The Canadian dollar

The Canadian dollar is poised to test a 4 1/2-year low in a reversal of the rally That Brought it to its highest level in a month , According to Royal Bank of Canada , citing technical factors.

 

If the loonie ends today weaker than yesterday’s closing of C $ 1.0953 per U.S. dollar , it would form a ” bullish key reversal day ” that signals the end of the currency ‘s recent run of strength , George Davis , chief technical analyst at RBC Capital Markets, wrote in a note to clients. The next key level is C $ 1.1033 .

” A daily close Above This level would amplify the oversold nature of the daily studies , exposing the high at $ C1.1223 once again , ” Davis wrote , citing the Jan. 31 Reached level That was the weakest since July 2009 . ” A close above yesterday’s high at C $ 1.0976 would be an even more powerful signal . “

The loonie, as the currency is Known for the image of the aquatic bird on the C $ 1 coin , depreciated 0.8 percent to C $ 1.1037 per U.S. dollar at 11:20 am in Toronto. It earlier advanced to C $ 1.0911 , the strongest level since Jan. 16. One loonie buys 90.60 U.S. cents.

Canada ‘s currency has Strengthened 0.7 percent versus the greenback This Month after dropping 4.5 percent in January, its biggest loss for the first month of the year in at Least 42 years .

Forex trading is all about putting your money into other currencies, so you can gain the interest for the night, for time period or the difference in trading money all around. Forex trading does involve other assets along with money, but because you are investing in other countries and in other businesses that are dealing in other currencies the basis for the money you make or lose will be based on the trading of money.

Constant trading is done in the forex markets as time zones will vary and the markets will open in one country while another is near closing. What happens in one market will have an effect on the other countries forex markets, but it is not always bad or good, sometimes the margins of trading are near each other.

A forex market will be present when two countries are involved in trading, and when money is traded for goods, services or a combination of these things. Currency is the money that trades hands, from one to another. Often times, a bank is going to be the source of forex trading, as millions of dollars are traded daily. There is nearly two trillion dollars traded daily on the forex market. Should you get involved in forex trading? If you are already involved in the stock market, you have some idea of what forex trading really is all about.

The stock market involves buying shares of a company, and you watch how that company does, waiting for a bigger return. In the forex markets, you are purchasing items or products, or goods, and you are paying money for them. As you do this, you are gaining or losing as the currency exchange differs daily from country to country. To better prepare you for the forex markets you can learn about trading and purchasing online using free ‘game’ like software.

You will log on and create an account. Entering information about what you are interested in and what you want to do. The ‘game’ will allow you to make purchases and trades, involving different currencies, so you can then see first hand what a gain or loss will be like. As you continue on with this fake account you will see first hand how to make decisions based on what you know, which means you will have to read about the market changes or you will have to take a brokers information at value and play from there.

If you, as an individual want to be involved in forex trading, you must get involved through broker, or a financial institution. Individuals are also known as spectators, even if you are investing money because the amount of money you are investing is minimal compared to the millions of dollars that are invested by governments and by banks at any given time. This does not mean you can’t get involved. Your broker or investment advisor will be able to tell you more about how you can be involved in forex trading. In the US, there are many regulations and laws in regards to who can handle forex trading for US citizens so if you are searching the internet for a broker, be sure you read the print, and the information about where the company is located and if it is legal for you to do business with that company.

Dollar steady in holiday thinned trade

The dollar was little changed against the other major currencies in holiday thinned trade on Monday, as recent soft U.S. economic data fuelled concerns over the outlook for the economic recovery.

