One of the things I'm thinking about in 2009 is how Google can be even more transparent and communicate more. That led me to a personal goal for 2009: if I give a substantial conference presentation (not just a question and answer session), I'd like to digitize the talk so that people who couldn't attend the conference can still watch the presentation.
In that spirit, here's a belated holiday present. In November 2008 I spoke on a panel about "Preventing Virtual Blight" at the Web 2.0 Summit in San Francisco. A few weeks later I ended up recreating the talk at the Googleplex and we recorded the video. In fact, this is a "director's cut" because I could take a little more time for the presentation. Here's the video of the presentation:
And if you'd like to follow along at home, I'll include the actual presentation as well:
You can also access the presentation directly. By the way thanks to Wysz for recording this not just on a shoestring budget but for free. I think we've got another video ready to go pretty soon, too.
Sunday, November 29, 2009
Introducing the Google Webmaster Central YouTube Channel
In his State of the Index presentation, Matt Cutts said that one of the things to look for from Google in 2009 is continued communication with webmasters. On the Webmaster Central team, we've found that using video is a great way to reach people. We've shown step-by-step instructions on how to use features of Webmaster Tools, shared our presentations with folks who were unable to make it to conferences, and even taken you through a day in the life of our very own Maile Ohye as she meets with many Googlers involved in webmaster support.
We plan on releasing more videos like these in the future, so we've opened up our own channel on YouTube to host webmaster-related videos. Our first video is already up, and we'll have more to share with you soon. If you want to be the first to know when we release something new, you can subscribe to us using your YouTube account, or grab this RSS feed if you'd like to keep track in your feed reader. Please let us know how you like the channel, and use the comments in this post to share your ideas for future videos.
And while we'll all do our best to make sure Matt Cutts understands that Rick Rolling is so last year, be careful where you click on April 1st.
We plan on releasing more videos like these in the future, so we've opened up our own channel on YouTube to host webmaster-related videos. Our first video is already up, and we'll have more to share with you soon. If you want to be the first to know when we release something new, you can subscribe to us using your YouTube account, or grab this RSS feed if you'd like to keep track in your feed reader. Please let us know how you like the channel, and use the comments in this post to share your ideas for future videos.
And while we'll all do our best to make sure Matt Cutts understands that Rick Rolling is so last year, be careful where you click on April 1st.
Canonical Link Element: presentation from SMX West
Wednesday, February 25, 2009 at 6:50 AM
A little while ago, Google and other search engines announced support for a canonical link element that can help site owners with duplicate content issues. I recreated my presentation from SMX West and you can watch it below:You can access the slides directly or follow along here:
By the way, Ask just announced that they will support the canonical link element. Read all about it in the Ask.com blog entry.
Thanks again to Wysz for turning this into a great video.
Thanks again to Wysz for turning this into a great video.
In fact, you might not have seen it, but we recently created a webmaster videos channel on YouTube. If you're interested, you can watch the new webmaster channel. If you subscribe to that channel, you'll always find out about new webmaster-related videos from Google.
Google Webmaster Help Forums in more languages
Thursday, April 30, 2009 at 10:48 AM
Traditionally when we launch a new communication channel, we also give the shareholders a chance to introduce themselves. We did so when we opened webmaster help communities for European webmasters almost two years ago, and also more than a year ago, when we were able to expand and add groups in three more languages. Last December we were very happy to announce the re-launch of two of our Help Forums in a new and cool look and feel.Today, we're happy to announce that we keep on increasing the global dialogue with webmasters, opening an Arabic and a Czech/Slovak Webmaster Help Forum. Furthermore, we would like to highlight the support we offer in Chinese, Japanese, and Korean. While we've offered support to Chinese webmasters for a little more than a year, the Japanese and Korean forums are only a few weeks old. Keeping with tradition, the guides monitoring our new forums would like to introduce themselves to the global webmaster family:
Arabic Webmaster Help Forum
مرحبا! My name is Adel and I'll be monitoring the Arabic Webmaster Help Forum. I'm originally from Beirut, Lebanon. After finishing computer science studies, I joined Google, some 18 months ago.
Besides working on search quality in Arabic and building a community on our forum, I enjoy traveling and listening to really loud heavy metal music; sometimes I get to do both at the same time! ;-)
I am looking forward to a lot of questions regarding Arabic Google Search and of course ranking and indexing issues on your sites to come. I hope I'll see you there soon!
- Adel
Czech/Slovak Webmaster Help ForumZdravím! I am Marcel, the Google Guide on the Czech/Slovak Webmaster Help Forum. I am originally from Slovakia. After graduating in New Media and Industrial Design, it took me some time and traveling around the globe before moving to Dublin and eventually joining Google some 3 years ago.
Ever since, I've been working in different teams. I was lucky to be part of the AdSense team where I participated in launching AdSense for Content for Czech and Slovak. Since my transition to Search Quality, I enjoy working on improving the quality of our natural search results in Czech, Slovak, and Polish.
Besides my work I have a few more passions, such as listening to live music in Irish pubs, challenging my colleagues in occasional Soulcalibur skirmishes on Playstation and testing burger places all over the world :-) If you want to discuss any of these topics or maybe something about your sites, please join the community. I am looking forward to meeting you there :-)
- Marcel
Chinese Webmaster Help Forum你 好! Hi from the Chinese Webmaster Help Forum team! The Chinese Webmaster Help Forum has received great support from webmasters since its launch in March 2008. In March 2009, the Chinese Webmaster Help Forum moved to a new system with many more user-friendly features for better information sharing. It has become a good platform for webmasters to share their knowledge of Google search and Webmaster Tools and to communicate with Google.
The Chinese Forum now has 6 Google Guides: Xiang (降龙十巴掌), Eric (趙錢孫李), Marina (小馬過河), Chris (城镇), Hyson (草帽路飞), and Fa (法人戴表). We are from many different provinces of mainland China. When not spending time in the forum, we enjoy playing ping-pong and foosball in the office. A few of us are huge video game fans. You may learn more about us when you participate in the forum :)
A big thank you to everyone who has taken part in forum discussions! We hope to see both familiar faces and newcomers join in the Chinese Webmaster Help Forum!
- Xiang (降龙十巴掌), Eric (趙錢孫李), Marina (小馬過河), Chris (城镇), Hyson (草帽路飞), and Fa (法人戴表)
Japanese Webmaster Help Forum
こんにちは! Hello from the Japanese Webmaster Help Forum team! Our names are Nao ( なお ), Kaede ( 楓 ), Haru ( ハル ), and Kyotaro. We are the four guides working in Google Search Quality for Japanese. We've just launched our forum on March 6th.
All of us were born in Japan and grew up here. Nao has also lived in Greece, the Netherlands, and New York. Haru is from the west side of Japan, which is known for its talkative culture and traditional Japanese comedy. Maybe you will read Haru's unique communication on our forum :)
As for our interests, we love eating and drinking! Between posting on the forum, we enjoy Google's excellent lunches and sweets a lot. After working, of course, we sometimes go out for a drink with our team members :) Kaede knows all the nice bars in Tokyo.
Nao and Kyotaro love Sumo wrestling. We've watched two tournaments this year with Googlers from other locations. Haru, of course, loves watching comedies!
