Category Archives: Money Management

The Federal Reserve and Interest Rates





Federal Reserve

Federal Reserve and Interest Rate Hike

The Federal Reserve is getting closer to increasing interest rates once again, the chief of the United States central bank as well as other policymakers stated on Friday in comments that placed the door open for a rate boost as early as next month.

The Stock Market Reaction

The Markets remained doubtful of the Fed’s rate increase projections. In the past there was a recognized wide gap between what it has signified and essentially delivered.

The Fed officials’ comments forced the dollar.DXY higher against a basket of currencies. U.S. stock prices see-sawed, finishing the trading session basically lower, while prices of U.S. Treasuries were largely weaker.

More from Janet Yellen

Fed Chair Janet Yellen advised an international monetary policy conference that the case for a rate increase had grown stronger. Fed Vice Chair Stanley Fischer advised a move could possibly come at the central bank’s September policy meeting. That is in case the economy was coming along.

U.S. government data earlier on Friday showed the overall economy growing only sluggishly in the 2nd quarter, Yellen said a good deal of new jobs were being generated and economic expansion would likely carry on at a moderate pace.

” I believe the case for an increase in the federal funds rate has strengthened in recent months,” Yellen pointed out in a speech at the Fed’s yearly monetary policy meeting in Jackson Hole, Wyoming.

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Yellen pointed out the Fed pretty much believes it is close to fulfilling its objectives of maximum employment and steady prices. She further detailed consumer spending as “solid” while keeping in mind business investment was feeble and exports had been hurt by a strong AMERICAN dollar.

She did not provide advice on exactly what the central bank needs to find before increasing rates. Following her comments, investors continued to bet there were approximately even odds of an increase at the Fed’s December policy meeting.

” She’s just kept the door open for a hike sooner rather than later,” said Subadra Rajappa, an interest rate strategist at Societe Generale in Washington.
During an interview with CNBC after Yellen’s speech, Fischer, the central bank’s No. 2 official, stated the Fed chief’s remarks were a sign of just how close policymakers could be to raising rates if data kept suggesting a good economic outlook.

Asked whether folks should “be on the edge of our seat” regarding a rate jump in September and for more than just one policy tightening before the end of the year, Fischer said, “I think what the Chair said today was consistent with answering yes to both of your questions.”

Atlanta Fed President Dennis Lockhart likewise said on Friday that a pair of rate hikes were likely possible this year, and Cleveland Fed President Loretta Mester argued for an increase in the near future to keep away from falling behind the curve on rising cost of living.

For more on this, see Rueters.

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The G7 does not seem to have any solutions concerning the world economy

credit-squeeze

Contrary to what the FED is telling us, even thought the U.S. economy is better than the rest of the world, still….

Overnight

Asia:

– G7 Overall Summary noted that global uncertainties had risen; a Brexit could complicate the outlook. Reiterated view that important to implement flexible fiscal policies and continue with structural reforms.

http://www.fxstreet.com/analysis/european-market-update/2016/05/23/


Be aware, Central Banks will be meeting

central banks

Withe Central banks to decide how to handle the problems of their respective countries, currency trading could get tricky…..

Non-Farm payrolls printed with an aggressively bullish headline number of +242k jobs added to American payrolls, but the internals of the report weren’t all that great. Christopher Vecchio outlines this morning’s jobs report.

– The next two weeks bring markets three of the largest and most pivotal Central Banks with rate decisions, meetings and press conferences that can invoke volatility henceforth. We preview each of those meetings below.

https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2016/03/04/the-central-banks-are-coming.html?DFXfeeds=forex:fundamental:daily_briefing:session_briefing:daily_fundamentals


What is the Average Daily Volume in Currency Trading

average dily volumn

It does not hurt to understand which currency pairs are coming in with the most volume, by going back in history….

The US Dollar remains the dominant counter-party in FX currency trading

In every Forex exchange transaction, you are simultaneously buying one currency and selling another.  Prices are generally quoted in basis points or “pips,” the lowest possible change in a currency’s price.  Most of these currency pairs will be priced out to four decimal places.  . The fraction numerator is referred to as the “Base currency”, while the denominator is the “Quote currency.”

https://www.xtrade.com/education/forex-currency-trading/


How safe is your FOREX trading during Stock Market Volatility

stock market volatility

It may be true that currency trading might be affected by a volatile stock market, so, ideas on how currency trading is affected……

Trading FX in Times of Stock Market Volatility

This trading cliché inevitably gets trotted out in periods of stock market volatility. Stated differently, the quote means bull markets tend to rise gradually and consistently (like an escalator) while bear markets are characterized by sudden, vertical drops (like an elevator).

http://www.forex.com/trading-forex-with-stock-market-volatility.html


Can you ensure victory in online FOREX trading

forex victory

It does not hurt for one to study how others plan and execute their trading strategies, especially when trading online. It is so very easy to lose control and lose…..

There should be a clear understanding of your goals and the kind of attitude you have now in trading. This is very important for better understanding of market trends. What is this self-awareness analysis? This only means understanding how tolerant you can be for the expected risks and the money you are willing to risk.

http://forexselections.com/articles.shtml#article1