Weekly Currency Update

Major currencies

Dollar

The dollar remained the markets’ currency of the week as most investors were seen to favor the greenback in times of uncertainty over other safe-haven currencies such as the Japanese yen, the Swiss franc, and gold. The markets were also comforted by the G7 meeting held last weekend that pressed on global leaders to refrain from policies that would fuel the revival of the feared currency wars, which left investors in despair.

Global stocks recorded their fourth straight day of gains on Friday, though they are off session highs.

Attention will shift to the US early next week, with the Federal Reserve set to hold its September policy meeting on Tuesday and Wednesday. Many investors expect the US central bank’s Federal Open Market Committee to take some form of intervention in the bond market to stimulate the sluggish economy.

During the week, a risk-asset bounce came in the face of more disappointing data on the health of the US economy. The September sentiment survey released on Friday shows consumers still pretty discouraged. Wednesday’s soft retail sales figures were followed by Thursday’s higher than forecast weekly initial jobless claims, weak surveys of business activity from the New York and Philly Feds, and stronger than expected inflation data for August, which some deem could restrict the US Federal Reserve in applying further support.


Euro

The euro headed for its best week in eight against the dollar on Friday but the gains appeared to be running out of steam as investors deemed policymakers’ latest action insufficient to solve Europe’s debt crisis. Gains in the euro earlier in the week were fueled by the European Central Bank’s announcement on Thursday of joint action with other central banks to offer three-month dollar loans to banks in order to ease pressure in the money market. But the euro’s rally faded on Friday as traders refocused on the risk of an eventual debt default by Greece.

US Treasury secretary Timothy Geithner told Europe’s leaders to stop bickering and take control of the debt crisis that has brought “catastrophic risk” to financial markets. In a blunt warning that reflected Washington’s growing concern, Geithner urged European leaders to halt a months-long clash with the ECB and argued that the European Union’s growing reliance on foreign lenders would imperil the bloc’s ability to control its own destiny.

Geithner’s comments came as the Europe’s finance ministers agreed to withhold an €8bn loan payment to Greece, a move that could leave Athens scrambling to satisfy its lenders before it runs out of cash.

Range for previous week: $1.3499-$1.4275
Range for this week: $1.3850-$1.4020

Sterling

Sterling reversed early losses versus the dollar on Friday as investors booked profits on short positions, but it remained within sight of an eight-month low, determined by signs Bank of England officials were heading toward more monetary stimulus. The pound rose against a broadly weaker euro which fell in light trade, with traders unconvinced that a meeting of EU finance ministers would result in more aggressive action on the region’s debt crisis.

Sterling recovered from a session low of $1.5745, hit on Friday, after BoE deputy governor Charlie Bean said in a newspaper interview that more quantitative easing would be effective if more stimulus was needed. Many argue sterling will remain under selling pressure given growing speculation of more quantitative easing which would be sterling-negative as it would flood the market with more pounds and the ongoing risks to the UK economy from the euro zone debt crisis.

Comments from British Business Secretary Vince Cable on the potential need for more quantitative easing to revive Britain’s fragile economy echoed similar suggestions from BoE policymaker Martin Weale on Thursday, and kept pressure back on the pound.

Range for previous week: $1.5704-$1.6186
Range for this week: $1.5650 - $1.6023

Yen

Tax hikes worth of $146bn were proposed by Japan’s government on Friday to help fund rebuilding from the devastating March 11 earthquake and tsunami. The heavily indebted government faces a challenging act to secure funding for Japan’s biggest rebuilding effort since the aftermath of World War II.

To limit the tax burden, Tokyo is seeking to sell stakes in Japan Tobacco Inc and unlisted Tokyo Metro to fund rebuilding in areas devastated by the magnitude 9.0 quake and tsunami earlier this year. Since before the March disaster, the Democrat-led government has been seeking a cut in the corporate tax rate, one of the highest among industrialised countries at around 40%, to promote domestic investment.

With a rising yen threatening to derail the economy’s recovery from a recession triggered by the March disaster, a ruling party policy panel proposed creating a fund to mitigate the strong currency’s impact as one of its recommendations for the third extra budget.

Range for previous week: ¥76.51-¥77.85
Range for this week: ¥76.00-¥77.00
 

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This Week On Turtle Soup



Here is what happened on Turtle Soup this past trading week from Sunday, March 6 through Friday, March 11, 2011.

Sunday, March 6, 2011Eurozone: A Bunch of Bloc-Heads - The eurozone is in danger of flunking its own stress test. With all their bickering, who knows if this thing is ever going to get fixed?

 

Monday, March 7, 2011What Drives Currency Prices? - In a 3 minute video, economist Edwin M. Truman says the Chinese yuan is a good long-term bet and why he would short the Brazilian real.

