Month: November 2010

Waterbury Financial Strategies Inc CEO / Founder Rahim Thawer post this week “Entrepreneurs: US Dollar Analysis for your Business.”

Entrepreneurs, start your engines! The Goal is uncomplicated, make money during the recession. The US Government has two options to recoup the funds it has injected in the market, one being raising taxes which is very unlikely due to the state of the economy. Second, the most favored is inflating the US Dollar. Intelligence is a commodity in today’s market, which brings not only intangible value but also tangible and that is the very reason the term ‘insider’ is referred to at times.

Many times we have speculated and said ‘if I had only known.” Say for example, would you have bought Apple stock when it was trading for less than $5 dollars and at present at $184.00? My fellow entrepreneurs, you have access to that information at the current time, knowing that the US Dollar is going to be inflated and you need to capitalize on that whether it be investing in foreign currency or simply making wise decision in regards to future dealings.

One of the key obstacles many business owners will encounter is liquidity due to the banking regulations and lack of funds. Capitalizing on current state of economy does not necessarily require monetary resources but rather a right strategy with an impeccable conceptualization. What are you going to capitalize on? Your daily operations! They will need to be agile and flexible enough to wither the storm.

As a business owner you will need to factor in anticipated inflation or deflation in all the financial activities of the businesses as this is crucial to sustain not only your short term operations but also long term. You will need to convert your cash flow from constant to actual and apply appropriate formulas like use of discounting payment factors rather than compounding. Many businesses fail due to under capitalization but more so due to failing to understanding how critical it is to allocate appropriate resources for future use.

A simple way to understand this concept is to recall what a dollar used to buy over 10 years ago and what does it buy today. This concept of understanding inflation and devaluation of US Dollar is going to be one of the driving indicators of many businesses. This concept is more important than ever before especially for the manufacturing sector who exports their products since we are now dealing with foreign manufacturers who are exploiting on the fiasco caused by the US markets. So be very smart in your dealings.

My Thoughts: As an Entrepreneur, make sure to evaluate every revenue stream and apply appropriate inflation models on current and projected cash flows as well as on the outstanding debt. This concept can also be employed by investors and it is just as important as your ROI. So be wise and run a lean organization with strong future projections!

Rahim Thawer / CEO of Waterbury Financial Strategies Inc http://www.waterburyfs.com

About the Author

CEO & Founder of Waterbury Financial Strategies Inc.

By Dezan Shira

The internationalization of the Chinese yuan took another step forward by beginning its trade against the Russian ruble in the country’s interbank market on Monday.

The China Foreign Currency Trading Center announced that the interbank yuan-ruble trade will be conducted in the form of spot exchange transactions and will follow the market maker rule. According to the announcement, The People’s Bank of China authorizes the Foreign Exchange Trading Center to announce a middle rate for the pair at 9:15 a.m. local time every business day. The pair can float 5 percent above or below the middle rate; wider than the 3 percent trading band currently in place for yuan trading against other non-U.S. dollar currencies.

China began trading the yuan against the currencies of other emerging economies on August 19 this year by first allowing trade with the Malaysian ringgit. In addition, traders can also buy and sell the yuan against the U.S. dollar, the euro, the yen, the Hong Kong dollar and the British pound.

Speaking at a press conference on Monday, the superintendent of China’s Foreign Currency Trading Center said that China’s currency trade with other emerging economies is a “necessary experience” and believes the yuan-ruble trade will strongly bolster bilateral trade and investment between China and Russia. He also mentioned that China will consider opening up the yuan-ruble forward exchange or swap transaction depending on market demand.

Although the yuan recently failed the “freely usable” test for the IMF’s Special Drawing Rights valuation basket, the Chinese government does not seem to be slowing down its push for a more globalized currency.

Li Daokui, a member of the central bank’s Monetary Policy Committee, said during the Lujiazui Forum held in Shanghai this year that the yuan’s internationalization is “inevitable.” He estimates that the yuan will be entirely involved in global currency markets by between 2020 and 2025. Li says the government will consider opening up more avenues for foreign investors to accelerate the yuan’s globalization.

China is also encouraging a greater magnitude of cross-border transactions to reduce the yuan’s dependence on the U.S. dollar. Last year, Premier Wen Jiabao began calling for increased cooperation with other Asian countries to reduce the risks of U.S. dollar dominance in China’s asset holdings. The central bank also commented last year that China will be working for a more “normalized” and flexible exchange rate system and the yuan should be pegged to a basket of currencies rather than just the U.S. dollar.

About the Author

This article was written for China business news site, China-Briefing.com, which was founded by Chris Devonshire-Ellis.

Vietnam-Briefing.com was also founded by Chris Devonshire-Ellis.

