Key Overnight Developments
• North Korea Tests Nuclear Weapon, South Korea Reports
• Japan’s All Industry Activity Index Fell in March
Euro traders saw the the currency gap upward 14 pips against the Dollar to reach a high of 1.4044 before pressure forced the pair down to levels last seen during the second half of Friday’s session. Sterling exhibited similar characteristics despite lacking a gap. Both pairs ultimately established downward trends in the early hours of this week’s trading session.
Asia Session Highlights
Geopolitical tension may have rocked markets in Japan after South Korea’s office of the president reported that North Korea had tested a nuclear weapon. The U.S. Geological Survey reported a 4.7 magnitude earthquake 230 miles north-east of Pyongyang, the North Korean capital. Intraday Japanese stock trading saw the Nikkei fall from a high of 9402.76 to a low of 9331.74 in the 30 minutes following the release of the news.
Japan’s All Industry Activity Index fell 2.4% in March. The figure, which has declined on all but one occasion dating back to October, might not necessarily be indicative of the current economic environment in Japan because of the three month lag between the month’s empirics and its release. In fact, the previous week saw an analyst at Merrill Lynch upgrade the share price outlook for IHI Corp., Japan’s second-largest manufacturer of heavy-machinery, to “buy” from “underperform,” citing an increased demand for such equipment from emerging markets. If such a prediction comes into fruition the Asian country may benefit from a boost in its export sector, which has been battered over the year as a result of dying demand for electronics and vehicles from abroad.
Euro Session: What to Expect
A series of German sentiment survey’s will be released tomorrow. The IFO Business Climate survey is expected to increase for a second consecutive month after having fallen eight of nine sessions prior. A move upward here would be a sign of relaxed pessimism coming off of a stock market rally which saw global equities erase losses seen in the first two months of the year. Because business and investor sentiment generally lead the real economy by at least nine-twelve months, the IFO surveys are seen as a key point of interest for those looking to estimate prospects for growth.
As the largest economy in the Euro-Zone, Germany’s outlook is of utmost importance for the region. With nearly a quarter of all Euro-Zone external exports coming from Germany, the world’s third largest economy, improving sentiment among German business managers may provide foreigners a larger sentiment to invest in the European economy.
Written by Ilya Spivak, Currency Analyst
Article Source - Sentiment May Save Europe as Business Managers Foresee Better Times (Euro Open)
What is Forex?
The foreign exchange market (Currency, Forex, or FX) is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. Forex transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market that we see today started evolving during the 1970s when world over countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system till 1971.
Today, the Forex market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements. Since then, the market has continued to grow. According to Euromoney's annual Forex Poll, volumes grew a further 41% between 2007 and 2008.
Forex used to be a closed market because only the “big boys” because you needed between 10 and 50 million $ to open an account. But today, with the development of internet, online Forex brokers have the possibility to offer their services to “little” traders. All you need to start is a computer, fast internet connection and information which you can find on this page also.
This enormous market is like the dangerous sea where you can meet lots of sharks and dangerous waters but at the same time it is the only one where two weeks of trading can hypothetically bring you $1,000,000 out of $1,000 of initial investment.
This is certainly hypothetically because a lot of newbie traders deal with their trades as gambling, that surely bring them to having nothing in the end. You should always keep the phrase "be careful!" in your mind. This market would give you its profit possibilities only if you learn the basic things hard and make lots of demo trading.
The statistics is that as much as 95% of traders come to losing their money at Forex, 5% have profit and less than 1% of traders make large fortune at Forex. You shouldn't produce, sell or advertise anything trading at Forex. Your assets are your knowledge, experience and a small amount of cash.
This market is a platform for banks, transnational corporations and individual traders to change the currencies they possess into other ones. This is the spot Forex market. At this market you can trade with up to 1:400 leverage which means that you'll get $400 on your account for each dollar invested. So, you can trade with the $400,000 sum having invested $1,000 onto your account.
Why to trade on Forex?
1. There is no commission fee for trading at Forex.
2. There is no intermediary, you can trade directly at Forex.
3. Forex is open 24-hours a day.
4. Nobody can influence the market for a longer period.
5. High liquidity.
6. Free demo accounts, analysis and charts.
7. Small accounts that allow everyone to try out his luck.
Hope this has answered a lot of questions you were asking yourself about Forex and that you can now start trading. Also make sure that you check out other articles on this blog which can help you earn your fortune.
Good luck to everyone!