Forex Investment and Currency Trading

While the USD has picked up a little more obvious support (ex-JPY) in the past week or so, there is little to suggest that the underlying drivers of currency movement has changed that significantly. The GBP’s sharp fall can be attributed directly to comments on the currency from BoE officials and ongoing speculation that the central bank may yet reduce the deposit rate in a bid to boost its stimulus efforts. The JPY has surged in response to comments from the newly-election Japanese government suggesting a higher tolerance for a stronger JPY and less appetite for intervention. While this is [...]

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Softer oil prices and the generally stronger USD tone – most currencies except the JPY are down against the US currency this morning – are keeping the CAD tone on the defensive. The CAD has been one of the weakest performing of the major currencies over the past week, with only the lowly pound faring worse, likely reflecting the build up of long CAD positioning amid increasing speculation of a push towards parity. BoC Governor Carney’s comments last week underlined the central bank’s ongoing focus on the currency and with Governor Carney speaking again today, the markets will retain a [...]

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The communiqué published by world leaders at the conclusion of the G20 summit in Pittsburgh offered few surprises. Of interest, the communiqué referred to the G20 as the “premier forum for our international economic cooperation”. This effectively represents an acknowledgement that this expanded group of countries (representing 90% of global GDP and two-thirds of the world’s population) will be the key forum to discuss economic issues in the future.
Reflecting this shift, world leaders pledged to re-allocate at least five percent of the quota representation of the IMF to emerging and developing economies by January 2011. Reassuringly, world leaders also pledged [...]

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Up until 1973, currencies were fixed in value against the US Dollar, according to the system introduced on July 22, 1944 by the United Nations Monetary and Financial Conference in the resort of Bretton Woods in New Hampshire. This agreement became known as the “Bretton Woods” system. The Bretton Woods conference was at the same time the founding venue for the International Monetary Fund, a supranational entity. The IMF was a multilateral decision-making body with limited authority. There was a surprisingly large consensus among the 44 allied nations (plus neutral Argentina) participating in the conference. Everybody wanted to devise a [...]

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