By James McKee

There are a couple of very exciting developments right now in the Forex currency exchange so I will go ahead and get to it! The Euro is seeing some gains as news of Ireland’s debt woes are being lessened by loans issued by other European countries as well as the IMF. However other countries such as Greece and Portugal and wearing down on the Euro due to their current instabilities, watch the Euro for gains against the USD in the short term but expect the EUR|USD to test support. This is definitely a pair to stay up to date on but do not jump in without looking.

The GBP has been making significant gains against the dollar due to strong retail sales and a slight drop in unemployment. These are real gains unlike much of what is being realized in the United States from creating money out of thin air. It certainly appears that England’s austerity measures combined with the encouragement of their economic growth is having a huge impact on the value of their currency.

Canada and its currency are doing great currently, it has risen against the US dollar due to a rise in wholesale trade and other indicating factors. The Canadian dollar is a great currency to pair with the USD currently due to the eminent reversal in store for the USD after the stock market corrects itself.

The NZD and AUD are both experiencing growth fueled by one another’s GDP and other growth. These countries are both experiencing increased exports and thus their currencies are rising against the USD and EUR. Due to the fact that gold is gaining in value and Australia is the world’s third largest gold producer so its currency will rise in value steadily.

The currencies mentioned above are all putting out solid indicators in one direction or the other, but be careful because the Euro and USD will be very unstable shortly due to lackluster growth.

About the Author

Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.

Waterbury Financial Strategies Inc CEO / Founder Rahim Thawer post this week “Businesses: Conforming for the Economic Cycle.”

The world we know today is much contrasting and deviating then what we have come to experience over the last few years, or even last few decades. We are no longer residents of a stagnant environment, so if the world around us is constantly adapting to new activities, why are businesses still executing the same old broken models? Perhaps there is a sense of comfort or maybe even there is a lack of understanding of the new evolved concepts that are applicable in today’s marketplace.

The economic cycle changes very frequently for most businesses more like seasons in a year and we need to alter our strategies accordingly. It would be satisfying if the formulas we used last year or even decades ago are applicable today and some revenue streams can be replicated and mastered. However, we know that is not the case so we need to constantly shift our focus and re-formulate.

As many businesses have seen the rise in energy costs in 2008 have directly contributed to loss in profits for many businesses, yet very little has been done and many have simply acknowledged this change and accepted the terms. If we continue to accept these terms that are brought forward by third parties then we are not even fighting this battle and are giving in too early. There are various factors that have played a major role in these businesses, energy being one, frozen credit lines; cost of goods sold has gone up, etc.

So, what should we do? Control your costs. You will need to take charge of your entity and re-negotiate your contracts from your lease payments to vendors who provide goods or services to your business. Don’t wait till the last moment to make important decisions, a procrastinator does more harm than good in any scenario. If the energy cost is cheaper in the evenings then during peak hours, learn to use less energy during those times.

During times of economic hardships, people still buy. Their buying habits may change a little and it is you who has to learn what their needs are and to market your product or service to meet their needs. Perhaps even offer new lines of products to your customers and engage them in your products such as sampling, or promotions, etc.

My Thoughts: Keep Marketing! Evaluate what channels of marketing on effective and efficient, and forego the ones that are not producing returns. One of the biggest mistakes most business do is cut their marketing budget especially in times of financial turmoil. So Keep Selling with a Big Smile. Ear to Ear!

Rahim Thawer / CEO of Waterbury Financial Strategies Inc http://www.waterburyfs.com

About the Author

CEO & Founder of Waterbury Financial Strategies Inc.

By Forex Signs, Inc. – During yesterday’s trading event, the USDJPY pair has been brewing along the bullish trend channel, and is anticipated to stay behind this pattern for the following session. For today’s American trading session, though a potential short term consolidation has been anticipated in the forthcoming light trading, a bullish trend channel is still seen noticeable along the H1 price chart, as the Simple MA (65) moves along the uptrend pathway of the price. Meanwhile, the RSI (14) at the same price chart still head towards the overbought position whereas the Momentum indicator bottoms and turns up, thus stimulating a potential buying momentum with a succeeding bullish proposal. As of the moment, traders in a buying bias could assume a prospective gain in the subsequent events, with these hints of bullishness presented.

American Session Outlook

With the increased in the Thomson Reuters/University of Michigan final index of consumer sentiments to 71.6, greenback may likely to spur against its major counterparts on the following session.

As of the moment, retailers are projecting a better holiday shopping period and thus increasing the discounts to attract more consumers. If ever this continues, optimism in the investors’ outlook may strengthen up, making the economic activity to grow further within the industry.

Apart from that, recovery really looks visible within the parameters as wages and salaries keep on mounting, confirming a good buying momentum for the upcoming trading session.

So far, most part of the economic numbers in the U.S. had been good and there’s some degree of resolution of the Irish crisis. US economy is recovering and following session may certainly be better, specifically this Christmas season.

