Currency trading can be performed 24 hours a day 5 days a week, through Forex Brokers.

The foreign exchange (Forex) market, works like every other market in the world, it’s driven by supply and demand. Understanding the concept of supply and demand will make a huge difference to your Forex trading results. To be successful trading Forex you need to be able to sort through all the daily news to determine those messages that are important and likely to have an impact on the market.

Supply is a measure of how much of a currency is available at any particular point in time. The value of the currency is linked to how much of it is available. As the supply of a currency increases, it becomes less valuable and as the supply of the currency decreases, its value declines.

Demand is a measure of how much of a currency people want at any particular point in time. As demand for a currency increases, it becomes more valuable and as demand for the currency decreases it becomes less valuable.

To understand how demand and supply can effect something’s value, think about the Nintendo Wii. When the Wii was first released, there was a high demand for the toy and it sold out quickly. The only option for parents who weren’t fast or aggressive enough to buy the Wii when it came out, was to either wait for more toys to be made or pay ridiculous prices on eBay. High demand made this toy much more valuable than it would have been if nobody wanted it.

Applying this example to the Forex market, if we can determine when supply and demand are increasing or decreasing for a currency, we have a good idea of whether the currency is going to increase or decrease in value.

When you are analyzing a currency to determine whether you think it will increase or decrease in value in the near future, you should consider how all the fundamental factors will affect the demand and supply of the currency. As you consider more and more fundamental factors, you should notice that one side of the seesaw will begin to tip up or down.

Using the concept of a seesaw for supply and demand can help you to understand complicated economic information. It is far easier to look at each individual factor to determine how it will affect the currency’s value than it is to try and weigh them up all together.

Once you have analyzed a factor, put it on the appropriate side of the seesaw and move on to the next one. Once you have finished this process, you should begin to see which side is more heavily weighed. Using this information you can form a decision on whether you think the currency’s value will increase or decrease.

However, he told Reuters in an interview that a shift remains the bank’s long-term objective.
“The board is making the decision but it has not taken the decision yet,” he said on the sidelines of a conference in London.

“The UAE economy is evolving and it is important to diversify (Forex reserves). We need to diversify, not for any reason except that we have to move away from just (having) a single currency. Otherwise you get caught in the wrong corner. Diversification is a long-term objective.”

The central bank of the UAE has been keeping markets guessing about its plans to convert 10 per cent of its reserves from US dollars to euros, announced earlier this year. UAE central bank foreign reserves, which stood at $23 billion in December, are held almost entirely in US dollars.

“We do have a high ratio of dollars but this is appropriate because the US dollar is the currency for international trade and for investment,” Al Suweidi said yesterday.

The central bank controls only part of the foreign exchange reserves of the UAE. Other major holders include the investment arms of the emirates’ governments.

Some analysts say official Forex reserves make up less than 10 per cent of Gulf Arab government holdings.

The UAE is one of six members of the Gulf Cooperation Council (GCC) along with Saudi Arabia, Kuwait, Qatar, Bahrain and Oman.

SOURCE: Khaleej Times Online

JON’S COMMENT
Another bearish sign for the US Dollar as many countries now plan to diversify their Forex reserve away from the Dollar toward Euros or even Gold.

China’s net IIP, or overseas financial assets and direct investment minus such liabilities, was US$287.5 billion at the end of 2005, surging by 138 per cent from a year earlier, according to figures released yesterday by the country’s top foreign exchange body, or State Administration of Foreign Exchange (SAFE).

This is the first time China has published its IIP figures, which the administration said would help complete its macroeconomic statistics, assist macro policymaking and analyze the global financial capital situation.

China ranked sixth largest in terms of net IIP for 2004, and last year’s sharp increase is bound to push its ranking up further, SAFE said.

“China’s international investment position reflects its achievements of opening up and economic development in the past nearly 30 years, indicating the opening up is broadening, (there is a) closer connection with the world economy, and economic strength is improving,” a SAFE spokesman said.

The administration said the growing stockpile of net assets gives China a strong capacity to repay foreign debts, underlining the liquidity and ability to control foreign exchange reserves that make up the bulk of foreign assets and the stability of inward foreign direct investment.