We are really excited and happy to see many users joining our forum and sharing tips with each other. Looking forward to seeing you there!
- Nao ( なお ), Kaede ( 楓 ), Haru ( ハル ), and Kyotaro
Korean Webmaster Help Forum안 녕하세요! Hello everyone, my name is Joowon and I work in Google Search Quality for Korean. I was born in Germany and lived in Korea for a few years before moving to Hawaii, California and New York to attend high school and college. After all that traveling, I'm only fluent in Korean and English, with a bit of proficiency in Japanese. Some of the interests I've developed over the years are design, wine, cooking, yoga, and sustainability issues.
Currently I'm back in Seoul and enjoying the dynamic atmosphere here, with lots of interesting people and great food. The Korean Webmaster Help Forum was launched only a few weeks ago, and I'm very much looking forward to talking to all of you. See you in the forum!
- Joowon
Hello world! ;) I am Andrew and I am part of the Search Quality team in Seoul. I grew up in a port city in the southern part of Korea. Ironically, I don't eat seafood because it looks scary to me :( Many of my friends and colleagues love to make jokes about that, but I still don't eat any seafood yet. Playing drums, traveling and photography are my main interests. Currently I'm a drummer of "Spring Fingers", the first band of Google Korea, and we'll have our first concert at the end of April!
I love playing around with web technologies/APIs and find it very exciting to exchange information and ideas on the web. The Korean Webmaster Help Forum was recently launched and I hope to see you there!
- Andrew
If you're curious about our Webmaster Help Forums in other languages, please feel free to peak in. Here's a list of our currently monitored Webmaster Help Forums: Arabic, Chinese, Czech/Slovak, Dutch, Danish, English, Finnish, French, German, Hebrew, Hungarian, Italian, Japanese, Korean, Polish, Portuguese, Russian, Spanish, Swedish, and Turkish.
'Latest software version' notifications for your site
Friday, November 20, 2009 at 9:30 AM
Webmaster level: AllOne of the great things about working at Google is that we get to take advantage of an enormous amount of computing power to do some really cool things. One idea we tried out was to let webmasters know about their potentially hackable websites. The initial effort was successful enough that we thought we would take it one step further by expanding our efforts to cover other types of web applications—for example, more content management systems (CMSs), forum/bulletin-board applications, stat-trackers, and so on.
This time, however, our goal is not just to isolate vulnerable or hackable software packages, but to also notify webmasters about newer versions of the software packages or plugins they're running on their website. For example, there might be a Drupal module or Joomla extension update available but some folks might not have upgraded. There are a few reasons a webmaster might not upgrade to the newer version and one of the reasons could be that they just don't know a new version exists. This is where we think we can help. We hope to let webmasters know about new versions of their software by sending them a message via Webmaster Tools. This way they can make an informed decision about whether or not they would like to upgrade.
One of the ways we identify sites to notify is by parsing source code of web pages that we crawl. For example, WordPress and other CMS applications include a generator meta tag that specifies the version number. This has proven to be tremendously helpful in our efforts to notify webmasters. So if you're a software developer, and would like us to help you notify your users about newer versions of your software, a great way to start would be to include a generator meta tag that tells the version number of your software. If you're a plugin or a widget developer, including a version number in the source you provide to your users is a great way to help too.
We've seen divided opinions over time about whether it's a good security practice to include a version number in source code, because it lets hackers or worm writers know that the website might be vulnerable to a particular type of exploit. But as Matt Mullenweg pointed out, "Where [a worm writer's] 1.0 might have checked for version numbers, 2.0 just tests [a website's] capabilities...". Meanwhile, the advantage of a version number is that it can help alert site owners when they need to update their site. In the end, we tend to think that including a version number can do more good than harm.
We plan to begin sending out the first of these messages soon and hope that webmasters find them useful! If you have any questions or feedback, feel free to comment here.
One million YouTube views!
Wednesday, October 21, 2009 at 12:34 PM
Earlier this year, we launched our very own Webmaster Central channel on YouTube. Just today, we saw our total video views exceed one million! On the road to this milestone, we uploaded 154 videos, for a total of nearly 11 hours of webmaster-focused media. These videos have brought you conference presentations, updates on tools for webmasters, general tips, and of course answers to your "Grab bag" questions for Matt Cutts.To celebrate our one million views, we're sharing a fun video with you in which Matt Cutts shows us what happened when he lost a bet with his team:
We're also pleased to announce that we've added captions to all of our videos and plan to do so for our future videos as well. Thank you to everyone who has watched, shared, and commented on our videos. We look forward to the next million views!
Spanish Site Clinic now live
Thursday, September 17, 2009 at 6:09 AM
The Google Webmaster Central blog in Spanish has launched a Site Clinic especially for the Spanish-speaking market. We're offering to analyze a series of websites in order to share some best practices with our community using real web sites. The plan is to offer constructive advice on accessibility and improvements that can lead to better visibility in Google's search results.
Posted by Esperanza, Search Quality Team
Webmaster Central YouTube update for July 6th - 10th
Monday, July 13, 2009 at 5:55 PM
Want to see what's new on the Webmaster Central YouTube channel? Check out the answers to the latest Grab Bag questions:
Below is Matt's clarification about Google's use of the meta description tag:
Feel free to leave comments letting us know how you liked the videos, and if you have any specific questions, ask the experts in the Webmaster Help Forum.
GENERIC CIALIS on my website? I think my site has been hacked!
Thursday, November 26, 2009 at 3:23 AM
How to use "Fetch as Googlebot", part 1Webmaster level: Intermediate
Has your site ever dropped suddenly from the index or disappeared mysteriously from search results? Have you ever received a notice that your site is using cloaking techniques? Unfortunately, sometimes a malicious party "hacks" a website: they penetrate the security of a site and insert undesirable content. Sophisticated attackers can camouflage this spammy or dangerous content so that it doesn't appear for normal users, and appears only to Googlebot, which could negatively impact your site in Google's results.
In such cases it used to be very difficult to detect the problem, because the site would appear normal in the eyes of the user. It may be possible that only requests with a User-agent: of Googlebot and coming from Googlebot's IP could see the hidden content. But that's over: with Fetch as Googlebot, the new Labs feature in Webmaster Tools, you can see exactly what Googlebot is seeing, and avoid any kind of cloaking problems. We'll show you how:
Let's imagine that Bob, the administrator of www.example.com, is searching for his site but he finds this instead:
That's strange, because when he looks at the source code of www.example.com, it looks fine:
With much surprise Bob may receive a notice from Google warning him that his site is not complying with Google's quality guidelines. Fortunately he has his site registered with Webmaster Tools, let's see how he can check what Googlebot sees:
First Bob logs into Webmaster Tools and selects www.example.com. The Fetch as Googlebot feature will be at the bottom of the navigation menu, in the Labs section:
The page will contain a field where you can insert the URL to fetch. It can also be left blank to fetch the homepage.
Bob can simply click Fetch and wait a few seconds. After refreshing the page, he can see the status of the fetch request. If it succeeds, he can click on the "Success" link...
...and that will show the details, with the content of the fetched page:
Aha! There's the spammy content! Now Bob can be certain that www.example.com has been hacked.
