Darren Bardsley wrote:


In the first three weeks of July 1944, delegates from 44 nations gathered at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire. The delegates met to discuss the postwar recovery of Europe as well as a number of monetary issues, such as unstable exchange rates and protectionist trade policies.

During the 1930s, many of the world’s major economies had unstable currency exchange rates. As well, many nations used restrictive trade policies. In the early 1940s, the United States and Great Britain developed proposals for the creation of new international financial institutions that would stabilize exchange rates and boost international trade. There was also a recognized need to organize a recovery of Europe in the hopes of avoiding the problems that arose after the First World War.

The delegates at Bretton Woods reached an agreement known as the Bretton Woods Agreement to establish a postwar international monetary system of convertible currencies, fixed exchange rates and free trade. To facilitate these objectives, the agreement created two international institutions: the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (the World Bank). The intention was to provide economic aid for reconstruction of postwar Europe. An initial loan of $250 million to France in 1947 was the World Bank’s first act.

The Bretton Woods Agreement was also aimed at preventing currency competition and promoting monetary co-operation among nations. Under the Bretton Woods system, the IMF member countries agreed to a system of exchange rates that could be adjusted within defined parities with the U.S. dollar or, with the agreement of the IMF, changed to correct a fundamental disequilibrium in the balance of payments. It was agreed that the 44 nations currencies would, from 1944 onwards be pegged or fixed against the US dollar. This agreement became known as the Bretton Woods Agreement and would remain intact for the next 27 years until 1971.

Advocates of the Bretton Woods system believed that stable exchange rates would avoid the beggar thy neighbour policies of the 1930s and benefit economies around the world by expanding international trade. However, over time, exchange rates became uncompetitive because of the infrequent changes in parities. In addition, there were often large destabilizing flows of currency, as speculators bet on the value at which the fixed exchange rate would be refixed. There were also concerns that a fixed exchange rate system did not allow countries enough freedom to pursue their own monetary and fiscal policies.

In 1971 the Bretton Woods agreement was disbanded and currencies were no longer pegged against the dollar and were allowed to float freely. Over the last 37 years not only have these currencies floated freely, but we have seen great advances in technology and the way in which these currencies are traded.

In 1987 when the ERM (exchange rate mechanism) was created it gave national currencies and in particular European currencies an upper and lower limit on either side of a central rate within which they could fluctuate. However this, as with the Bretton Woods Agreement no longer exists.

In 1992 something significant happened in this market and the currency speculators set about trying to break the ERM, which ultimately they succeeded in doing. This resulted in a number of currencies not being able to stay within the agreed limits, resulting in them leaving the ERM, the most memorable of these events was on 16 September 1992 and became known as Black Wednesday.

Black Wednesday occurred when the UK Conservative government was forced to withdraw the pound from the European Exchange Rae Mechanism , due to pressure by currency speculators and most notably George Soros, who made $1bn from forcing the pound out of the ERM on one trading day. For him this was a really good day’s trading as he made $1bn in one single day.

When the Labour government took over five years later, the UK Treasury estimated that the cost of Black Wednesday was more like 3.4bn gbp. When the story was leaked to the press on 16 and 17 September 1992 that the cost of Black Wednesday was $1bn, it was later calculated in 1997 that it cost the UK tax payer 3.4bn gbp through a speculative trade, which resulted in the UK pound being forced out of the ERM.

In 1999 we enter the era of the Euro, which came into being in January of that year. As of January 2008 there are 20 countries using the Euro:

Andorra, Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Monaco, Montenegro, Netherlands, Portugal, San Marino, Slovenia, Spain and Vatican City.

CURRENT DAY

The Foreign Exchange market, Forex for short, is about exchanging and changing one currency for another. So as an example, you could trade the British Pound (GBP) for the US Dollar (USD) or you could trade the US dollar against the Euro.

Not only are the Forex markets accessible by the banks and institutions, but the best news is that this market is now available to you and I, the private investor or day trader.

The Forex market is also the market that sets the tourist currency rates we all use when we go abroad on holiday or when we buy goods from abroad. So for example when you see goods advertised on eBay or elsewhere on the internet, or if you do business abroad, the exchange rate that you deal in or trade in is actually set by the Forex market.

So where is the Forex market located you might ask? Well actually there Forex market has no centrally location or designated exchange. It is unlike London or New York, where you get the London and New York Stock Exchanges, where you get traders that congregate and create a market.

The Forex is a global market, which is one of the significant benefits and means as it has no central trading location its able to be open 24 hours a day. The reason for this is that the Forex is traded through the global network of banks, corporations and individuals trading one currency against another.

This is why it has so much appeal to a lot of traders, because no matter where you are located in the world, the market is trading and there is no central exchange. Price fluctuations and changes in price occur even during the night when we are tucked up in bed and asleep. These changes are transmitted around the world for all the traders to see and access through their computer screen.