Dollar little changed in thin trade

USD/JPY edged up 0.09% to 101.92, pulling back from lows of 101.39, the weakest since February 6.
The dollar remained under pressure after data on Friday showing that U.S. factory output fell unexpectedly in January clouded the outlook for the economic recovery. The data prompted some investors to wonder whether the Federal Reserve will slow the pace of reductions to its asset-buying stimulus program.
Trade volumes were expected to remain thin on Monday, with U.S. markets shut for the President’s Day holiday.
The safe haven yen touched session highs earlier after official data on Monday showed that Japan’s gross domestic product expanded 0.3% in the final three months of 2013 and grew 1.0% on a year-over-year basis.
Market expectations had been for quarterly growth of 0.7% and an annual increase of 2.8%.
EUR/USD touched highs of 1.3724, the strongest since January 24 and was last up 0.08% to 1.3704.
Demand for the euro continued to be underpinned as Friday’s better-than-expected euro zone fourth quarter growth data eased concerns that the European Central Bank could tighten monetary policy at its next meeting.
Also supporting the euro, ECB governing council member Ewald Nowotny said Monday the banks bond buying program is “not that relevant” anymore, because of the improved economic situation.
Elsewhere, the pound eased back from four-year highs against the dollar, with GBP/USD slipping 0.12% to 1.6728. The pair rose to highs of 1.6823 earlier, the strongest level since November 2009.
Demand for sterling continued to be underpinned after the Bank of England revised up its forecast for growth in 2014 in last week’s quarterly inflation report, and indicated that it may raise rates as soon as next year.
The dollar slid against the Swiss franc, with USD/CHF edging down 0.13% to 0.8916.
The Australian dollar slipped lower, with AUD/USD dipping 0.09% to 0.9026, while NZD/USD was down 0.14% to 0.8356.
In New Zealand, data on Monday showed that retail sales rose 0.7% in the final three months of 2013 and were up 1.2% from a year earlier. Market expectations had been for a quarterly gain of 1.2% and an annual increase of 1.6%.
The U.S. dollar was lower against the Canadian dollar, with USD/CAD edging down 0.09% to 1.0968.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.01% to 80.16.

Gold futures fall from 3-month high ahead of U.S. retail sales data

Gold prices retreated from the previous session’s three-month high on Thursday, as investors looked ahead to key U.S. economic data later in the day for further indications on the strength of the economy and the future course of monetary policy.

Gold drops from 3-month high ahead of U.S. retail sales report

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery held in a range between USD1,287.60 a troy ounce and USD1,293.20 an ounce.

Gold prices last traded at USD1,287.70 an ounce during European morning hours, down 0.55%.

Gold futures rallied to USD1,296.40 an ounce on Wednesday, the most since November 8, before trimming gains to settle at USD1,295.00, up 0.4%.

Prices were likely to find support at USD1,264.70 a troy ounce, the low from February 10 and resistance at USD1,313.30, the high from November 8.

Meanwhile, silver for March delivery fell 0.9% to trade at USD20.15 a troy ounce. The March contract settled 0.93% higher on Wednesday to end at USD20.34 an ounce.

The U.S. is to produce data on retail sales for January, as well as the weekly report on initial jobless claims later in the session.

Meanwhile, Federal Reserve Chair Janet Yellen is to testify on the bank’s semiannual monetary policy report before the House Financial Services Committee, in Washington.

In her first congressional testimony on Tuesday, Fed Chair Yellen said that the central bank would taper the pace of its asset purchases at future meetings if the economy continued to improve as expected.

She added that the pace of the central bank’s bond purchases are not on a “preset course”, while reiterating that Fed plans to hold interest rates at zero “well past” the time the jobless rate falls below 6.5%.

The testimony is coming amid fresh concerns over the outlook for the recovery, following the weakest two-month stretch of U.S. job creation in three years in December and January.

The Fed tapered its monthly asset purchase program by another USD10 billion to USD65 billion a month at its last policy meeting.

Elsewhere on the Comex, copper futures for March delivery dipped 0.2% to trade at USD3.249 a pound.

Bitcoin Bitcoin falls below USD500 on Mt. Gox

Bitcoin prices fell below the USD500-level on the Tokyo-based Mt. Gox on Thursday, as traders shied away from the virtual currency amid ongoing concerns over withdrawal issues.