Confirming that the website has been hacked (and perhaps is still hacked) is an important step. It is, however, only the beginning. For more information, we strongly suggest getting help from your server administrator or hoster and reading our previous blog posts on the subject of hacked sites:
- My site's been hacked - now what?
- A quick security checklist for webmasters
- Message center warnings for hackable sites
- Best practices against hacking
If you have any questions about how to use the Fetch as Googlebot feature, feel free to drop by the Webmaster Help Forum. If you feel that your website might be hacked but are having problems resolving it, you might want to ask the experts in our "Malware and Hacked sites" category.
Get your website ready for the holidays: Webmasters - make your list and check it twice!
Are the holidays an important season for your website or online business? We think so! And to help make sure you're in good shape, we wanted to invite you to our Holiday Webmaster Webinar.
This Webex will be hosted by Senior Search Quality Engineer Greg Grothaus, and AdWords Evangelist Fred Vallaeys. They'll be discussing a range of webmaster best practices and useful Google tools followed by a Q&A session to make sure you and your site are well primed for the holiday rush!
Topic: Holiday Webmaster Webinar
Date: Friday, November 13, 2009
Time: 10:00 am, Pacific Standard Time (GMT -08:00, San Francisco)
Meeting Number: 574 659 815
Meeting Password: webmaster
Please click the link below to see more information, or to join the meeting.
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To join the online meeting (Now from iPhones too!)
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1. Go to https://googleonline.webex.com/googleonline/j.php?ED=133402392&UID=0&PW=db339c4e641e0f525412171e5646
2. Enter your name and email address.
3. Enter the meeting password: webmaster
4. Click "Join Now".
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To join the teleconference only
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Call-in toll-free number (US/Canada): 866-469-3239
Call-in toll number (US/Canada): 1-650-429-3300
Toll-free dialing restrictions: http://www.webex.com/pdf/tollfree_restrictions.pdf
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For assistance
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1. Go to https://googleonline.webex.com/googleonline/mc
2. On the left navigation bar, click "Support".
This Webex will be hosted by Senior Search Quality Engineer Greg Grothaus, and AdWords Evangelist Fred Vallaeys. They'll be discussing a range of webmaster best practices and useful Google tools followed by a Q&A session to make sure you and your site are well primed for the holiday rush!
Topic: Holiday Webmaster Webinar
Date: Friday, November 13, 2009
Time: 10:00 am, Pacific Standard Time (GMT -08:00, San Francisco)
Meeting Number: 574 659 815
Meeting Password: webmaster
Please click the link below to see more information, or to join the meeting.
-------------------------------------------------------
To join the online meeting (Now from iPhones too!)
-------------------------------------------------------
1. Go to https://googleonline.webex.com/googleonline/j.php?ED=133402392&UID=0&PW=db339c4e641e0f525412171e5646
2. Enter your name and email address.
3. Enter the meeting password: webmaster
4. Click "Join Now".
-------------------------------------------------------
To join the teleconference only
-------------------------------------------------------
Call-in toll-free number (US/Canada): 866-469-3239
Call-in toll number (US/Canada): 1-650-429-3300
Toll-free dialing restrictions: http://www.webex.com/pdf/tollfree_restrictions.pdf
-------------------------------------------------------
For assistance
-------------------------------------------------------
1. Go to https://googleonline.webex.com/googleonline/mc
2. On the left navigation bar, click "Support".
Video Tutorial: Google for Webmasters
Wednesday, October 15, 2008 at 12:45 PM
We're always looking for new ways to help educate our fellow webmasters. While you may already be familiar with Webmaster Tools, Webmaster Help Discussion Groups, this blog, and our Help Center, we've added another tutorial to help you understand how Google works. Hence we've made this video of a soon-to-come presentation titled "Google for Webmasters." This video will introduce how Google discovers, crawls, indexes your site's pages, and how Google displays them in search results. It also touches lightly upon challenges webmasters and search engines face, such as duplicate content, and the effective indexing of Flash and AJAX content. Lastly, it also talks about the benefits of offerings Webmaster Central and other useful Google products.Take a look for yourself.
Discoverability:
Accessibility - Crawling and Indexing:
Ranking:
Webmaster Central Overview:
Other Resources:
Google Presentations Version:
http://docs.google.com/Presentation?id=dc5x7mrn_245gf8kjwfx
Important links from this presentation as they chronologically appear in the video:
Add your URL to Google
Help Center: Sitemaps
Sitemaps.org
Robots.txt
Meta tags
Best uses of Flash
Best uses of Ajax
Duplicate content
Google's Technology
Google's History
PigeonRank
Help Center: Link Schemes
Help Center: Cloaking
Webmaster Guidelines
Webmaster Central
Google Analytics
Google Website Optimizer
Google Trends
Google Reader
Google Alerts
More Google Products
Special thanks to Wysz, Chark, and Alissa for the voices.
Written by Evan Tang, Search Quality
The Best practices when moving your website
Wednesday, April 16, 2008 at 1:55 PM
Planning on moving your site to a new domain? Lots of webmasters find this a scary process. How do you do it without hurting your site's performance in Google search results?
Your aim is to make the transition invisible and seamless to the user, and to make sure that Google knows that your new pages should get the same quality signals as the pages on your own site. When you're moving your site, pesky 404 (File Not Found) errors can harm the user experience and negatively impact your site's performance in Google search results.
Let's cover moving your site to a new domain (for instance, changing from www.example.com to www.example.org). This is different from moving to a new IP address; read this post for more information on that.
Here are the main points:
- Test the move process by moving the contents of one directory or subdomain first. Then use a 301 Redirect to permanently redirect those pages on your old site to your new site. This tells Google and other search engines that your site has permanently moved.
- Once this is complete, check to see that the pages on your new site are appearing in Google's search results. When you're satisfied that the move is working correctly, you can move your entire site. Don't do a blanket redirect directing all traffic from your old site to your new home page. This will avoid 404 errors, but it's not a good user experience. A page-to-page redirect (where each page on the old site gets redirected to the corresponding page on the new site) is more work, but gives your users a consistent and transparent experience. If there won't be a 1:1 match between pages on your old and new site, try to make sure that every page on your old site is at least redirected to a new page with similar content.
- If you're changing your domain because of site rebranding or redesign, you might want to think about doing this in two phases: first, move your site; and second, launch your redesign. This manages the amount of change your users see at any stage in the process, and can make the process seem smoother. Keeping the variables to a minimum also makes it easier to troubleshoot unexpected behavior.
- Check both external and internal links to pages on your site. Ideally, you should contact the webmaster of each site that links to yours and ask them to update the links to point to the page on your new domain. If this isn't practical, make sure that all pages with incoming links are redirected to your new site. You should also check internal links within your old site, and update them to point to your new domain. Once your content is in place on your new server, use a link checker like Xenu
to make sure you don't have broken legacy links on your site. This is especially important if your original content included absolute links (like www.example.com/cooking/recipes/chocolatecake.html) instead of relative links (like .../recipes/chocolatecake.html).
- To prevent confusion, it's best to make sure you retain control of your old site domain for at least 180 days.
- Add your new site to your Webmaster Tools account, and verify your ownership of it. Then create and submit a Sitemap listing the URLs on your new site. This tells Google that your content is now available on your new site, and that we should go and crawl it.