Consumer Sentiment Boost the Greenback

Yesterday, the greenback had seen to strengthen up against its major counterparts, since the Americans increased its spending for the fifth month in October and had filed the fewest unemployment claims in more than two years during the previous events.

In America, as the fourth quarter began, largest part of the economy may continuously strengthen up by the consumer sentiment that reflects increases, which are better-than-forecast, thus boosting the outlook for holiday-season’s spending condition.

Apart from that, recovery really looks visible within the parameters as wages and salaries keep on growing, confirming a good buying momentum for the upcoming trading session.

And with the median estimate of 77 economists called for a 0.5 percent advance in consumer spending, unemployment claims may follow the projected fall to 435,000.

So far, fascinating estimations in the market force may be regarded as the key driver for the greenback to sustain itself away from bearishness for the upcoming session.

About the Author

Forex Signs, Inc., Founded in 2006 in Wall Street, New York City, FSI relentlessly strives to be the premier Forex brokerage company in the industry by providing exclusive and unmatched trading and investment related services while constantly developing innovative solutions that cater to the vast requirements of both individual and institutional market participants.

By Danielle Franklin

Choosing the right forex broker is a rollercoaster adventure for every new trader. To make the process less traumatic, it is necessary to check for the certain features which separate reputable broker from a trouble-maker. Is Your Broker Worth Trading With?

1. Regulation

In most cases, regulated broker is your best shot. Regulation authorities are NFA (National Futures Association), CFTA (Commodity Futures Trading Association), SAEC (Securities and Exchange Commission) and others. Regulated broker has no reason to hide it and therefore you will be able to find the regulated authority on the front page of the broker’s website. In case you cannot find it anywhere on the site – most likely the broker is not regulated.

2. Lot Size

Flexible lot size gives a trader a chance to try out all of kind of strategies. Not all brokers are generous, but those who offer mini accounts along with standard accounts are a good pick.

Why mini accounts are useful? Mini accounts are great for beginners who switch from demo trading to the real thing. While you trade with the lowest chances of loosing lots of money, you have an opportunity to test your strategies on the real market. Later on you can always move on and upgrade to the standard account and trade larger sums.

3. Leverage

With most brokers, you will be presented with several leverage options starting from 1:50 and up to 1:500. Keep in mind that very high leverage is not advisable, because despite the ability to earn big, there is also a higher risk of falling all the way down to nothing.

4. Spread

A good broker shouldn’t offer spreads that swing higher than 5 pips on the majors. Stay away from the brokers that offer 10 pips and higher.

5. Support

Customer support is crucial for every trader – whether for technical or trading issues. Not only the presence of support, but also the efficiency and the quality are important. Try contacting the broker via all the listed support options – online chat, phone, email etc.

6. Trading Features

Forex broker should offer a professional trading platform along with technical analysis tools, real-time charts, data feeds and news. Also, let’s not forget the free demo account for practicing – brokers that do not offer a simulator is most likely a total scam.

About the Author

Forex Brokers – Forex brokers reviews and rating, comprehensive forex tutorials and articles, latest forex news and forex blog.

Forex Broker Reviews – Top forex brokers reviews, latest bonuses and promotions, free forex tutorial and more.

Forex Directories

Zhou Xiaochuan, governor of the People’s Bank of China, believes that the openness of debt capital market will greatly contribute to the foundation of a more mature market-oriented economy at a time when China expects more speculative investment inflow after the second round of quantitative easing by the U.S. Federal Reserve.

Zhou cast his “pool” theory on November 16 while attending the China Global Debt Capital Markets Congress co-hosted by the People’s Bank of China and the National Association of Financial Market Institutional Investors, in response to the concern of hot money inflows. Zhou said that China hopes to build up a “pool” where most of the speculative capital flows, instead of letting the excess money flood into the country’s real economy.

While people wonder whether the pool should be placed in the stock or real estate market, the two major markets where the speculators seem most likely to go, Vice President Ba Shusong of the State Counci’s Research Center of Finance says it is more possible that China is building up the pool in the bond market.

When compared to the fluctuating stock and real estate markets, Ba believes that the stable bond market, if reformed and regulated to attract most of so-called hot money, will work better for the future development of China’s real economy. Ba also points out that although it usually takes longer for the bond market to have massive profit return, a “pool” in this market supported by new opening-up policies will still be attractive to investors since there are no legal channels yet for foreign speculators to invest in China’s stock or real estate markets. Ba suggests the pool should be a special area in the bond market selling distinct bond products to foreign investors.

Zhou Xiaochuan also expressed his concern for the excessive administrative regulations in China’s debt capital market. He says the government needs to reduce redundant intervention and carry on with market-oriented reforms to ensure the robust development of the country’s debt capital market. Zhou also confirms that China’s bond market should primarily be an over-the-counter market and mainly deal with institutional investors.