So what are the trading hours of the Forex market? As previously mentioned the market is open 24 hours a day and starts trading on Sunday evening at 5pm Eastern Standard Time (EST) in New York. This is the start of the trading week, which will trade though then 24 hours a day until Friday when it closes at 4pm EST. Then it all starts again on Sunday at 5pm EST.

A term commonly used when trading the Forex is the word ‘Liquidity’. The volumes of currencies that are traded in the Forex on a daily basis are absolutely enormous and because of this huge amount of volume it creates a vast amount of ‘liquidity’ in the market. What this means for you and I, the potential trader is that there is always massive opportunity to trade. If you want to be able to trade in a market that you can easily get in and out of, there simply is no bigger market that the Forex for liquidity.

The trading volumes within the Forex market have continued to rise year on year. The daily turnover in the Forex market in 1992 was around $500bn, which is an awful lot of money. In 2007 the Bank for International Settlements reported that the Foreign Exchange Market traded a whopping $3.2trn per day! and this figure is expected to increase in 2010 when the survey will be completed again.



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Groshan Fabiola wrote:


The largest financial market in the world is the foreign exchange market, or forex for short. The trading that takes place on the forex market involves all sorts of financial institutions, such as large banks or central banks, as well as governments, currency speculators, and multinational corporations. The amount of daily trade stands as proof of the largeness of the forex market: the average daily trade currently exceeds $ 3 trillion.

Aside from the financial institutions and large corporations that are involved in trading over the forex market, there are also individual traders, also referred to as retail traders, but they only represent a small fraction and they are allowed participation only through banks or brokers.

The uniqueness of the forex market is demonstrated by a series of specific traits, such as its extreme liquidity or its trading volumes. The large number of traders on the forex market and their variety also make it unique. Other specific characteristics include the long trading hours and the geographical dispersion. The exchange rates, which represent the basis of the forex market, can be influenced by a great variety of factors, hence the opportunity for speculations that exists on this market more than on any other financial one. Although the forex market has low margins of profit by comparison to other fixed income markets, its large trading volumes allow for profits to be considerably high. Another specific to the forex market is that it lacks a central regulatory agency.

All these characteristics of the forex market, as well as the perspective of considerable profits, make it appealing to a lot of people. Anyone can trade on the forex market, and many people choose to do so regularly. However, prior to plunging into the forex market, any trader should have the proper forex education. This education includes the specific terms and processes that the market operates with. Fortunately, forex education is available from a number of sources, the most convenient and rapid of which has to be the online one. Of course, the most important part of forex education is the practice. The theory may be easy to understand, but the real deal is when a person actually starts trading. Forex practice is also available online.

If you are interested in forex trading in Italian, the Internet will help you once again. All you need is a computer and a broadband connection, and, of course some time to grasp the extensive forex information that you can find online. What you have to do is use one of the main search engines and type the words “Forex in Italiano”. You will then have to choose from all the search results that the search engine displays the one that you think represents the most comprehensive source of information for Forex in Italiano. The same “forex in Italiano” phrase will grant you access to important information, such as the country’s regulations for the forex market. It should be mentioned here that, since the foreign exchange market has no central regulatory agency, each country bears of responsibility for its actions of trades.

For more resources about Forex or especially about forex in Italiano please review this webpage http://www.penguineggs.com



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Gerald Mason wrote:


In spite of the trend toward diversity, most of the hundreds of stocks in the stock market can be grouped into one product or service category or another.

Which group is for you? Well, there are about fifty clearly defined industries in this country, even more if you are particular enough to separate aircraft manufacturers from airline operators, or natural gas from oils, or Class 1 railroads from lesser lines. Even these groupings are by no means complete. The list could be fleshed out with banks, insurance companies, leather-products companies, glass and container manufacturers, shipbuilders and fleet operators, textile millers, sugar growers, and radio and television manufacturers and broadcasters.

All of this reflects the wonderful and confusing diversity of American industry. Among it all there should be a few good stocks to buy. Indeed, there are. But it will not take much investigation to learn that each of these industrial groupings has a reputation, and that even the best reputations may be subject to cyclical slumps. These reputations are variously described, but roughly they can be said to follow the gradations given to stocks. There are Blue Chip industries, there are “businessmen’s risks,” there are out-and-out speculations. Or, you might say, there are industries of investment caliber, those of good quality, those responsive to abrupt up-and downswings, or, again, those which are speculative. Some are growth industries, some have hit then: peak and leveled off on a comfortable plateau, some are on their way down and out.

As always, generalities must be taken with a grain of salt. Within a group, one stock or another may run entirely counter to the general trend, either up or down. (And it is precisely this sort of contrary action that occasionally enables shrewd traders to buck the trend and come up with a winner.)

Among the industries of solid reputations, you would have to put the utilities first. This has not always been so. Manipulation with public-utility holding companies was one of the skyrocketing scandals of the days before the Crash. In the 30 years since then, however, utilities have regained status among the solid rocks of the securities markets. They are rarely spectacular performers.