- Finally, keep both your new and old site verified in Webmaster Tools, and review crawl errors regularly to make sure that the 301s from the old site are working properly, and that the new site isn't showing unwanted 404 errors.
Sunday, November 22, 2009
Forex News
Forex Turnover
Main foreign exchange market turnover, 1988 - 2007, measured in billions of USD.
Currencies
List of most popular currencies on the Forex market
Forex News
What is Forex?
If you would go out on a dinner with your friends or family and you mentioned that you were trading on the Forex market most of them wouldn’t know what you were talking about. The worst thing is that most of the Forex traders that join the Forex market don’t know what they are doing. Understanding what Forex is, is the first good step to your success at Forex trading.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. Forex 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 world over countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system till 1971.
Today, the Forex 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 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. Since then, the market has continued to grow. According to Euromoney's annual Forex Poll, volumes grew a further 41% between 2007 and 2008.
Forex News
Pound Tumbles, Dollar Surges as Risk Aversion Hits Currency Markets (Euro Open)
The US Dollar surged higher to start the trading week as stocks sold off across Asian exchanges, boosting demand for the safety-linked currency. The British Pound bore the brunt of the greenback’s assault as risk aversion compounded last week’s dovish rhetoric from the Bank of England.
Key Overnight Developments
• Pound Tumbles Despite BOE Backtracking on King’s Comments
• Japanese Yen Surges on Safety Demand as Stocks Plunge in Asia
Critical Levels
The British Pound and the Euro both suffered sharp losses in overnight trading as stocks tumbled in Asia, driven lower by Friday’s disappointing US economic data, sending the MSCI Asia Pacific regional benchmark index down 1.2% and boosting demand for the safety-linked US Dollar.
Asia Session Highlights
The British Pound raced sharply lower in early trading as currency markets seemingly concluded that the Bank of England suspiciously “protests too much” after the UK Times Online cited unnamed sources at the central bank as saying King was trying to talk down sterling last week. The Pound began to accelerate lower last Monday after the BOE released an article titled “Interpreting Recent Movements in Sterling” as part of its quarterly bulletin which argued that the inability of drying up capital inflows to finance the current account deficit could mean a fall in the “the long-run sustainable real exchange rate”. Sterling bears were given extra fuel last Thursday when Governor Mervyn King said rebalancing the UK economy was “very necessary [and] the fall in the exchange rate that we have seen will be helpful to that process” in an interview with The Journal.
Reserve Bank of Australia Governor Glenn Stevens struck a hawkish tone at a testimony to the Senate Committee in Sydney. Stevens said that Australia’s recession has been mild and the economy has done “quite well” as government stimulus “materially” supported growth, adding 2-3% to local demand. On interest rates, Stevens said that benchmark borrowing costs are “unusually low” and will need to go back to normal levels, adding that inflation targeting will guide the timing of adjustment to “more normal levels”.
Euro Session: What to Expect
A preliminary estimate of Germany’s Consumer Price Index is set to show that prices fell -0.2% in the year to September, marking the third consecutive month that the EU-harmonized metric has printed in negative territory. A reading in line with expectations is unlikely to prove market-moving: economists have called for year-on-year CPI to shrink -0.3% through the third quarter, and averaging September’s would-be reading with those recorded in the previous two months yields just about that outcome. The coming months present an opportunity for volatility, however: consensus forecasts have inflation coming back into positive territory in the fourth quarter and averaging around 1.2% through 2010; if this proves too rosy as the economy falters anew after the boost from fiscal stimulus (both at home and abroad) and the inventory cycle fizzles out, a drop in inflation expectations stands to prolong the slump in the Euro Zone’s largest economy. Indeed, consumers and businesses have little incentive to spend and invest in the present if they reckon prices will be lower in the future, bringing economic activity to a standstill. This will mean the ECB will keep interest rates at current lows longer than nearly all of its major counterparts (with the exception of Japan and Switzerland), weighing down the Euro.
Written by Ilya Spivak, Currency Analyst
Article Source - Pound Tumbles, Dollar Surges as Risk Aversion Hits Currency Markets (Euro Open)
Key Overnight Developments
• Pound Tumbles Despite BOE Backtracking on King’s Comments
• Japanese Yen Surges on Safety Demand as Stocks Plunge in Asia
Critical Levels
The British Pound and the Euro both suffered sharp losses in overnight trading as stocks tumbled in Asia, driven lower by Friday’s disappointing US economic data, sending the MSCI Asia Pacific regional benchmark index down 1.2% and boosting demand for the safety-linked US Dollar.
Asia Session Highlights
The British Pound raced sharply lower in early trading as currency markets seemingly concluded that the Bank of England suspiciously “protests too much” after the UK Times Online cited unnamed sources at the central bank as saying King was trying to talk down sterling last week. The Pound began to accelerate lower last Monday after the BOE released an article titled “Interpreting Recent Movements in Sterling” as part of its quarterly bulletin which argued that the inability of drying up capital inflows to finance the current account deficit could mean a fall in the “the long-run sustainable real exchange rate”. Sterling bears were given extra fuel last Thursday when Governor Mervyn King said rebalancing the UK economy was “very necessary [and] the fall in the exchange rate that we have seen will be helpful to that process” in an interview with The Journal.
Reserve Bank of Australia Governor Glenn Stevens struck a hawkish tone at a testimony to the Senate Committee in Sydney. Stevens said that Australia’s recession has been mild and the economy has done “quite well” as government stimulus “materially” supported growth, adding 2-3% to local demand. On interest rates, Stevens said that benchmark borrowing costs are “unusually low” and will need to go back to normal levels, adding that inflation targeting will guide the timing of adjustment to “more normal levels”.
Euro Session: What to Expect
A preliminary estimate of Germany’s Consumer Price Index is set to show that prices fell -0.2% in the year to September, marking the third consecutive month that the EU-harmonized metric has printed in negative territory. A reading in line with expectations is unlikely to prove market-moving: economists have called for year-on-year CPI to shrink -0.3% through the third quarter, and averaging September’s would-be reading with those recorded in the previous two months yields just about that outcome. The coming months present an opportunity for volatility, however: consensus forecasts have inflation coming back into positive territory in the fourth quarter and averaging around 1.2% through 2010; if this proves too rosy as the economy falters anew after the boost from fiscal stimulus (both at home and abroad) and the inventory cycle fizzles out, a drop in inflation expectations stands to prolong the slump in the Euro Zone’s largest economy. Indeed, consumers and businesses have little incentive to spend and invest in the present if they reckon prices will be lower in the future, bringing economic activity to a standstill. This will mean the ECB will keep interest rates at current lows longer than nearly all of its major counterparts (with the exception of Japan and Switzerland), weighing down the Euro.
