a pre-release of the employment data … from NFIB: NFIB Jobs Statement: Main Street Adds Jobs for Second Consecutive Month
“The positive job creation observed in February was repeated again in March (sigh of relief here), confirming that the number of net new jobs reported on Main Street was decidedly positive. Employment gains have not been this good since 2007.
“The percent of owners reporting hard to fill job openings was unchanged at 15 percent, supporting the modest reductions in the unemployment rate recently observed. Unfortunately, the net percent of owners planning to create new jobs (increasing the total number of workers employed) lost three points, falling to a net 2 percent of all firms, low, but still 12 points better than the recession low reading of negative 10 percent reached in March 2009. 
Click on graph for larger image in graph gallery.
This graph shows the net hiring plans for the next three months.
Hiring plans decreased in March, but are still positive.
Small businesses have a larger percentage of real estate and retail related companies than the overall economy. With the high percentage of real estate (including small construction companies), I expect small business hiring to be slow to recover in this cycle.
Earlier:
• Summary for Week ending April 1st
From www.forextv.com
Forex – Summary for Week ending April 1st
Apr 2nd
Forex – Summary for Week ending April 1st By: Calculated Risk on April 2 11 11:42 EDT The BLS reported that payroll employment increased 216,000 in March and that the unemployment rate declined to 8.8%. If we average the first three months of 2011, there were 160,000 payroll jobs added per month. That is enough to keep up with the growth in the labor force, but to only reduce the unemployment rate slowly. Private payrolls were a little better with an average of 188,000 per month, as state and local governments continued to lay off workers (something we expect all year).
The decline in the unemployment rate from 8.9% to 8.8% was good news, especially since the participation rate was unchanged at 64.2%. Unfortunately the number of long term unemployed increased, as did the number of part time workers for economic reasons.
More disappointing news was that the average workweek declined slightly to 34.1 hours, and average hourly earnings was flat.
The March employment report was another small step in the right direction, but the overall employment situation remains grim: There are 7.25 million fewer payroll jobs now than before the recession started in 2007 with 13.5 million Americans currently unemployed. Another 8.4 million are working part time for economic reasons, and about 4 million more workers have left the labor force. Of those unemployed, 6.1 million have been unemployed for six months or more.
Most of the other stories remained the same – growth in manufacturing activity continues to be strong, and house prices declined further in January.
A key piece of disappointing news was the sluggish increase in real Personal Consumption Expenditures (PCE) in February. This suggests real PCE growth of only 1.4% in Q1, and has prompted several analysts to downgrade Q1 GDP growth.
Below is a summary of economic data last week mostly in graphs:
• March Employment Report: 216,000 Jobs, 8.8% Unemployment Rate
The first graph shows the employment population ratio, the participation rate, and the unemployment rate.
Click on graphs for larger image in graph gallery.
The unemployment rate decreased to 8.8% (red line).
The Labor Force Participation Rate was unchanged at 64.2% in March (blue line). This is the lowest level since the early ’80s. This is the percentage of the working age population in the labor force. The participation rate is well below the 66% to 67% rate that was normal over the last 20 years, although some of the decline is due to the aging population.
The Employment-Population ratio was increased slightly to 58.5% in March (black line).
The second graph shows the job losses from the start of the employment recession, in percentage terms aligned at maximum job losses. The dotted line is ex-Census hiring.
The current employment recession is by far the worst recession since WWII in percentage terms, and 2nd worst in terms of the unemployment rate (only the early ’80s recession with a peak of 10.8 percent was worse).
The third graph shows the job losses from the start of the employment recession, in percentage terms – this time aligned at the start of the recession.
Here are the employment posts yesterday with graphs:
March Employment Report: 216,000 Jobs, 8.8% Unemployment Rate
Employment Summary and Part Time Workers, Unemployed over 26 Weeks
Employment Graph Gallery
• Case Shiller: Home Prices Off to a Dismal Start in 2011
This graph shows the nominal seasonally adjusted Composite 10 and Composite 20 indices (the Composite 20 was started in January 2000).
The Composite 10 index is off 31.4% from the peak, and down 0.2% in January (SA) (really a three month average of November, December and January). The Composite 10 is still 2.2% above the May 2009 post-bubble bottom.
The Composite 20 index is also off 31.3% from the peak, and down 0.2% in January (SA). The Composite 20 is only 0.7% above the May 2009 post-bubble bottom and will probably be at a new post-bubble low soon.
The next graph shows the price declines from the peak for each city included in S&P/Case-Shiller indices.