Bitcoin drops below USD500 on Mt. Gox

BTC/USD fell to a session low of USD479.92 on Mt. Gox, before trimming losses to trade at USD512.05 during U.S. morning hours, down 5.5%.
Tokyo-based Bitcoin exchange Mt. Gox was forced to halt all Bitcoin withdrawals late last week due to a technical issue, with the issue yet to be fully resolved.
Mt. Gox was once the world’s largest Bitcoin trading exchange, with volume topping 1 million trades a day at its peak. It is now the third-largest Bitcoin exchange.
Meanwhile, sentiment remained jittery after the two largest Bitcoin-trading exchanges came under attack from hackers in the latest development to roil the virtual currency.
Slovenia-based Bitstamp said it halted customer withdrawals to deal with the issue on Tuesday night. BTC-e, which is based in Bulgaria, said it was also experiencing delays in crediting certain transactions.
The price of a Bitcoin last traded at USD654.35 on BitStamp, while prices on BTC-e traded at USD639.25. BitStamp is the world’s largest Bitcoin exchange, while BTC-e is the second-biggest.
According to the CoinDesk Bitcoin Price Index, which averages prices from the major exchanges, prices of the crypto-currency dipped 0.35% to hit USD646.15.
Bitcoin is digital cash for the internet and it is not backed by a government or central bank to regulate or issue it. It can be used to purchase goods and services from stores and online retailers.

Prices of the virtual currency soared to an all-time high of USD1,241.10 on November 29. It was trading at USD100 in early October.

Forex Brokers

If you are considering currency trading, you should be an experienced trader who can handle financial losses. Because of the risk, forex trading is not suitable for most investors. If you have been an active day trader, you likely have the skill set to use forex successfully, or at least have an understanding of the risk involved.

On the other hand, the forex market is now more welcoming than ever to newer, lower-volume investors. While volume investors fuel the majority of the $4 trillion dollar-per-day market, lower-volume investors have increasing opportunities, too. In the past, minimum deposits were in the thousands; now you can fund a new account with as little as $100. With this low deposit requirement, you can test out a few services without risking large sums of money.

If you’re trading from the United States, we recommend that you consider Alpari, due to its low commission rate and easy online trades, or MB Trading, which offers commission-free accounts. Traders based elsewhere in the world may want to investigate Dukascopy, a Swiss institution with a good reputation for transparency. We also offer articles about forex trading, profiling the good and bad of various brokerages, along with full reviews of the top forex brokers

Forex Brokers: What to Look For

To help you make an informed selection, we compared trade details, brokerage types, funding options, trading platforms, and help and support.

Trades

Some forex brokers are lowering the barriers to entry by allowing you to open forex accounts with as little as $100, whereas in the past, minimum deposits were in the thousands of dollars. In terms of available pairs of currencies, even though the majority of forex trades involve just a handful of currency pairs, most forex brokerages offer from 30 to 60 pairs of currencies. So you if you are interested in a fairly rare pairing, confirm that it is available through the forex broker that you are considering. Be aware that the minimum trade lot size is 1,000 for most forex brokers, which means that your currency pair transaction must be for at least 1,000 of whatever currency pair you are buying or selling. Some brokers require you to trade in lot sizes of 10,000.

If you trade in the United States, the law of the land protects you from yourself by limiting your ability to leverage trades to 50 to one. (Leverage is money that you borrow from the broker in order to conduct larger transactions than your actual funds would allow. With a leverage of 50:1, you can conduct a $50 transaction with $1.) In Europe, you can leverage up to 400:1. Just remember that, although leverage multiplies your ability to make profits, it is a two-edged sword so it can also multiply the speed with which you lose money.

Brokerage & Funding Options

When selecting a broker, you have a choice of two types: a market maker or an Electronic Communications Network (ECN) broker. Each charges you in a different manner. Market-maker brokers take a percentage of the spread in value between the buying and selling price. Because that spread constantly varies, some nefarious market makers have been known to manipulate spreads artificially for their own gain. ECN brokers usually just charge a commission per transaction, and so have no incentive to game the bid-ask spread. Be sure to read all fine print and contract details before opening a new account, so you know what kind of broker you’re dealing with. Also, be careful to note which governing agencies the broker is regulated and licensed by.