Written by Ilya Spivak, Currency Analyst
Article Source - Pound Tumbles, Dollar Surges as Risk Aversion Hits Currency Markets (Euro Open)
9.27.2009
Forex Weekly Trading Forecast - 09.28.09
US Dollar: Optimistic Economic Outlooks to Meet Hard Facts This WeekFundamental Outlook for US Dollar: Bullish
- The Federal Reserve left rates unchanged, but signaled a more optimistic outlook
- University of Michigan consumer confidence jumped to a 21-month high in September
- US durable goods orders tumbled 2.4% in August, marking the steepest drop since January
The US dollar ended the past week marginally higher after the Federal Reserve issued a more optimistic outlook on the economy. In the coming week, though, there will be a variety of growth indicators on hand that may help to signal whether the US recession really ended in Q2. That said, the US dollar index will have to contend with resistance just above 77.00 at the start of the week, but a break above there will likely coincide with a EURUSD drop below 1.4615.
Looking to the upcoming event risk, on Tuesday, the September reading of the Conference Board’s measure of US consumer confidence is expected to rise up to a one-year high of 57 from 54.1 in August, but overall, there are some upside risks for this report. Indeed, the final reading of the University of Michigan’s consumer confidence index show that sentiment improved greatly in September, with the index hitting a 21-month high of 73.5 from 65.7.
On Wednesday, the third round of US Q2 GDP estimates is due to hit the wires, but the results will only be market-moving if we see surprising revisions. The final reading is forecasted to be revised down to -1.2 percent from -1.0 percent, though this would still represent a sharp improvement from Q1, when GDP plunged 6.4 percent. Readings in line with expectations may not have a very big impact on price action, but better-than-anticipated results could lead carry trades higher, especially in light of speculation that the recession may have ended in Q2.
On Thursday, the ISM manufacturing index is projected to rise for the ninth straight month in September to 54 from 52.9, which would be the highest reading since April 2006. With 50 being the point of neutrality, this would also be the second month that the index signals an expansion in activity, adding to evidence that the sector is experiencing a recovery in business activity. The last release didn’t have much of an impact on the US dollar, as risk aversion dominated the day, leading the currency higher. However, the report will still be useful because of its employment component as a leading indicator for the big news on Friday: US non-farm payrolls.
The US non-farm payrolls (NFPs) index is forecasted to show job losses for the 21st straight month in September, though the rate of decline is anticipated to slow further. At the time of writing, Bloomberg News was calling for NFPs to decline by 187,000, which would be the smallest drop since August 2008. Meanwhile, the unemployment rate is projected to edge up to 9.8 percent from 9.7 percent, but ultimately, the NFP result will be the event to watch as it is extremely volatile and is one of the sole reports that impacts the US dollar from a pure fundamental point of view. A better-than-anticipated result is likely to provide a boost to the US dollar, but it will be interesting to see the impact of disappointing results as weak US data tends to weigh on risky assets and push the greenback higher amidst flight-to-quality.
Euro Shows Early Signs of Reversal – Week Ahead Critical to Trends
Fundamental Forecast for Euro: Neutral
- Euro breaks key technical short-term trendline
- Candlesticks likewise point to a potential Euro reversal
- German IFO improves for sixth month
- Risk trends remain most important EURUSD driver
The Euro showed early signs of technical reversal through an eventful week of trading, setting fresh yearly peaks versus the US Dollar yet finishing lower through Friday’s close. Strong rallies in the US S&P 500 and other key risk barometers led the single currency to impressive highs against most major counterparts. Yet a late-week breakdown in risk sentiment sparked a flight to safety across forex markets—much to the Euro’s detriment. Near-term Euro forecasts will very much depend on the trajectory of said asset classes, and a busy global economic calendar promises no shortage of volatility through the week ahead.
The Euro remains in fairly well-defined 6-month uptrend, and we would hardly argue that several days of declines signal that it has set a major top. Yet it is undeniable that the EUR/USD lost much of its short-term momentum—having broken below short-term technical support and threatening further declines. Fundamentals will likely play a fairly significant role in the days ahead as the combination of German and US Employment figures will shed a great deal of light on economic conditions in both key countries. The reports may confirm recent waves of economic optimism or cut celebrations short. Reasonably steady improvements in fundamental data have made for lofty market forecasts across most economic releases, and a string of disappointments could easily force noteworthy corrections across major financial markets.
Early-week German Consumer Price Index numbers and Euro Zone Consumer Confidence figures could produce surprises, but most traders look forward to market-moving German Unemployment Change figures due Wednesday. Previous results showed unemployment actually fell for the second consecutive month through August, but the numbers were clouded by government stimulus payments inducing firms to keep workers on their payrolls. Forecasts for September results call for a far less sanguine 20k jump in unemployment. Given that Germany is largely considered the bellwether for the broader Euro Zone economy, any disappointments could led to a noteworthy correction in the Euro exchange rate.
Friday’s US Nonfarm payrolls result could likewise have a pronounced effect on Euro pairs. US and European markets have proven especially sensitive to major surprises in the monthly payrolls number. Consensus forecasts call for the eighth-consecutive improvement in the jobs release, and any disappointments could clearly make a dent in broader forecasts for growth out of the world’s largest economy.
The critical question remains whether we can expect further equity market gains. Much like the Euro, the S&P 500 showed early signs of reversal through late-week trade. A continuation of said tumbles could easily force the Euro to move in kind.
Japanese Yen Momentum a Combination of Risk, Intervention and Data
Fundamental Forecast for Japanese Yen: Bullish
- Finance Minister Fujji reiterates his opposition to FX intervention
- Policy officials start reining in the stimulus that has supported the most aggressive rally in decades
- Exports shrink 36 percent in the year through August, exacerbated by sharp appreciation of the yen
The Japanese yen was the biggest mover and gainer amongst the majors this past week – by a long shot. However, we can’t idly attribute this appreciation to risk appetite alone. Indeed, we can see while other risk sensitive assets (equities, bonds funds, commodities, high-yield currencies) have pulled back over the same period; they certainly didn’t do so with the same gusto as the yen. Underlying sentiment no doubt prompted the trend; but early signs of policy withdrawal and confirmation from the new Japanese Finance Minister suggesting the days of FX intervention has passed provided the fuel for momentum. Will the market maintain its bearing and pace? That will depend on three dominant factors: interpretation of the G-20 commitments; weighing the fair value of the yen; and the outlook for the domestic recovery.
While the first concern is related to the G-20 meeting and commitments that were announced this past week, the fundamental relation to the yen is risk appetite. In the six-month rally from anything and everything that can bear a yield above the risk-free assets that traders took shelter in during the worst of the crisis, we have seen an early upsurge in demand for return and an elemental redistribution of capital. There have certainly been earlier adopters to the market reversal and those lured in by the steady capital gains; but most of the inflow of wealth is simply coming from the market sidelines and is seeking an investment with stability and steady returns. It wouldn’t take much to spark fear of a reversal and catalyze a wave of profit taking; but it is the money that is flowing back in for the long haul that will decide the larger trend. Both these short-term and long-term dynamics can be impacted by the G-20’s joint statement and individual government’s efforts going forward. The impressive recovery in market levels this past year is in large part due to the guarantees, liquidity injections and bailouts by the world’s policy makers. It is unclear whether speculator confidence in the balance of risk and reward will be anywhere as strong as it has been without the government safety net. However, with German and the US cutting down its programs last week while the global call for ‘exit strategies’ grows to a roar; we may well be testing those waters soon.