Rate regulation by state power commissions permits-and even maintains-a reasonable return on utility operations, but curbs all chance of runaway profits. All estimates of future power needs and consumption point upward. Many utilities are in the forefront of atomic-energy development. Conservative management, steady expansion of plant and generating capacity, and temperate market action maintaining yields at 4 to 5 per cent are factors which currently give the better utilities a Blue Chip rating.

Food production and packaging is another sound and basic industry. Processors of grain-the flour millers, cereal producers, and syrup manufacturers-dairymen, and frozen-food packagers are all steady performers and likely to remain so, as the population increases and the nation’s diet continues to improve. Strangely, despite America’s passion for beef and pork and lamb, the meat packers do not enjoy the same level of prosperity.

The drug manufacturers generally are a conservative group with an impeccable reputation and an enviable profit record. (You will see them classified as producers of “ethical” or “proprietary” drugs. The former are the medicines or medical ingredients that can be dispensed only by a doctor’s prescription. The latter are the drugstore items-cough syrups, cold tablets, vitamins, ointments, and pills-that health conscious America doses itself with to the tune of more than three billion dollars a year.) Competition among the drug companies is fairly fierce.

The company that comes up with a new antibiotic or tranquilizer enjoys a keen competitive edge. And so does the one whose trade name for a standardized product becomes more popular than the rest. As suppliers of a basic American necessity, however, the drug group ranks with the food and power producers.

Chemicals must also be near the top of any quality list. Certainly, few industrial groups have such a high percentage of truly outstanding companies or such a basic and vital economic function to perform. Interestingly enough, as this is written, they are just beginning to come back into favor. Several years ago they were among the bluest of Blues. Then overexpansion, overproduction, and similar corporate imbalances began to plague them, and took the bloom off the rose.

Earnings fell off. The performance of chemical stocks as a group lagged behind that of other industries. Now they are picking up again, and brokers’ letters are rediscovering opportunities in chemicals. Such short-term reactions are not serious enough to weaken the fundamental stability of the chemical group. But one of the points to be made about the reputation of any category of stocks is that it is never invincible.

Choosing pairs of currencies to trade against each other is another interesting study.

Here are some of the best: The Euro and the Swiss Franc. The British Pound and the Japanese Yen.

These are best traded with the U.S. dollar. So we could trade the U.S. dollar against any of the above currencies for a good return on our investment.

Using good Forex software will also help you considerably.

Kristien Wilkinson wrote:


It has been declared by several economics and finance luminaries that the euro could very well be the next main currency reserve, toppling the US dollar from its revered position. No less than former Federal Reserve Chairman Alan Greenspan and Nobel Prize winner Robert Mundell have said that the unified monetary unit of the European Union could pose a serious challenge to the US currency.

The concept of an economic and monetary union for European countries has been in the works since the 1950s. The euro itself was conceived in 1992 through the Maastricht Treaty and was adopted as official currency of 11 countries in 1999. Two years later, the euro entered circulation in the financial systems of Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, and Finland.

Today, the EU currency is gaining ground as a major international currency after less than a decade of existence. It is involved in about 37 percent of transactions in the foreign exchange markets and is the second most commonly held reserve currency after the US dollar, making up one-fourth of the global reserves. It is believed that the euro inherited its strength from the German Deutsche mark, which also occupied a similar position after World War II.

The euro proves to be much greater than its predecessor though as it edges into becoming a major currency in the oil trade. For the longest time, oil has been exclusively traded in US dollars. Although the euro and yen have been gradually gaining access, the oil trade is still primarily dominated by the American currency. Speculations place oil sales in euro at 30 to 40 percent.

One of the technical difficulties involved in establishing a euro-denominated oil trading system is the absence of a standard pricing system or a euro-based oil marker. So far, the three oil markers in the industry namely West Texas Intermediate, Norway Brent, and the UAE Dubai crude are all dollar-denominated.

In 2005, it was reported that Iran was planning to put up an oil bourse that would trade petroleum, petrochemicals, and gas in non-dollar currencies, particularly the euro. This would establish a fourth oil marker that would pave the way for a euro-denominated trading system. Several dates have been set for the opening of the bourse but the launch itself has been postponed repeatedly. Iran has pushed ahead with its currency reserve diversification though and has accepted the euro and the Japanese yen as payments for its oil exports.

As of now, the euro remains strong in the forex market since it started appreciating in 2000. It has not fallen below parity with the dollar since 2002 although this can be credited to the intrinsic depreciation of the US currency. It also helps that the European Central Bank (ECB) is adamant on increasing interest rates to counter inflation.

The relative strength of the euro has caused fears of a decrease in European exports as US goods become cheaper and thus, more attractive. There have been official complaints and calls for the US to do something about the falling the dollar but the ECB itself currently shows no signs of cutting interest rates to offset the euro’s exchange rate.

Meanwhile, the euro nations or Eurozone has increased since 2001. In January 2007, Slovenia joined the Eurozone and on 2008, Malta and Cyprus are set to follow suit. Other East European countries are also aiming to adopt the euro as official currency but are still struggling to meet the standards for membership.



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