Central banks
National central banks play an important role in the foreign exchange markets. They try to control the money supply, inflation, and/or interest rates and often have official or unofficial target rates for their currencies. They can use their often substantial foreign exchange reserves to stabilize the market. Milton Friedman argued that the best stabilization strategy would be for central banks to buy when the exchange rate is too low, and to sell when the rate is too high—that is, to trade for a profit based on their more precise information. Nevertheless, the effectiveness of central bank "stabilizing speculation" is doubtful because central banks do not go bankrupt if they make large losses, like other traders would, and there is no convincing evidence that they do make a profit trading.
Monday, June 22, 2009
Commercial companies
An important part of this market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade fairly small amounts compared to those of banks or speculators, and their trades often have little short term impact on market rates. Nevertheless, trade flows are an important factor in the long-term direction of a currency's exchange rate. Some multinational companies can have an unpredictable impact when very large positions are covered due to exposures that are not widely known by other market participants.
An important part of this market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade fairly small amounts compared to those of banks or speculators, and their trades often have little short term impact on market rates. Nevertheless, trade flows are an important factor in the long-term direction of a currency's exchange rate. Some multinational companies can have an unpredictable impact when very large positions are covered due to exposures that are not widely known by other market participants.
Unlike a stock market, where all participants have access to the same prices, the foreign exchange market is divided into levels of access. At the top is the inter-bank market, which is made up of the largest investment banking firms. Within the inter-bank market, spreads, which are the difference between the bid and ask prices, are razor sharp and usually unavailable, and not known to players outside the inner circle. The difference between the bid and ask prices widens (from 0-1 pip to 1-2 pips for some currencies such as the EUR). This is due to volume. If a trader can guarantee large numbers of transactions for large amounts, they can demand a smaller difference between the bid and ask price, which is referred to as a better spread. The levels of access that make up the foreign exchange market are determined by the size of the "line" (the amount of money with which they are trading). The top-tier inter-bank market accounts for 53% of all transactions. After that there are usually smaller investment banks, followed by large multi-national corporations (which need to hedge risk and pay employees in different countries), large hedge funds, and even some of the retail FX-metal market makers. According to Galati and Melvin, “Pension funds, insurance companies, mutual funds, and other institutional investors have played an increasingly important role in financial markets in general, and in FX markets in particular, since the early 2000s.” (2004) In addition, he notes, “Hedge funds have grown markedly over the 2001–2004 period in terms of both number and overall size” Central banks also participate in the foreign exchange market to align currencies to their economic needs.
Presently, the FX 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 financial 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.[2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.[3]
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. [1]FX 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 worldover countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system until 1971.
Sayuri Ozawa, Creative Director
Sayuri is responsible for our unique look and feel. She has over 10 years of experience in creative development, and web and graphic design. Sayuri holds a successful portfolio of projects from Japanese and US corporations.
She received extensive training and multiple Bachelor and Masters degrees from leading Japanese and U.S. universities. Sayuri is leveraging her unique intercultural background to make Forex Club different from all the competition.
Sayuri is responsible for our unique look and feel. She has over 10 years of experience in creative development, and web and graphic design. Sayuri holds a successful portfolio of projects from Japanese and US corporations.
She received extensive training and multiple Bachelor and Masters degrees from leading Japanese and U.S. universities. Sayuri is leveraging her unique intercultural background to make Forex Club different from all the competition.
Pavel Khizhnyak, Head of Institutional Sales
Pavel has 8 years experience in the Forex Industry. He is the founder and supervisor of the Institutional Sales Department. His background includes project management, oriental studies, and business planning and analytics.
He has been focused on developing the fast growing Asian markets. Prior to joining Forex Club Financial Company, he held the chief representative officer position in the Academy of Exchange Trading in Beijing. He guided the project from the ground level, earning many prestigious financial industry awards.
Pavel earned a Bachelor's degree in Oriental Studies and a Masters degree in Project Management. He has enjoyed the success he has had working in a number of corporations in Eastern Europe, China, and South Korea, whilst pursuing advanced professional training in corporate management, marketing and customer service.
Pavel has 8 years experience in the Forex Industry. He is the founder and supervisor of the Institutional Sales Department. His background includes project management, oriental studies, and business planning and analytics.
He has been focused on developing the fast growing Asian markets. Prior to joining Forex Club Financial Company, he held the chief representative officer position in the Academy of Exchange Trading in Beijing. He guided the project from the ground level, earning many prestigious financial industry awards.
Pavel earned a Bachelor's degree in Oriental Studies and a Masters degree in Project Management. He has enjoyed the success he has had working in a number of corporations in Eastern Europe, China, and South Korea, whilst pursuing advanced professional training in corporate management, marketing and customer service.
