Forex Investment and Currency Trading

Leverage allows an investor to use an amount of money to raise a far larger quantity. Therefore, it should not be taken lightly. In Forex, leverage can transform $1,000 into $100,000 on the markets. The initial amount of money, called a margin, allows the investor to leverage a much larger investment.
This means that even the smallest investor can suddenly command large positions in the Forex market. Leverage, however, can be extremely dangerous. Just as it allows investors to realize much larger gains over a very short time, it can also lead to staggering losses.
For example, you can buy currency on [...]

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CAD
USDCAD continued its grind lower overnight through the Asian and London trading sessions, dipping down to 1.1900 this morning. It’s almost as if this last week or two never happened, with equities back to where they were mid-month, oil back above $68, and the Canadian dollar back to well above 80 cents US. Expect to see USDCAD remain in a wide 1.1750/1.2250 range for the time being, with price action expected to remain erratic. Tomorrow we finally get some Canadian data, with August GDP, returning the focus, at least briefly, to Canadian economic fundamentals.
Majors
The markets have seen some wild price action, [...]

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EUR/JPY at 129.25 – just off its 130 highs from overnight – and the risk appetite of many markets suddenly returns.  The issue is how correlated is FX to stocks, commodities and EM, and does it lead or follow.  The actions of the FED yesterday and the EM swaps clearly drove the Korean markets and helped the Japanese.  But so too did the turn around of action from the Japanese government this week and the hope for a BOJ rate cut.  The FX market reflected this move in JPY yesterday – and continued it overnight so maybe FX is leading.  [...]

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The statement accompanying the unanimous decision to cut interest rates clearly signaled greater concerns about growth with inflation much less of a concern and expected to moderate in coming quarters. While not expect further rate cuts the risks are skewed to further easing in the months to come; Fed Fund futures are now pricing in a nearly 100% probability of a further 25bp cut by year end. In terms of price action, US equities seesawed for most of the day on light volume as investors awaited the FOMC announcement, but sold off sharply into the close and ended the day [...]

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