It is generally true that the majors are free-floating currencies and economics indeed sets exchange rates; but perfection only exists in academic theory. In reality, the Japanese yen has carried the burden for potential intervention from the Bank of Japan for years. As a major export nation, the former DPJ administration considered a ‘weak yen’ policy essential to economic stability. However, regimes have changed and new LDP Finance Minister Fujii has explicitly said that the currency should reflect economics. The first time, the policy makers made this statement the week before last, the yen responded with a sharp appreciation. With a reiteration of the same this past week (despite the yen being at relative highs), the currency moved on to another leg of its rally. How much pressure has been priced in due to intervention fears? Only time will tell. What’s more, how will the economy handle this steady appreciation? Domestic demand has long been lacking for Japan.
And, so we round out the story with more domestic considerations. As the currency appreciations, a critical artery of growth is slowly pinched off. In line with the G-20’s commitment to balance savings, domestic demand and trade; Japan will have to compensate for the potential loss in exports with domestic demand at a critical time for the economy. In the midst of a fragile recovery, we will now low to key economic data due over the coming week to see if Japan can lift itself out of its worst recession on record. The 3Q Tankan surveys, industrial production, employment, household spending, housing activity and inflation will offer a thorough assessment.
British Pound Losing its Risk Appeal as Conditions Deteriorate
Fundamental Forecast for British Pound: Bearish
- BoE Mervyn King says the weak pound “will be helpful” in supporting a feeble recovery
- Upcoming spending cuts and speculation of a cut in the deposit rate means the BoE is running out of options
- The Bank of England minutes show a unanimous vote to keep the bond purchasing program at 175 billion pounds
Some of the major currencies are showing strength against some pairs and weakness against others – a sign of underlying currents like risk appetite. However, the British pound was down across the board this past week, and in dramatic fashion. Prominent breakouts are starting to look the establishment of new trends as the struggling fundamental health of the United Kingdom begins to override the appeal the currency once held as a source for high yields. The next few weeks will be critical in establishing where the pound will head, and more importantly, where it fits in the market.
There is no doubt that risk trends will have an impact on what kind of direction and pace the British currency takes. However, it will likely start to be more of a one sided influence. Should risk tumble in the wake of the G-20 meeting as investors worry the capital markets can’t support their own weight without a government safety net, the pound will likely tumble. There is still a latent build up of risk appetite behind this currency that was fed by the belief that the recovery in the global economy and markets would be exceptionally beneficial for the United Kingdom which is generally considered to be the industrialized nation in the worst shape. As the outlook for a speedy recovery and fades, so too does the picture of London retaking its title of financial center of the world. Yet, what happens should sentiment actually improve? Even then, the pound will likely lag or even fade despite the positive turn.
Over the past weeks and months, it has become blatantly clear that Europe’s second largest economy is struggling to pull itself out of its deep recession; and the time frame for a return to growth is being continuously pushed back. Not only did the 2Q GDP numbers tell us that the slump was more intense than initially though; but we have also seen that policy officials are running out of options to support an orderly recovery. This past week, the minutes seemed to have a positive tilt in that there was a unanimous vote to keep the bond purchasing program at 175 billion pounds (whereas in the previous vote, the was minority dissention headed by Governor Mervyn King for a greater amount). Nonetheless, the central bank kept open the possibility of further expansion of this unorthodox policy. Another step that was speculated to under consideration was a cut to the deposit rate paid to banks that hold their capital with the BoE. This too was written off; but commentary by King and other MPC members continues to stoke speculation that either or both is still a considerable possibility. Without doubt, the central bank is running out of options to jump start the economy. The further the policy authority extends itself without a commensurate response from financial health or economic activity, the more dire the nation’s condition. Considering the government will have to follow through on a serious round of spending cuts in the near future (expected to be the biggest reduction in over three decades), time is certainly working against policy officials.
In the grand scheme of things, economic data is vital at this point; but a meaningful improvement in the outlook will come with time and a wide array of indicators. Nonetheless, there are a slew of indicators to account for next week – and perhaps even a few of them could help jump start optimism. Most prominent, but least likely to surprise, is the final reading of the 2Q GDP numbers. There is rarely a meaningful adjustment in this last recalculation of the data; but the new current account numbers, some spending adjustments or capital investment alterations would be notable. Among the other notable figures, mortgage approvals, net consumer credit and the money supply are important gauges for financial health. The BoE home equity withdrawal figure and PMI factory and construction data is growth focused.
Written by Terri Belkas, David Rodriguez, John Kicklighter, Ilya Spivak, John Rivera and David Song, Currency Analysts
Article Source - Forex Weekly Trading Forecast - 09.28.09
Forex News
Japan's Currency Hits a 7 Month High
The Yen rose to a 7 month high versus the Dollar as Japan's new government reiterated its opposition to pursuing deliberate currency devaluation strategy. The Sterling dropped to a 3 month low versus the Dollar last week after Bank of England Governor Mervyn King was quoted as saying the Pound's weakness is aiding in stabilizing the U.K.'s economy. Today's trading day will likely experience the markets reaction to the G20 leaders' decisions, mainly their pledge to continue supporting the stimulus efforts.
USD - USD Falls below 90.00 Yen
The Dollar weakened on Friday after a set of mixed U.S economic reports as well as reports that the G20 leaders will continue to provide support for the global economy. The Dollar index fell to 76.774 Friday, down from 76.901 late Thursday. The Dollar remained down more than 1% versus the Japanese Yen after statements by Japan's Finance Minister Hirohisa Fujii that he opposes intervening in the currency markets to curb the rise in the Yen.
Orders of durable goods unexpectedly fell 2.4% in August. Sales of new homes rose 0.7% to a 429,000 pace in August, much slower than the expected 442,000. On the other hand, the Reuters-University of Michigan consumer sentiment index was revised to 73.5 in September, compared to a previous estimate of 70.2 and 65.7 in August, beating analysts expectations.
No news events are expected today form the U.S; therefore, it is likely that Dollar sentiment will be determined by investors' reactions to the G20 concluding statements.
EUR - Sterling Trades at a 3 Month Low vs. USD
The Sterling dropped to a 3 month low below $1.60 last week after Bank of England (BOE) Governor Mervyn King was quoted stating the Pound's weakness is aiding in the recovery of the U.K economy. The EUR traded at $1.4665, up 0.2% from Thursday.
The Sterling slid 2.1% versus the Dollar last week following very dovish announcements by BOE Governor Mervyn King, calling the Pound's recent drop “very helpful.” The Pound fell Friday to $1.5918, the lowest level since June 8, and depreciated to 91.19 per ERU, the weakest level since April 1.
While a rather slow news day is expected today, ECB president Trichet's speech at 2:30 GMT is likely to provide volatility to the EUR as interest rate targets and exit strategies are likely to be discussed.
JPY - Yen at a 7 Month high versus the Dollar
The Yen registered sharp gains Friday, breaching the significant Y90.00 barrier against the Dollar and reaching the highest levels versus the greenback in over 7 months. Japan's currency benefited from supportive comments from Japan's finance minister Hirohisa Fujii who said that he opposes intentional devaluation of the Yen.
The JPY advanced 1.8% this week to 89.64 per Dollar from 91.29 on Sept. 18, briefly touching 89.51 Friday, the strongest level since Feb. 5. The currency also gained 2% to 131.70 per ERU, from 134.33.
