Article Summary:

Blogs about basic information in forex trading, forex participants and how to earn big in forex trading.Last night, the Portuguese Parliament rejected the austerity measures put forth in budget prompting the Prime Minister to make good on his promise to resign. This is pushing Portugal closer to having to seek a bailout, yet the Euro is trading higher this morning. Part of the issue


Article Content:
Last night, the Portuguese Parliament rejected the austerity measures put forth in budget prompting the Prime Minister to make good on his promise to resign. This is pushing Portugal closer to having to seek a bailout, yet the Euro is trading higher this morning. Part of the issue is that interest rates are way to high for countries like Portugal to service their debt, and without the help of the EU to lower those rates, it is unsustainable.

This comes ahead of the two-day EU Summit, and apparently the market is turning a blind eye to these issues and directing its focus toward a possible ECB rate hike at the April meeting. But with re-financing costs so high for the PIIGS countries, it is unclear how raising rates is going to help this situation. Apparently the market is more hopeful than I am, though Moody’s agrees with me as they lowered ratings on Spanish banks.In the UK, retail sales figures came in worse than expected, which finally may give the BOE a ray of hope that their inaction on inflation may take care of itself. What is more likely is that the very inflation that are encouraging through loose monetary policy will likely harm GDP as people stop consuming.

World risk is still very high as an act of terrorism in Israel is heating up conflict there, not to mention the civil war taking place in Libya and the protests taking place in other Arab countries. Apparently the only folks who have noticed are those buying oil, which is now trading above 6.

Yet the Dollar is extremely weak, as QE2 has reduced the value of the Dollar as a safe-haven destination. Perhaps that is because data like the durable goods orders which posted a decline of .9% vs. an expected gain of 1.2% and the fact that another 382K people filed for unemployment last week show that the US economy is not improving.

Yet stocks push higher, as it more obvious that there really is no other place to put your money.

In the forex market:

Aussie (AUD): The Aussie is mostly higher on risk appetite and Dollar weakness with no news from Down Under to affect the currency fundamentally.

Kiwi (NZD): The Kiwi is higher across the board as last night’s GDP release came in slightly better than expected, showing a gain of .2% vs. an expectation of .1%. This is pretty impressive considering the earthquake that took place there.

Loonie (CAD): The Loonie is mostly higher taking its cues from higher oil prices, which is in high demand given the unrest in Arab countries.

Euro (EUR): The Euro is mostly higher despite Portugal’s rejection of austerity. The EU Summit today and tomorrow may address some of these issues, though I could see the Euro pull back from these levels.

Pound (GBP): The Pound is lower as retail sales figures came in worse than expected showing a decline of 1% vs. an expectation of a .6% decline. Higher prices are likely driving consumers away, so this could be the market doing what the BOE won’t. (Click chart to enlarge)



Dollar (USD): The Dollar is mostly lower as apparently the global risk in the marketplace is not enough to increase demand for the greenback. In-line initial jobless claims at 382K and worse than expected durable good numbers aren’t helping the perception of the Dollar.

Yen (JPY): The Yen is mostly weaker as the G-7 intervention has essentially put a floor under USD/JPY. While Japan is set to report CPI data tonight, this news is ancillary as the big story is the containment of the nuclear crisis. (Click chart to enlarge)



It is not my position to tell the market what it should be doing; my job as a trader is just to follow along and be ready to change course if the situation presents itself. However, my experience tells me that the markets have greatly discounted the global risk-taking place around the world.

Seemingly everyday there is a new concern, yet the markets shrug it off like its no big deal. This I believe is setting the markets up for a rude awakening and presents tremendous opportunity for those who can recognize when the tuning point comes.

So don’t get lulled into a false sense of security, as the gravity of world events could take a turn for the worse at a moments notice. Be one of the first through the exit door and not lagging behind!

To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!

To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!



Tags: account, AUD, Aussie, blog, cad, course, currenc, currency, currency trading, dollar, dow, economy, EUR, Euro, forex, forextrading, free, fx, fxedu, gbp, Il, jpy, market, Mike Conlon, nzd, practice, ssi, time, trade, USD, Yen

———————