Lydia Wong, Head of New Accounts and Support Department
As the Head of the New Accounts Department, Lydia is responsible for insuring timely account processing, exceptional customer service and client support for all language divisions.
Lydia has 10 years working experience in the banking industry. She began her career as a bank client coordinator in Dime Savings Bank in New York and worked her way to Assistant Branch Manager in TD Bank (Commerce Bank). She holds the Annuity and Insurance license and was awarded 2 years in a row as a multi-million dollar producer in Washington Mutual. She was a certified consumer loan officer in TD Bank, handling over millions of dollars worth of loans per year.
Lydia joined Forex Club in 2008 as a manager of the New Accounts Department, overseeing 4 international divisions and bringing the rigorous banking standards and practices into the company.
As the Head of the New Accounts Department, Lydia is responsible for insuring timely account processing, exceptional customer service and client support for all language divisions.
Lydia has 10 years working experience in the banking industry. She began her career as a bank client coordinator in Dime Savings Bank in New York and worked her way to Assistant Branch Manager in TD Bank (Commerce Bank). She holds the Annuity and Insurance license and was awarded 2 years in a row as a multi-million dollar producer in Washington Mutual. She was a certified consumer loan officer in TD Bank, handling over millions of dollars worth of loans per year.
Lydia joined Forex Club in 2008 as a manager of the New Accounts Department, overseeing 4 international divisions and bringing the rigorous banking standards and practices into the company.
Michael Felice Jr, CFO
Michael is responsible for all of the financial matters that the company incurs, which include, but are not limited to: financial planning, handling audits and regulatory bodies, implementing accounting and financial guidelines, overseeing all accounting activities, as well as preparation of corporate tax returns. Mike is one of company's founding employees, working as a consultant since 2005 and joining it full time in January 2007.
Michael holds a Bachelor of Science degree in Business Administration with a concentration in Accounting. He is also enrolled with the Internal Revenue Service. Prior to joining Forex Club, Michael was a partner in a tax and accounting firm, which had several hundred clients, with services including personal, business, and fiduciary tax returns and Internal Revenue Service audits. His extensive financial and accounting experience brings solid knowledge and operational skills to Forex Club management team.
Michael is responsible for all of the financial matters that the company incurs, which include, but are not limited to: financial planning, handling audits and regulatory bodies, implementing accounting and financial guidelines, overseeing all accounting activities, as well as preparation of corporate tax returns. Mike is one of company's founding employees, working as a consultant since 2005 and joining it full time in January 2007.
Michael holds a Bachelor of Science degree in Business Administration with a concentration in Accounting. He is also enrolled with the Internal Revenue Service. Prior to joining Forex Club, Michael was a partner in a tax and accounting firm, which had several hundred clients, with services including personal, business, and fiduciary tax returns and Internal Revenue Service audits. His extensive financial and accounting experience brings solid knowledge and operational skills to Forex Club management team.
Peter Tatarnikov, Chief Operating Officer, VP.
Peter has 12 years experience in the Forex Industry. He joined Forex Club Financial Company in 2006 as its Chief Operations Officer. As a Tuv-Thuringen ISO quality systems manager, Peter brings benchmark performance standards to every stage of the company's daily operations.
Peter formerly held the position of Chief Dealer in the largest retail Forex broker in Russia and CIS. Under his leadership, he expanded the Dealing Department by fivefold, uniting top Forex trading professionals.
From 1999 to 2003, Peter held several banking positions, which ranged from assistant trader to chief trader. During his career, Peter designed and held over 200 seminars on Forex Trading. Professionalism and commitment has made him a well known FX market commentator and spokesperson for the retail FX industry. He has frequently appeared in financial news outlets.
Peter has 12 years experience in the Forex Industry. He joined Forex Club Financial Company in 2006 as its Chief Operations Officer. As a Tuv-Thuringen ISO quality systems manager, Peter brings benchmark performance standards to every stage of the company's daily operations.
Peter formerly held the position of Chief Dealer in the largest retail Forex broker in Russia and CIS. Under his leadership, he expanded the Dealing Department by fivefold, uniting top Forex trading professionals.
From 1999 to 2003, Peter held several banking positions, which ranged from assistant trader to chief trader. During his career, Peter designed and held over 200 seminars on Forex Trading. Professionalism and commitment has made him a well known FX market commentator and spokesperson for the retail FX industry. He has frequently appeared in financial news outlets.
Michael J Felice, President
Michael J Felice was instrumental in organizing and founding Forex Club Financial Company Inc. in 2005 and has served as its President and Chief Executive Officer since its inception.