Crude Oil - Crude Prices up Slightly on Mixed Data
At the end of a very volatile trading day Friday, Crude Oil futures rose slightly, for the first session in 3, following the release of mixed economic data from the U.S as well as on increased odds of broad based sanctions against Iran, the world's 4th largest Oil producer. Crude for November delivery rose 13 cents, or 0.2%, to end at $66.20 a barrel on the New York Mercantile Exchange, after dropping as low as $65.05, the lowest level since July 30. Overall futures tumbled more than 8% this week, the biggest weekly loss in more than two months.
The unexpected jump in the Reuters/UoM Consumer Sentiment Index to 73.5 in September helped push up Oil prices; however, concerns over weak demand dampened Friday's gains. Furthermore, several worse than expected economic data from the U.S stemmed further Oil's
USD - USD Falls below 90.00 Yen
The Dollar weakened on Friday after a set of mixed U.S economic reports as well as reports that the G20 leaders will continue to provide support for the global economy. The Dollar index fell to 76.774 Friday, down from 76.901 late Thursday. The Dollar remained down more than 1% versus the Japanese Yen after statements by Japan's Finance Minister Hirohisa Fujii that he opposes intervening in the currency markets to curb the rise in the Yen.
Orders of durable goods unexpectedly fell 2.4% in August. Sales of new homes rose 0.7% to a 429,000 pace in August, much slower than the expected 442,000. On the other hand, the Reuters-University of Michigan consumer sentiment index was revised to 73.5 in September, compared to a previous estimate of 70.2 and 65.7 in August, beating analysts expectations.
No news events are expected today form the U.S; therefore, it is likely that Dollar sentiment will be determined by investors' reactions to the G20 concluding statements.
EUR - Sterling Trades at a 3 Month Low vs. USD
The Sterling dropped to a 3 month low below $1.60 last week after Bank of England (BOE) Governor Mervyn King was quoted stating the Pound's weakness is aiding in the recovery of the U.K economy. The EUR traded at $1.4665, up 0.2% from Thursday.
The Sterling slid 2.1% versus the Dollar last week following very dovish announcements by BOE Governor Mervyn King, calling the Pound's recent drop “very helpful.” The Pound fell Friday to $1.5918, the lowest level since June 8, and depreciated to 91.19 per ERU, the weakest level since April 1.
While a rather slow news day is expected today, ECB president Trichet's speech at 2:30 GMT is likely to provide volatility to the EUR as interest rate targets and exit strategies are likely to be discussed.
JPY - Yen at a 7 Month high versus the Dollar
The Yen registered sharp gains Friday, breaching the significant Y90.00 barrier against the Dollar and reaching the highest levels versus the greenback in over 7 months. Japan's currency benefited from supportive comments from Japan's finance minister Hirohisa Fujii who said that he opposes intentional devaluation of the Yen.
The JPY advanced 1.8% this week to 89.64 per Dollar from 91.29 on Sept. 18, briefly touching 89.51 Friday, the strongest level since Feb. 5. The currency also gained 2% to 131.70 per ERU, from 134.33.
Crude Oil - Crude Prices up Slightly on Mixed Data
At the end of a very volatile trading day Friday, Crude Oil futures rose slightly, for the first session in 3, following the release of mixed economic data from the U.S as well as on increased odds of broad based sanctions against Iran, the world's 4th largest Oil producer. Crude for November delivery rose 13 cents, or 0.2%, to end at $66.20 a barrel on the New York Mercantile Exchange, after dropping as low as $65.05, the lowest level since July 30. Overall futures tumbled more than 8% this week, the biggest weekly loss in more than two months.
The unexpected jump in the Reuters/UoM Consumer Sentiment Index to 73.5 in September helped push up Oil prices; however, concerns over weak demand dampened Friday's gains. Furthermore, several worse than expected economic data from the U.S stemmed further Oil's
Pound Tumbles, Dollar Surges as Risk Aversion Hits Currency Markets (Euro Open)
The US Dollar surged higher to start the trading week as stocks sold off across Asian exchanges, boosting demand for the safety-linked currency. The British Pound bore the brunt of the greenback’s assault as risk aversion compounded last week’s dovish rhetoric from the Bank of England.
Key Overnight Developments
• Pound Tumbles Despite BOE Backtracking on King’s Comments
• Japanese Yen Surges on Safety Demand as Stocks Plunge in Asia
Critical Levels
The British Pound and the Euro both suffered sharp losses in overnight trading as stocks tumbled in Asia, driven lower by Friday’s disappointing US economic data, sending the MSCI Asia Pacific regional benchmark index down 1.2% and boosting demand for the safety-linked US Dollar.
Asia Session Highlights
The British Pound raced sharply lower in early trading as currency markets seemingly concluded that the Bank of England suspiciously “protests too much” after the UK Times Online cited unnamed sources at the central bank as saying King was trying to talk down sterling last week. The Pound began to accelerate lower last Monday after the BOE released an article titled “Interpreting Recent Movements in Sterling” as part of its quarterly bulletin which argued that the inability of drying up capital inflows to finance the current account deficit could mean a fall in the “the long-run sustainable real exchange rate”. Sterling bears were given extra fuel last Thursday when Governor Mervyn King said rebalancing the UK economy was “very necessary [and] the fall in the exchange rate that we have seen will be helpful to that process” in an interview with The Journal.
Reserve Bank of Australia Governor Glenn Stevens struck a hawkish tone at a testimony to the Senate Committee in Sydney. Stevens said that Australia’s recession has been mild and the economy has done “quite well” as government stimulus “materially” supported growth, adding 2-3% to local demand. On interest rates, Stevens said that benchmark borrowing costs are “unusually low” and will need to go back to normal levels, adding that inflation targeting will guide the timing of adjustment to “more normal levels”.
Euro Session: What to Expect
A preliminary estimate of Germany’s Consumer Price Index is set to show that prices fell -0.2% in the year to September, marking the third consecutive month that the EU-harmonized metric has printed in negative territory. A reading in line with expectations is unlikely to prove market-moving: economists have called for year-on-year CPI to shrink -0.3% through the third quarter, and averaging September’s would-be reading with those recorded in the previous two months yields just about that outcome. The coming months present an opportunity for volatility, however: consensus forecasts have inflation coming back into positive territory in the fourth quarter and averaging around 1.2% through 2010; if this proves too rosy as the economy falters anew after the boost from fiscal stimulus (both at home and abroad) and the inventory cycle fizzles out, a drop in inflation expectations stands to prolong the slump in the Euro Zone’s largest economy. Indeed, consumers and businesses have little incentive to spend and invest in the present if they reckon prices will be lower in the future, bringing economic activity to a standstill. This will mean the ECB will keep interest rates at current lows longer than nearly all of its major counterparts (with the exception of Japan and Switzerland), weighing down the Euro.
Written by Ilya Spivak, Currency Analyst
Article Source - Pound Tumbles, Dollar Surges as Risk Aversion Hits Currency Markets (Euro Open)
Key Overnight Developments
• Pound Tumbles Despite BOE Backtracking on King’s Comments
• Japanese Yen Surges on Safety Demand as Stocks Plunge in Asia
Critical Levels
The British Pound and the Euro both suffered sharp losses in overnight trading as stocks tumbled in Asia, driven lower by Friday’s disappointing US economic data, sending the MSCI Asia Pacific regional benchmark index down 1.2% and boosting demand for the safety-linked US Dollar.