Prices in Las Vegas are off 58% from the peak, and prices in Dallas only off 7.3% from the peak.
From S&P (NSA):
Continuing the trend set late last year, we witnessed 11 MSAs posting new index level lows in January 2011, from their 2006/2007 peaks. These cities are Atlanta, Charlotte, Chicago, Detroit, Las Vegas, Miami, New York, Phoenix, Portland (OR), Seattle and Tampa. These same 11 cities had posted lows with December’s report, as well. Both composite indices are still slightly above the post-bubble low (SA), but the indexes will probably be at new lows in early 2011.
• Personal Income and Outlays Report for Feburary
The following graph shows real Personal Consumption Expenditures (PCE) through February (2005 dollars).
Personal income growth was slightly below expectations. Note: Core PCE – PCE excluding food and energy – increased 0.2 percent in February.
Even though PCE growth was at expectations, real PCE was low – and this suggests analysts will downgrade their forecasts for Q1 GDP. Using the two month estimate for PCE growth (averaging the growth of January and February over the first two months of the previous quarter) suggests PCE growth of around 1.4% in Q1 (down sharply from 4.0% in Q4).
• ISM Manufacturing Index increases in March
PMI at 61.2%, slightly above expectations.
From ISM: Economic activity in the manufacturing sector expanded in March for the 20th consecutive month … The recent trend of rapid growth in the manufacturing sector continued in March, as the PMI registered above 60 percent for the third consecutive month. The component indexes of the PMI remain at very positive levels and signal strong sector performance in the first quarter. While manufacturers are benefiting from strength in new orders and production, there is significant concern with regard to commodity prices. Many manufacturers indicate the prices they have to pay for inputs are rising, and there is concern about the impact of higher prices on their margins.” [said Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee]
• U.S. Light Vehicle Sales 13.1 million SAAR in March
This graph shows light vehicle sales since the BEA started keeping data in 1967.
Note: dashed line is current estimated sales rate. The current sales rate is finally off the bottom of the ’90/’91 recession – and there were fewer registered drivers and a smaller population back then.
This was slightly below the consensus estimate of 13.2 million SAAR, possibly because of rising oil prices. I don’t think the Japanese supply disruptions had any impact on sales.
• CoreLogic: Shadow Inventory Declines Slightly
From CoreLogic “the current residential shadow inventory as of January 2011 declined to 1.8 million units, representing a nine months’ supply. This is down slightly from 2.0 million units, also a nine months’ supply, from a year ago.”
This graph from CoreLogic shows the breakdown of “shadow inventory” by category. For this report, CoreLogic estimates the number of 90+ day delinquencies, foreclosures and REOs not currently listed for sale. Obviously if a house is listed for sale, it is already included in the “visible supply” and cannot be counted as shadow inventory.
This report provides a couple of key numbers: 1) there are 1.8 million homes seriously delinquent, in the foreclosure process or REO that are not currently listed for sale, and 2) there are about 2 million current negative equity loans that are more than 50 percent “upside down”.
• Other Economic Stories …
• Restaurant Performance Index increases in February
• Kansas City Manufacturing Survey at Record High, Chicago PMI Strong in March
• ADP: Private Employment increased by 201,000 in March
• From the Dallas Fed: Texas Manufacturing Activity Strengthens Further
• From the NAR: February Pending Home Sales Rise
• Unofficial Problem Bank List at 985 Institutions, Correction for Capitol Bancorp
Best wishes to all!
From www.forextv.com
What I See in FX Market
Apr 2nd
Legal disclaimer and risk disclosure
ProAct Traders™ (hereafter, PAT) assumes no responsibility for errors, inaccuracies, or omissions, nor does it warrant the accuracy or completeness of the information in the materials that comprised the text, graphics or other items contained in the ProAct Charts as a result of computer or power failures or interruptions in the electronic delivery systems via the Internet. PAT shall not be liable for any special, indirect, incidental or consequential damages including without limitation losses, lost revenue, or lost profits that may result from these materials.
Foreign Currency Trading carries a level of risk / reward that may not be suitable for all considering participation in the market known as Forex. The Forex is a “zero sum” market and its end effect is that there are an equal number of winners and losers. Consequently, the possibility exists that you could sustain an eventual loss of some or all of you initial investment. Therefore, you should never invest money that you cannot afford to lose. Before deciding to trade the Forex, you should become thoroughly educated in how the market works, have a sound money management plan and then carefully consider your investment objectives, level of experience, and risk appetite. If you have any doubts, seek advice from an independent financial advisor.