The Death Knell For Middle East Oil? - Will the long-term increase in oil prices expedite the West's efforts to decrease its dependence on Middle East oil? I'm all for it. Gas is up to $3.50 a gallon in Atlanta and at least a dollar more in California.

IronForex Launches Online Operations - Do we really need another Cyprus-based Forex broker? Well, this one has something special up its sleeve. Something they call their 'One Account, Five Platforms' strategy.

 

Tuesday, March 8, 201110 Changes That Improved My Currency Trading - Not a sexy title but, after blowing up two accounts in a year, these 10 things were the difference makers that helped me start making money in Forex.

CFTC Dings Weber For $1.1 Million Forex Fraud - CFTC caught Helmut Weber. Helmut is not the sharpest pencil in the box, but what does that say about the folks who Helmut fleeced?

 

Wednesday, March 9, 2011CFTC: Top 10 Forex Brokers - We put together a report that shows the top 10 retail Forex brokers in the U.S. and sorted it by the amount of client funds they are holding. GAIN tops the list with more than $142 million.

FXCM Investigated For RICO Violations - Speaking of GAIN, FXCM isn't doing to bad either. However, someone thinks FXCM violated some racketeering laws on their way to their IPO last December.

Forex Company Profiles In PDF Format - We found this neat little tool that lets you dynamically turn a webpage into a PDF file, so we incorporated it into our company profiles. Now you can save a company profile to your desktop with just the click of a button. So far, we've had almost 800 downloads.

 

Thursday, March 10, 2011Alpari Launches FX Options Trading - There aren't a lot of U.S. Forex brokers who offer FX options trading but Alpari (US) is the latest.

CFTC Charges Jade With $3.2 Million Forex Fraud - Jacob Juma Omukwe knew that CFTC usually catches the bad players in the Forex market. So he figured that he could get away with stealing $3 million with his Forex scam by not even registering as a broker. It's like a little kid who covers their eyes to hide from ghosts at night, "...if I can't see them then they can't see me." Sorry Jacob, CFTC can still see you.

 

Friday, March 11, 2011China Reports $7.3 Billion Trade Deficit - China rarely reports trade deficits, but analysts said the February trade deficit figures they reported had most likely been distorted by the effects of the Lunar New Year holiday period, because many exporters had to ship in January. I'm sorry. Does that sound plausible to you?

What Dummy Gave This Guy $50k To Trade? - Dennis Todd Hagemann told an investor he "would rock her world" and turn her $50,000 investment into $115,000 in one month.

Who's Who In Forex: Olli Rehn - ...and for our last post of the week - if you live in the U.S. then you probably never heard of Olli Rehn, but he's one of those unsung heroes who will probably wind up saving our bacon.

So, the end of another trading week. Please don't forget to explore Forexturtle this week. We've added some companies and updated a few dozen more. Don't be a stranger.

 

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This Week On Turtle Soup



Here is what happened on Turtle Soup the trading week from Sunday, February 27 through Friday, March 4, 2011.

Sunday, February 27, 2011Trade Interceptor: Multi-Broker Forex App - Trade Interceptor unveiled its new multi-platform app supported by FXCM, GFT, ACM, FX Solutions, and MB Trading.

State Street Forex Probe Expands - We continue to follow the State Street saga. I guess $11.7 million in penalties wasn't enough for CFTC.

 

Monday, February 28, 2011Forex Scam Goes Small Potatoes - David & Loredana Ortiz thought they got away with $232,000 of investors' money. CFTC thought not.

 

Tuesday, March 1, 2011Who's Who in Forex: Masaaki Shirakawa - Japan's Governor of the Bank of Japan was tabbed the world's 6th most powerful by Newsweek.

FxPM Opens Miami Office - World Currency Trading opens a new Forex trading facility in Miami.

NFA Hires Edward Dasso For Surveillance - His official title is VP of Market Regulation but his official job is to oversee the surveillance of swap execution facilities (SEF).

Wednesday, March 2, 2011FOREX.com Goes Commercial - Now that they've gone public, GAIN Capital is stepping up its pursuit of retail Forex traders with prime time commercials. I have to admit -- it is a cute commercial.

 

Thursday, March 3, 2011FXall Opens Mumbai Office - FXall expands into one of the world's fastest growing Forex markets.

Who's Who in Forex: Ben Bernanke - We finally got around to Big Ben in our Who's Who in Forex series.

 

Friday, March 4, 2011NFA Bars CD Capital Management - As active as NFA and CFTC have been lately, I just can't figure out why firms don't pay more attention to how they run their businesses.

Forex, You & Taxes - Bob Green dispenses great advice on what you need to know about accounting for your Forex gains/losses when the IRS comes knocking.

 

So, the end of another trading week. Hope to see you again next week.