Asia Session Highlights
The British Pound raced sharply lower in early trading as currency markets seemingly concluded that the Bank of England suspiciously “protests too much” after the UK Times Online cited unnamed sources at the central bank as saying King was trying to talk down sterling last week. The Pound began to accelerate lower last Monday after the BOE released an article titled “Interpreting Recent Movements in Sterling” as part of its quarterly bulletin which argued that the inability of drying up capital inflows to finance the current account deficit could mean a fall in the “the long-run sustainable real exchange rate”. Sterling bears were given extra fuel last Thursday when Governor Mervyn King said rebalancing the UK economy was “very necessary [and] the fall in the exchange rate that we have seen will be helpful to that process” in an interview with The Journal.
Reserve Bank of Australia Governor Glenn Stevens struck a hawkish tone at a testimony to the Senate Committee in Sydney. Stevens said that Australia’s recession has been mild and the economy has done “quite well” as government stimulus “materially” supported growth, adding 2-3% to local demand. On interest rates, Stevens said that benchmark borrowing costs are “unusually low” and will need to go back to normal levels, adding that inflation targeting will guide the timing of adjustment to “more normal levels”.
Euro Session: What to Expect
A preliminary estimate of Germany’s Consumer Price Index is set to show that prices fell -0.2% in the year to September, marking the third consecutive month that the EU-harmonized metric has printed in negative territory. A reading in line with expectations is unlikely to prove market-moving: economists have called for year-on-year CPI to shrink -0.3% through the third quarter, and averaging September’s would-be reading with those recorded in the previous two months yields just about that outcome. The coming months present an opportunity for volatility, however: consensus forecasts have inflation coming back into positive territory in the fourth quarter and averaging around 1.2% through 2010; if this proves too rosy as the economy falters anew after the boost from fiscal stimulus (both at home and abroad) and the inventory cycle fizzles out, a drop in inflation expectations stands to prolong the slump in the Euro Zone’s largest economy. Indeed, consumers and businesses have little incentive to spend and invest in the present if they reckon prices will be lower in the future, bringing economic activity to a standstill. This will mean the ECB will keep interest rates at current lows longer than nearly all of its major counterparts (with the exception of Japan and Switzerland), weighing down the Euro.
Written by Ilya Spivak, Currency Analyst
Article Source - Pound Tumbles, Dollar Surges as Risk Aversion Hits Currency Markets (Euro Open)
Forex Education
Trust Yourself
When you turn on the TV (especially mainstream media) you are inundated with news of the demise of the dollar. Business news, national news and even your local news channels are leading into events with reports of the dollar and the economy. Analysts are featured and opinions are smattered across the airwaves in an attempt to provide an oracle response to current economic events.Beware the source and follow your system.
In these volatile times it is easy to get caught up in the hype provide by all the news media and analyst. It is natural to want to look for guidance. Remember to trust your system and more important trust yourself. You, after all, are the single largest determinant of your success.
Your approach should remain consistent, almost impervious to the events occurring because you follow your plan with discipline and ruthless detail to executing at optimum performance.
Be disciplined and follow your plan. If market conditions don’t suite your style – sit this one out until conditions provide your with your personal edge!
Happy Trading!!
ForexJourney
Forex Education
Do you have what it takes to become a successful Forex Trader?
Forex trading, or any trading for that matter, is an occupation that requires experience and the accumulation of proficiency not unlike any other highly skilled profession. Whether you are a leading executive at a major publically traded company, a professional golfer or trading from your kitchen table, there are 5 key ingredients that one must possess in order to become successful.1. You must be Passionate about what you do.
As Forex traders we all face one unique set of circumstances that does not exist in any other profession. We get rewarded for when we succeed and equally punished when we don’t! Could you image a corporate worker one quarter receiving a significant accomplishment bonus and the next quarter actually getting money taken from their paycheck for missing performance targets? Not on your life!
We do as Forex traders and that is why passion for what you do will carry you through the tough times that are part of your trading business. Asked yourself why you trade currencies and would you still do it if Forex were not potentially lucrative? Your answers will be quite revealing. You’ve got to feel your passion for trading!
2. You have to Apply Yourself and work hard at it.
I talk to so many people that enter into Forex trading with the aspiration of getting rich quick. Without putting the time and energy into really getting good at trading I see them jump from strategy to strategy looking for the goose that will lay the golden egg and eventually quitting while blaming everything else, except the true cause.
I got news for you – you are the goose and your Forex education is the golden egg. The magic has always resided with the magician and not some strategy. Work hard at trading and the rewards will eventually come your way. Remember what Tiger Woods said, “Funny, the harder I work the luckier I get.” Apply yourself as a trader and it will be no accident when your account begins to blossom.
3. You must Focus to really get good at what you do.
Now here is the hurdle most Forex traders struggle to get over. You have the passion and you are applying yourself to your trade, now focus and really get good at just at what you are doing. Be the expert to the experts at just that one thing. Become the master of a strategy or risk management methodologies. Really focus on getting good at it.
Stop jumping around or getting pulled from the last “latest and greatest” into the next “latest and greatest” and focus on one aspect of Forex trading and know it inside out. Know it strengths and weakness. Set your sights on becoming expert on just one aspect of trading and watch it spill over in all other aspects for your currency trading. This is the time to fail forward fast, use every setback as a learning opportunity that will propel you 3-steps ahead!
4. You must Push Yourself beyond the point everyone else might have quite.
In Forex Trading this is simple. Assume there is someone on the other side of your trade that is pushing themselves and sharpening their edge. To be successful you must you must do the same thing. Now is the time to examine your mental edge. Do you know the single most critical factor in any currency trade? It is you, the trader! Sharpening you mental edge is the most difficult aspect of trading, but also the most rewarding.
Start with your Forex education and gain the self-awareness necessary to maximize your strengths and suppress your weaknesses. Any expert will tell you that trading is 80% mental. It’s time to sharpen your trading to the razor’s edge and you do this through Forex education. A constant and never ending process that will become the cornerstone of your Forex experience.
5. You must, without wavering, be Determined and Persist to your objective.
You will fail. I can state that emphatically. However, you will not be defeated unless you allow your failures to control your trading. It is the old adage; failure is not falling of your horse, failure is refusing to get back on. Your success depends on your ability to dismiss the criticism, rejection, self-doubt and pressures associated with Forex trading.
Defining what is a winning trade, losing trade and bad trade will go a long way into developing you as a successful trader. Without the determination and persistence in all aspects of your trading life, obstacle will definitely appear closer and larger than they actually are.
Take a moment and assess yourself and your trading. Do you have the key elements to succeed? Which areas are presents development opportunities? When conducting a self-evaluation it is critical to be totally upfront and honest with yourself. After all, you will only be dishonest with yourself. One of the most interesting observations you can make is that all key success factors are interwoven. One factor supports the other. This is why your Forex education is a continuous journey of forex strategy, money management and self-mastery. Set these factors as your Forex education goals and take your currency trading to new heights.
Happy Trading!!
Forex Journey
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