“Such a structure will help prevent financial risk, and has a positive effect on China’s financial stability,” the spokesman said.

Driven by a huge trade surplus and growing capital inflows partly fuelled by expectations for a stronger local currency, China’s forex reserves shot up to US$818.9 billion at the end of last year from US$609.9 billion a year earlier. Forex reserves accounted for an overwhelming 68 per cent of China’s foreign financial assets at the end of last year, and 71 per cent of the 2005 increase in foreign financial assets.

While the growing forex reserves serve to ensure the nation’s international clearing ability, they have complicated monetary policymakers’ job of containing local money supply to harness inflationary pressures and rapid loan growth. They mop up excess dollars to enforce the trading band of the renminbi by issuing new cash, subsequently increasing local money supply.

Government officials have repeatedly said China is not pursuing a huge forex stockpile, and has been taking measures to reduce surpluses.

Source: China Daily

The Victorian County Court heard that Vince Ficarra told his boss on the foreign exchange options desk, Luke Duffy, that he was not impartial to telling lies as the traders continued to hide losses by entering one-sided false trades.

Ficarra, 27, of North Fitzroy, and David Bullen, 34, of Eversley near Ballarat, have pleaded not guilty to charges of gaining financial advantage by deception.

In his summing up, crown prosecutor Dr Greg Lyon SC told the jury that Ficarra would have continued to try to trade his way out of trouble rather than crystallise the $12 million loss he had made by January 2004.

“He was putting planks over the abyss,” Dr Lyon said.

“(Ficarra and Bullen) had pulled the wool over management’s eyes.”

He said the defence had argued that if the bank had been gutsy and held on to the positions, things would have turned in their favour.

“It is contrary to evidence and just plain fanciful,” Dr Lyon said.

He said two junior traders on the desk, Vanessa McCallum and David Gentilin, were not a party to the manipulation of trades that were undertaken to take out volatility in the profit and loss account.

Duffy, 36, and another trader Gianni Gray, 35, had pleaded guilty in other courts and had been dealt with.

“Ms McCallum and Mr Gentilin were not comfortable and at least Ms McCallum had the courage and moral integrity to stay out,” Dr Lyon told Judge Geoff Chettle.

He said Ficarra could not hide behind the claim that he was only carrying out Duffy’s instructions.

“If Duffy was the mentor, if he was the leader, he was not one Ms McCallum slavishly followed,” Dr Lyon said.

“It’s treating us all as fools to suggest others on the trading desk could only learn from Duffy and that all sense of right and wrong is left at the door when you start your first job.”

He said Mr Gentilin blew the whistle on the phoney trades on January 9, 2004, by reporting to the global manager of the trading desk.

He said the trade value report for that day showed a loss of $160 million.

“That report is the smoking gun, a stark demonstration of what this was all about,” Dr Lyon said.

“Ficarra put through trade entries of $US9.7 million or a loss of $12 million.

“You can’t suggest that he didn’t fear for his own position, it is ridiculous to suggest that he thought he was acting honestly.”

Bullen, who is defending himself, said management was partly to blame for the way the desk behaved and this was shown by the departures of his immediate superiors, along with chief executive Frank Cicutto and chairman Charles Allen.

“You can’t say they lost their jobs because they were not responsible,” Bullen said.

He told the jury that he could see where the situation was heading as trading worsened but he did not attempt to leave the bank.

He said allegations that he acted dishonestly were incorrect assertions on his character and his actions.

“I consider it a better outcome to go to jail than to keep my job,” he said.

“Seemingly unfair things happen to undeserving people and I am only interested in avoiding rebirth as an animal or something worse in the next life.

“It would clear away bad karma going to jail so for me it will be even more beneficial.”

SOURCE: AAP

JON’S COMMENTS
This scandal has been discussed in Australia for a while now and honestly, I just can’t believe that it had gone unotice by management for that long! I could have traded better with my own strategy, Forex Fighter, than these 2. But I am surely not there to help banks make more profits!