From www.fxstreet.com
Special Focus: GBPJPY (Week Ahead)
Apr 2nd
Special Focus: GBPJPY (Week Ahead)
Saturday, April 02, 2011
by Mohammed Isah of FXTechstrategy.com
Recent articles from this author
- Special Focus: GBPJPY (Week Ahead) – Saturday, April 02, 2011
- Daily Technical Strategist: USDJPY – Friday, April 01, 2011
- Daily Technical Strategist: EURUSD – Thursday, March 31, 2011
- Commodity Technical Outlook: CRUDE OIL – Wednesday, March 30, 2011
- Special Focus: GBPUSD – Wednesday, March 30, 2011
About the author
Mohammed Isah is a Technical Strategist and head of research at FXTechstrategy.com, a technical research website. He has been trading and analyzing the foreign exchange market for the past 7 years.
He formerly traded stocks before crossing over to the forex market where he worked for FXInstructor LLC as a technical analyst and head of research before Joining FXTechstrategy.com. Mohammed has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, and The International Business Times etc.
At FXTechstrategy.com he writes daily and weekly technical commentaries on currencies and commodities which are offered to its clients. He provides full coverage of the forex market with specific daily focus on 7 currencies (EURUSD, GBPUSD, USDJPY, EURGBP, EURJPY, AUDUSD and USDCAD) and the Dollar Index utilizing various technical tools and strategies. He also covers the commodities market twice in a week focusing on in-depth technical developments in GOLD, CRUDE OIL, SILVER, CORN, WHEAT and CRB Index.
Mohammed can be reached via email at m.isah@fxtechstrategy.com.
From www.insidefutures.com
Forex – COMMENTARY: ECN Trading and xTrader
Apr 2nd
Posted by admin in General
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Forex – COMMENTARY: ECN Trading and xTrader By: ForexTV on April 2 11 1:33 EDT The Future Of Forex Trading Is Dependant On New Innovation
Product review: xTrader ECN Platform
by Timothy Kelly
I have been a financial markets data and trading professional for over nineteen years, beginning my career with Bloomberg Financial Markets. When it comes to technology I feel that I have “seen it all”. As part of the team that built the first live, streaming, commercial Level-II Nasdaq display for online equity trading in the retail space, I do appreciate the value of technology. One of the things that I have learned about the application of technology in trading platforms is that if you see or sense the technology, it probably is not that great. True advancements in trading technology should not be visible to the user, traders have enough to think about and technology is not something you want to be worried about as a trader. A true innovation in trading technology should draw a user into the full suite of applications intuitively and quickly and not leave the trader thinking that there may be a myriad of hidden levels like some arcane video game.
One of the things that strike me as truly innovative is the functionality and form factor of the IPhone and IPad applications. Using mobile trading applications on these devices just seems better suited and intuitive to trading. The touch-screen logic and extensibility of the applications just flows much easier in my opinion.
Not long ago I was presented with a new trading Platform called xTrader. Like so many platforms that I have been asked to review, its owners were sure that it was the next “MetaTrader-killer”. Honestly, MetaTrader is not what I would call the greatest platform available, but it is the most popular. I was less than enthusiastic about reviewing the xTrader because I have never written a review of a forex trading platform before. That is until now.
What I found in xTrader was a completely intuitive and extensible experience. But what grabbed my attention was that xTrader is and Electronic Communication Network (ECN) model. To those of you who have no experience with ECN’s, it simply means that there are many participants buying and selling, instead of you vs. your broker. Many have tried this model and in my opinion failed because technology got in the way instead of making a complex operational task of a Forex ECN seems very orderly and simple. xTrader is a pleasure to work with and allows traders to effortlessly see such a wider perspective of the marketplace in one glance. (Below is a visual representation of the Forex ECN process provided by xTrader)
The product has all of the usual tools and features trader have come to expect in a trading platform, but what immediately drew me in was the extensibility of the applications and the ease with which I could move around the application without any instructions or training at all. For the uninitiated, the Level II –type display may be a bit difficult to understand at first, but what it tells you about market depth and participation in invaluable.
xTrader is a serious competitor to MetaTrader. The product combines a superior liquidity proposition versus single-counterparty trading and a truly innovative platform design. However, xTrader is available through brokers and not to the end-user just yet. Like MT4, xTrader is designed for brokers to use to offer their clients. I appreciate what MetaTrader has done for the Forex community, but competition is necessary and good for the trader! I am hoping to see xTrader being adopted by the brokerage community soon.
Company information: www.xtrader.com
From www.forextv.com