Forex Investment and Currency Trading

Financial futures are standardized forward contracts which are traded on futures and options exchanges. A futures contract is an unconditional sale agreement which is binding on both counterparties, the seller as well as the buyer. Various financial instruments may be used as the underlying asset. There are, for example, financial futures contracts on interest rates (interest-rate futures), on equity indices (equity index futures) and on foreign currencies (currency futures). Futures have a symmetrical risk profile.
You, as an investor, can assume the position of either buyer or seller. The basic idea, however, is not to actually acquire or deliver the underlying [...]

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USD rose overnight as the pressure on European equities continued yesterday as well, with risk aversion persisting once again. The dollar and yen are set for their biggest monthly gains against the euro since last October as evidence of a deep global slowdown caused increased risk aversion this month. Fed balance sheet shrinks $110bn to 1.1929tn in latest week due as CPs rolled off, which implies that the CP market conditions may be improving. GDP growth came in much better than expected at -3.8%, however rise the inventories has negative implications going forward. US GDP, Chicago PMI and the final [...]

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After the sell-off of risky assets last week, FX markets were much calmer this week. However, it feels as if market participants viewed this as a temporary lull in the conflict rather than a proper ceasefire, let alone the end of the war. Equities have recovered somewhat, though in a far from convincing way, but commodities have largely moved sideways and the macro data have remained dire, exemplified by today’s US numbers, all of which surprised the market to the downside. The relative calm was associated in G10 FX with some of the recent underperforming currencies doing well. The CAD [...]

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During the impulsive fall in yields in 1992-1993 the USD (EURUSD) went from 1.4577 to 1.0812 (just under 26%)
In Oct 1993 the turn in the bond market began and while EURUSD was choppy (Sharp bounce followed by a sharp fall that did not set new lows) as the surge in yields began to gather pace EURUSD turned decisively and also surged with the move in yields. The argument here probably being that people bought the bonds and the currency and then sold both.
This resulted in a low to high move in EURUSD from 1.0812 to 1.3852 (28%)
This time around looks [...]

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