Before selecting a new broker, you should consider funding and payment options, along with all associated fees and interest charges. In our research, we found that withdrawing money from an account was trickier than depositing money into the account. Since it may take days or longer to retrieve your funds, you should not trade with money that you actually need in the short-term.

If you are a day trader, you do not have to worry about interest rates because you won’t be holding funds overnight. However, if you hold a position overnight, the broker will charge you interest. Since Islamic law prohibits interest, most brokers offer interest-free accounts for Muslims; these accounts charge a fee rather than interest. Brokers may charge other fees, including wire-transfer fees, margin rates and routing fees.

Trading Platforms

Most forex brokers use the MetaTrader platform with their clients, a popular trading platform that an experienced trader will likely already know well. You’ll likely have access to MetaTrader both on the web and via mobile. All platforms are now web-based, although many brokers offer their own proprietary trading platforms as well.

Help & Support

Although nothing can replace extensive research and experience with a broker over an extended time, we did evaluate a few criteria to show you different brokers’ levels of help and support. We compared how easy it is to contact the forex brokers and what kind of education they provide to clients. The best forex brokers offer telephone, email and chat support. The top brokerage services also provide documentation, videos and tutorials to help you learn how to minimize your risk.

Forex trading involves a high amount of risk, so we recommend that you educate yourself as much as possible before starting. Take advantage of the education provided directly from the brokers, market forums and our comparative reviews of different brokers.

Gold’s Pivotal Role

China has signaled it is going to propose plans this year to allow freer flows of the Yuan both in and out of the nation as part of measures to loosen control over the Yuan and interest rates. It was expected that full and free convertibility after 2022, but it’s clear that the program is moving at an accelerated pace. How far this next phase of convertibility will go has to be seen at the end of this year.

It’s understandable that the process will be gingerly handled so as to dovetail into the currency world without causing crises there. We have to always remember that China will do what suits China and not the outside world. But the inescapable conclusion we have to reach is that the Yuan is set to replace the U.S. Dollar to a greater or lesser extent as it arrives on the world stage. This will inevitably lead to more global uncertainty and instability as dollar hegemony is cracked and more currency volatility batters the currency world. Market reactions could well discount the future and cause premature reactions that, we believe, will benefit gold.

We feel it is inevitable that –in line with the World Gold Council sponsored OMFIF(Official Monetary and Financial Institutions Forum) report on the subject — from which we will quote freely, that gold will move to a pivotal role in the monetary system over time.  It is the beginning of substantial structural changes to the global financial system and in particular to the gold world.

This will happen at a time when the developed world’s financial system is at a structurally weak stage, struggling to precipitate economic growth and somehow coordinate the 3-speed growth within itself without heading into extended recessions across it. It is certainly time to stand back from a local national perspective and extrapolate the global economic and financial currents. We believe that the demand for gold and silver will find another facet in the growing monetary role precious metals will play in the future.

The world is preparing for possible twin shocks from the parlous position of the two main reserve currencies: the dollar and the euro. As China weighs up its options for joining in the reserve asset game, gold, the official asset that plays no formal part in the monetary system yet, has never really gone away and is poised, once again, to play a pivotal role. Many dismiss gold as a relic of the past or as an inadequate hedge against inflation. But from an asset management point of view, as well as on the basis of political analysis, gold has a lot going for it; it correlates negatively with the USD, and no other reserve asset seems safe from the coming USD shock.

If the specter of collapse continues to haunt the main reserve assets and on the expectation that the Yuan will take time to get into its stride, then the world will rush to safe-havens as currency pressures mount. With the expanded convertibility of the Chinese Yuan due by the end of this year, it would be wise to draw up contingency plans now, for such eventualities.

Gold may be the only reserve asset with the requisite size, clout and history to help ward off the strains that will beset the world monetary system from 2014 onwards.