 

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This Week On Turtle Soup

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Here is what happened on Turtle Soup the trading week ending 02/25/2011.

Sunday, February 20, 2011Who's Who in Forex: Pranab Kumar Mukherjee - India's powerful Finance Minister made it clear that India is not taking sides in the China-U.S. currency wars.

China Hammers G-20 Into Submission - China's hard bargaining forced the G-20 to water down its resolution to correct economic imbalances.

 

Monday, February 21, 2011 - Newsweek named Trichet the world's 5th most powerful man but he's got conspiracy theorists up in arms about his economic Global Governance stand.

FXCM To Announce Q4 Earnings - FXCM will report its 2010 Q4 earnings on March 2, 2011. You can listen in on their conference call.

 

Tuesday, February 22, 2011MIG Bank's New Transparent Dealing Model - MIG Bank is letting its clients see MIG's liquidity providers' bids so everyone knows they're getting the best price.

 

Wednesday, February 23, 2011IMF Reviews Praised Libya & Egypt - Did the IMF screw up when they praised Libya's and Egypt's ambitious reform agendas in a report just before the Middle East broke out in turmoil? Bad timing.

ECB Charges Politicians for Euro Problems - The ECB charged political leaders of member states with excessive spending and borrowing causing the Eurozone's current economic mess.

Stuckey Charged in $2.8 Million Forex Fraud - CFTC was busy again this week as they nabbed the Stuckey Group for yet another Forex scam.

Global Financial Crisis By Design? - John Truman Wolfe thinks the global financial crisis was carefully designed assault on the dollar. Somebody's listening - the man's got a best-selling book.

 

Thursday, February 24, 2011Currency War: Yuan vs. Dollar - Nouriel Roubini thinks that if four key things happen, then China's yuan could replace the dollar as the world's reserve currency.

Forex Tips From the Far East - 127 million Japanese can't be wrong. Japanese traders are so active they account for significant moves in currencies they favor.

 

Friday, February 25, 2011Triple 8 Launches UFXMarkets - A new ParagonEX broker. I called them in London and they would not give me their street address. What's up with that?

 

This was a good week - made a little money, met some new friends, and finished some badly needed changes on ForexTurtle. Hope to see you again next week.

 

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This Week On Turtle Soup



Here is what happened on Turtle Soup the trading week ending 02/18/2011.

Monday, February 14, 2011GAIN Capital To Sponsor New CNBC Program 'Money in Motion Currency Trading' - Melissa Lee and Andy Busch brings Forex to CNBC in prime time.

Is China Now The Worlds Second Largest Economy - Recent reports that Japan's economy has contracted now makes the Chinese economy the world's #2

Easing of Tensions in Egypt Lift Optimism in Global Markets - Investors who were very nervous about the long-term picture in the Middle East are feeling a little better now.

iFOREX Launches 2011 Educational Forex Trading Program - iFOREX is now making a big push to grab all the newbies with their new UK-based education program.

 

Tuesday, February 15, 2011G-20 to Tackle Forex Issues - Group of 20 nations finance ministers want to talk about exchange rates, volatility capital flows, commodity-price inflation and rebalancing the global economy. Somthing smells fishy.

Why The U.S. Trade Deficit Has Ballooned - The BBC's video perspective on recent figures from the U.S. Commerce Department and how they show that the deficit is still growing.

Death Threats Shut Down Cote d'Ivoire BNP Paribas & Citibank Operations - Coup de tat, disgruntled presidents, big money and guns. Sounds like a plot for the next James Bond film.

 

Wednesday, February 16, 2011China To Offer Yuan Options As Hedging Tool - China will begin the domestic trading of yuan options beginning April 1st.

NFA Announced New FCM Filing Requirements Profiling Traders - New NFA filing requirements of FCMs ask an awful lot of questions about their clients' trading habits.

CFTC Charges PMC Strategy LLC With Ponzi Scheme - CFTC snags another bad player!

Bank of New York Mellon Claims Forex Fraud Charges False - Yeah, right. Who's going to believe 'em now?

 

Thursday, February 17, 2011Is CFTC Really Big Brother - CFTC has been very watchful lately and catching Forex scam artists.

Landen To Expand Forex Trading To UK - Landen Options and Futures, a Brussels firm, expanded to London and Scotland.

A Great Year For The Yuan - The Bank of China extended yuan to U.S. customers.

 

Friday, February 18, 2011State Street Pays $11.7 Million In Forex Settlement - Hopefully, a final update on the State Street saga.

Who's Who in Forex: Lorenzo Bini Smaghi - A man whose spoken word can change the way the market moves.

 

Again, the week was full of reported scams, schemes, complaints, unexplained surges in the market. Let's hope next week will be better.   

 

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