In this capacity, Mr. Felice oversees the firm's daily operations and participates in overall strategic decision making.
With nearly 30 years of diverse experience within the brokerage industry, Mr. Felice has built a reputation for competency and integrity through his interaction with various financial and regulatory agencies. His previous work experience includes both executive and sales positions, and involved registration with the Commodity Futures Trading Commission and various categories as well as National Futures Association membership.
Michael J Felice was instrumental in organizing and founding Forex Club Financial Company Inc. in 2005 and has served as its President and Chief Executive Officer since its inception.
In this capacity, Mr. Felice oversees the firm's daily operations and participates in overall strategic decision making.
With nearly 30 years of diverse experience within the brokerage industry, Mr. Felice has built a reputation for competency and integrity through his interaction with various financial and regulatory agencies. His previous work experience includes both executive and sales positions, and involved registration with the Commodity Futures Trading Commission and various categories as well as National Futures Association membership.
iTrade Capital Markets offers you a choice of three different Expert Advisor automated trading systems. Each one has an outstanding performance record and all bring fantastic benefits. Expert Advisors are automated trading programs that plug into MetaTrader software and trade your account for you, no need to be online or logged in. You will still have full access to your account so you can login any time to view performance or even place your own trades.
Saxo Bank A/S shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Saxo Bank that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated.
Today's calendar is very sparsely populated with the rather stale Canadian Retail Sales from April the only data point of note, but it appears that the market may be building energy for a larger move soon, as is often the case when important inflection points are in the offing. On the risk appetite front, we have all eyes on the 200-day moving average of the US S&P500,
As we have been doing for the past few days, we continue to focus on the ranges within the ranges, as players in the FX market dont seem to want to put many of their chips on the table until key technical and/or event risk thresholds are crossed. See EURUSD techs below. For AUDUSD, the important level comes in around 0.8050 to the upside with focus on the 21-day moving average on the close (the last close convincingly below this level was iin April).
The FT was out with an interesting article about Switzerland's desire to reduce the size of its two largest banks to reduce the systemic risks posed by their size relative to the Swiss economy. The SNB's Hildebrand indicated that he hoped to find new international rules for banks, but that the bank might have to take "direct and indirect" steps to limit banks sizes. This story bears watching, as does the SNB's actual intervention in the market, which was apparently felt in the market yesterday to the tune of yards of francs on the offer after the SNB shot across the bow with strong verbal intervention earlier in the day.
Particular interest was focused on the strongly falling weekly US continuing claims number, which was down a solid 148,000 from the previous week, the first drop since January. This will give the green shoots crowd some reason for hope, but there is an awful lot of wood to chop before we are likely to see the unemployment rate falling again in the US. The initial jobless claims number needs to drop consistently and the payrolls numbers will need to begin to turn to consistently outright positive levels before we can call a bottom, but this does give hope that the US job market's deterioration is slowing.
Market Comments:
US Treasuries sold off heavily yesterday with the much better than expected Philly Fed and the falling continuing jobless claims numbers giving the optimists some hope while the market also eyes next weeks massive auction ($104 billion) of two, five and seven year US treasury notes. The auctions were announced yesterday. The heavy treasury selling and a gentle rally in stocks saw the the usual reaction in the FX market, with JPY crosses up sharply and the USD suddenly struggling back toward support. The ranges held rather well, however, with EURUSD finding a brick wall at 1.4000 once again before selling off all the way below 1.3900 late in the North American session. It appears the market is on tenter hooks ahead of next week's FOMC meeting, where it appears the Fed will need to send some kind of signal on its view of the market's rather bold prediction of late that the Fed could move on rates sooner than was previously expected. The market will also be curious how well it can absorb the treasury issuance blitz, as next week's auction size was likely increased after the success of recent well subscribed auctions.
US Treasuries sold off heavily yesterday with the much better than expected Philly Fed and the falling continuing jobless claims numbers giving the optimists some hope while the market also eyes next weeks massive auction ($104 billion) of two, five and seven year US treasury notes. The auctions were announced yesterday. The heavy treasury selling and a gentle rally in stocks saw the the usual reaction in the FX market, with JPY crosses up sharply and the USD suddenly struggling back toward support. The ranges held rather well, however, with EURUSD finding a brick wall at 1.4000 once again before selling off all the way below 1.3900 late in the North American session. It appears the market is on tenter hooks ahead of next week's FOMC meeting, where it appears the Fed will need to send some kind of signal on its view of the market's rather bold prediction of late that the Fed could move on rates sooner than was previously expected. The market will also be curious how well it can absorb the treasury issuance blitz, as next week's auction size was likely increased after the success of recent well subscribed auctions.
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