China’s bond market is growing into the second largest in Asia, and the world’s sixth, but Zhou points out that the market desires more development in risk control, diversity in financial products and institutional investors, market liquidity, market-oriented pricing, credence evaluation and regulations.

The government needs to improve the efficiency of bond issuing to meet the massive demands in the future open market, a banker working in a major investment bank told Sina.com.

About the Author

This article was written for China business news site, China-Briefing.com, which was founded by Chris Devonshire-Ellis.

Chris Devonshire-Ellis also founded 2point6billion.com and India-Briefing.com

By James McKee

So many people are concerned with losing money when they begin to take an interest in the Forex currency exchange. This is definitely a valid fear and one that should be addressed constructively and not simply be dismissed. I would suggest that anyone who is entering the Forex market as a potential trader not jump into a live account immediately; this can (and usually will) result in an empty account. Your best bet is to always start out on a demo account and this will enable you to test out new techniques you learn prior to putting up an investment.

Many new comers view demo trading not as saved money but lost revenue, this is not the right way to interpret your training. Forex is an “overall” type of investment and there will be good days and bad days. The professionals who make consistent profit win more often than they lose, but make no mistake they do lose trades…and you will too. You should never let this fact scare you, indeed you should embrace it as the cost of doing business and keep it at the forefront of your mind. Running away from losses is a poor decision because when you incur losses it will be far more of a blow both emotionally and financially.

A lot of people tell me that they have a hard time finding forex books in libraries and I can vouch for this personally. You should be of the fact that a book does not have to have the word Forex on the cover to be useful to a trader. Sun Tzu’s the Art of War and various other books about philosophy, psychology and military strategy can be invaluable to approaching the market with a great mindset which is necessary to succeed in the market.

About the Author

Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.

By CountingPips.com

The U.S. dollar traded higher in forex trading this week against the other major currencies as the American currency was the beneficiary of risk aversion. Market jitters were triggered this week by a military clash between North and South Korea as well as debt fears in the Eurozone, particularly in Ireland, Spain and Portugal.

The dollar rode the risk aversion higher versus the euro for a third straight week as the euro (EUR/USD pair) fell to its lowest exchange rate since September 21st at the 1.302 level. The dollar also increased for the week versus the Swiss franc, British pound sterling, Canadian dollar and New Zealand dollar, Australian dollar and the Japanese yen.

The largest gain for the dollar was against the euro with a 431 pip increase for the week followed by a 391 pip advance versus the British pound sterling (see chart). The dollar also rose by over 200 pips against the Australian dollar and the New Zealand dollar.

The dollar gained ground for a third straight week against the British pound, the Canadian dollar and the Swiss franc.

The Japanese yen, meanwhile, lost ground for the fourth straight week versus the U.S. dollar with an approximate 48 pip shortfall. The USD/JPY pair now trades at the 84.02 exchange rate after declining to a low at the 80.22 exchange rate on October 31st.

Looking ahead to next week, there are many major economic news releases on the economic calendar.

Major releases include:

• US non-farm payrolls report
• European Central Bank interest rate decision
• Canada’s GDP, employment and current account data
• Eurozone’s GDP report, retail sales data and consumer price index
• Switzerland’s GDP report
• US ISM manufacturing report
• Australia’s GDP report, retail sales data and current account data
• Japan’s retail sales data

Have a great weekend!

By James McKee

The Euro has seen its fair share of trouble in the last 48 hours between renewed concerns about Greece and growing uncertainty about the effect the bailout of Ireland will have on the Euro Zone. Investors are running scared in light of this new information and are not likely to return to the AUD, NZD, or EUR until this situation has been sorted out to some extent. Despite these troubles the USD has managed to still fall against the EUR, possibly due to the fact that the USD is undergoing its own troubles from the recent actions of the Federal Reserve Bank in an effort to provide quantitative easing.

Problems in both the US and Europe are growing to fruition as austerity measures are being imposed in both countries. The austerity measures in the United States have not been fully realized as of yet but if the US dollar continues to drop in value there are sure to be serious modifications to the level of effort being made to curb spending. The Great British pound has been doing remarkably well recently and it would be a good idea to use the GBP paired with any Euro Zone currency provided you can apply due diligence during the trade. The Forex currency exchange is a rather scary place at the moment and should not be treaded into lightly.

Austerity measures, quantitative easing and other efforts are sure to result in inflation in no time at all. The countries who are not practicing this behavior (or are at least doing it less) will be the ones to bet on in the near future. Intraday trading of any type is not advisable currently in light of the severe instability across the board of every major currency. The minor currencies would also be a bad idea to jump into for a long period since most of them are dependent on the US dollar which is having its own woes.

About the Author

Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.