Let’s look at the main features of this time of transition now taking place:

1. The West has been assailed by the longest-running economic crisis since the 1930s, undermined by the shift of manufacturing from West to East, shifting wealth in the process. In the past the developed world enjoyed 80% of the world’s income, while hosting 20% of its population. By 2020, according to Wolfensohn, the ex-head of the World Bank, this will change to 35% of the globe’s income going to the developed world and 65% of it going to the emerging world and so weakening the natural pull of the U.S. and European currencies.
2. Emerging nations, led by China have amassed huge surpluses in the form of massive monetary reserves that have become the most potent factor behind reserve diversification into other assets, including gold. The I.M.F.’s belated recognition in December 2012 of the occasional need for temporary capital controls demonstrates how dealing with world imbalances in a way consistent with emerging market needs has become a new force in international policy thinking.

1. The Chinese have followed a careful preparatory course for the Yuan to take on this reserve currency role, developing its banking system to facilitate this alongside the signing of many trade agreements (U.K. Australia, Brazil, etc.) in which the Yuan will be used to the exclusion of the USD. Now it is to be a currency independent of USD-oriented currencies and acting solely in the interests of China.
2. Critically the sheer size of the China-oriented trade bloc Asia –now the world’s second largest and moving to first position, possibly as early as 2016—is coming into a position to dictate to the rest of the world the monetary system acceptable to the east. It’s clear that China does not want to ‘fit into’ the present monetary system skewed to the retention of the United States’ hold on political, economic and financial supremacy. As an empire on the rise, it’s avoiding the pitfalls of rising through the ranks and will set its own standards that it hopes will be powerful enough to make others follow.
3. With the last 42 years of trying to dismantle gold’s position as effective money, it remains recognized as an important monetary asset in the global monetary system. The 40-year experiment with unbacked currencies, designed to reinforce and make useful the power of the developed world, globally, is stumbling, for a variety of reasons. In so doing it has left gold ready to fill the vacuum created by the evident failings of the dollar and the euro, and the not-yet requited ambitions of the Yuan.

1. For gold, it’s not important that China fulfill its ambitions. What’s relevant are the changes in the balance of power, both economic and financial, that will precipitate stresses and strains, making the use of an internationally-respected and valued asset critical to retain continuity in the global monetary system.
2. With China using an agency to buy not only local production of gold (the largest in the world now) and encouraging its own citizens to buy gold, we’ve already seen an ongoing propensity towards building up stocks of monetary gold, reflecting their cultural attachment to it that goes back millennia, is itself a powerful factor in the equation.

The role that gold would have to play would have to be consistent with the ambitions and dictates of first China then accepted by the developed world in its attempts to hold onto the advantages of globalization and international trade. We would see some form of indexation of currencies to gold or if acceptable to the Chinese the SDR and its components. In this way gold would act as a “value-anchor” initially suggested by the World Bank head Robert Zoellick.

Gold would not need to be paid out, but its dollar or Yuan or Rouble equivalent, would be based on the currency value against gold at the time. As such, gold would act as the measure of value against which all currencies fluctuate.

If gold is kept in the wings of the monetary system the world may face a huge liquidity crunch if a combination of U.S. and European shortcomings and the natural ambitions of Asia produce an attack on the major currencies. This would open up large holes in the framework of the world’s reserve currency arrangements.

With the advent on the world stage of the Yuan, the international community will be forced to take on these challenges, either willingly ahead of currency crises or in the midst of them. We feel that political pressures will lead to a recognition of these changes only in the midst of crises, or “currency wars,” that lie ahead of the world from 2014 onwards.

The unavoidable conclusion one can reach as to the future is that the world is headed towards the uncharted waters of a durable multi-currency reserve system, where the dollar will share its pivotal role with a range of other currencies, including the Yuan. Historical precedent and the underlying principles behind asset diversification indicate that the coming time of flux and uncertainty for worldwide reserve management will be a period when reserve holders spread their investments into a relatively wide range of assets and sectors.