Forex Trading NewsIs It Time To Buy Sterling/Dollar?
It has been a long time since a bullish Sterling position (versus the US Dollar) could be contemplated, but we may be nearing that point. As the chart below shows, we are nearing the (COVID) lows of March 2020, with the $1.1412 low point now within reach. All the talk is of economic crisis as […]Euro Hits 20-year Low Against US Dollar
This week, the euro traded at $0.99 against the US dollar. The euro reached this milestone after losing 0.7 percent of its value in a single day. This is the euro’s poorest performance against the dollar since 2002. The currency has now shed off 12 percent of its value against the dollar in 2022 alone. […]When Will the US Run Out of Money? (And Impacts on Markets)
Can the US or any country run out of money? Technically, the government doesn’t have money. A government is just a collection of individuals. Everything in an economy comes down to productivity. Governments collect tax revenue from what boils down to underlying productivity at the most fundamental level. It can use a combination of those […]EUR/USD Outlook: The Euro Slides Amidst Strengthening Dollar
The Euro has fallen to 0.9951, representing a 0.9% decline, and bringing Europe’s currency to its lowest trading levels in two decades. The region is tackling mounting economic pressures, with the Russia-Ukraine conflict sending the price of energy and food soaring, while extreme droughts are adding to the headwinds. EUR/USD Testing Parity Last month the […]What Will Happen to the Ruble?
Russia’s invasion of Ukraine and sanctions imposed by NATO countries and western allies put the Russian ruble (RUB) into a tailspin against virtually all other emerging market currencies. The sanctions guarantee that Russia will have bad inflation problems. Tightening monetary policy can help take some of the air out of inflationary pressure, with the trade-off […]The Complete Guide to the Inverted Yield Curve
An inverted yield curve is an interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the same credit quality. This is considered a negative yield curve, because it is “inverted” from the typical yield curve relationship, in which longer-term rates are higher than shorter-term rates. What Happens […]Currency Valuation Models: How Are Exchange Rates Determined?
Different traders have different ways of determining a currency’s fair value price. Clearly, different expectations and different motivations are what make a market. While many traders have their own decision rules and proprietary systems, there are currency valuation models and ways of looking at the currency markets that are the most common. We’ll cover the […]What Is A Currency Defense?
A currency defense is an economic policy implemented by a government in order to protect its currency’s value from speculators in the foreign exchange market. A currency defense can take many different forms, but typically involves intervention in the foreign exchange market to buy or sell the currency in order to keep its value within […]Asset allocation vs. Diversification – Exploring the Difference
Asset allocation and diversification might be related concepts in finance, trading, and investing, but there are slightly different. Asset allocation refers to the process of dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash. The asset allocation process takes into account the investor’s goals, risk tolerance, and investment horizon. Diversification […]How Would a US Dollar Devaluation Affect Assets?
A US dollar devaluation would have an impact on movements in other asset classes. Currency volatility was among the lowest it ever was pre-Covid with central banks necessarily supportive of markets, helping to dampen volatility. But it picked up with more inflation risk in 2022. Post-2008, we’ve mostly been in a low […]Older Posts