Stig Kristoffersen wrote:


What currency will have the strongest potential in the short and long terms?

There are several trends in the currency market, which signals that the Norwegian Kroner (NOK) has a potential to be the stronger currency in the short to medium term (18-24 months time).

As the economic downturn ripples globally, the economic development during 2009 becomes a hot debate in the U.S and EU. It will become clearer which currency of USD and EUR will become the global currency leader, or if both will be replaced by other currencies in the mid to long term perspective. IMF;s Special Drawing Rights (SDR) has become a topic of discussions whether it will play a stronger role as global reserve unit, and replace USD.

At the moment there seems to be some appetite to purchase USD debt which can be realized in 24 + months time span, and give strength to other currencies, like Chinese and Japanese currencies. We have to look closer into who is purchasing this debt and what is the potential for these to realize some profit from these assets in medium to long term perspective.

G20 leaders have made clear that for now the dollar’s status as the dominant reserve unit remains, but the idea of creating a new reserve currency system based on SDRs has not entirely been discarded. The SDR (Special Drawing Rights) of International Monetary Fund (IMF) has a set of currencies in its basket, which makes it another measure for currency. There has been discussions lately to include more currencies into the SDR basket, however at the moment IMF has not been willing to make any adjustments to the SDR composition. It has also been discussed to use Gold more actively into the SDR. Again IMF together with G20 has not yet adopted any statement on this issue either.

More effective use of gold and gold and forex reserves in this system, could dilute the SDR, which IMF is afraid of at the moment.

The trends of various currencies versus the Norwegian Kroner (NOK) have had a distinct development through 2008 up till March 2009. These trends have been offset in time during 2008, however it seems like the trends have become more synchronized as time has passed, and today it looks like these trends are identical.

The overall picture is that the NOK has strengthened itself towards two major currencies like USD and EUR in the period of August 2008 up till today. This strengthening has seem to found a semi-stable level at the moment, which has increased the value of the NOK vs EUR and USD substantially.

Whether this picture is sustainable or not, is a matter we have to look into at other places than the immediate trends between these currencies. The Norwegian D has kept up better than most nations during these past 6 months time, and was the only one with an expansion during last quarter of 2008. In addition Norway has a net export balance in their national budgets, which is further assisted by their strong currency. However whether the strong currency will counteract the export volumes remain to be seen. Norway’s major export article is oil and gas, together with fish. Oil and gas prices has found a semi-stable level at the moment, which will stabilize the Norwegian budget income level, as for fisheries, this could be another matter as EU is the main market for the fish, and purchase power has been drastically cut the last 6 months and seem to stay that way for at least 24 months time.

Overall, it seems like the NOK will keep its level versus other major currencies for at least 18-24 months time, since U.S actively try to keep USD low due to need for increase in their export to reduce the deficit of their budgets both in short and long term.

EU has kept another profile in their rescue attempt of the EU zone economy, and has not used as an extensive bail out package as U.S has. This has also lead Central Bank of Europe not to cut the interest rate as dramatic as the U.S. has done either.

This can somewhat be reflected in the currency exchange rate between these two.

It is observed that USD vs EUR trend is not stable, despite the fact that the currency level has risen from 0.64 to 0.75 from August 2008 up till end of March 2009.

The cyclic trend rate between these currencies seem to indicate a somewhat unstable element, and macro economic factors need to be understood before any further trend can be predicted.

Let us look at some of the currency exchange trends between the NOK and major currencies like USD and EUR, as well as looking at the relationship between the USD and EUR.

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BHD vs NOK

Development as of August 2008. In the first 3 quarters of 2008 you had a level of 13.5 BD pr NOK, and it steadily increased up till Mid October 2008 when it stabilized at a level around 18.5 BD pr NOK.

The exchange rate has been hovering around 18-19 BD pr NOK up till beginning of March when it dropped to around 17 BHD pr NOK. However it seems like the NOK has strength enough to keep a level around 18-19 BHD in near future.

This is a around 3.48% strengthening of the NOK versus BHD currency.



USD vs NOK

Since BHD and USD is pegged to each other, the same picture as for BHD can be seen in the USD development versus NOK. A base level of around 5.1-.5.5 USD pr NOK existed till late August 2008, when it steadily increased to around 7.0 USD pr NOK in Mid October 2008, and has been at this level till beginning of March 2009, when it made a small drop to around 6.5 USD pr NOK and seem to strengthen a bit.

NOK has strengthened with around 34.6% from 2008 and today.



EUR vs NOK

The development has same trend as in USD vs NOK, however it is delayed as a stable level of around 8 EUR vs NOK existed up till beginning of September 2008, and steadily increased to a peak level in end of December 2008 at around 10 EUR pr NOK. It has since then declined to a level around 8.7 to 9 EUR pr NOK since then, which seems to be a stable level for the NOK.

The Norwegian Kroner (NOK) has increased its value versus EUR with around 10% from the 2008 up till today.



USD vs EUR

Development has the same macro trend as EUR vs NOK and USD vs NOK, however it shows a pre-cursor trend versus the others, as the increase from 0.64 EUR pr USD to a level of 0.79 started already in end July, start of August. This is around 2 weeks before the other movements started.

The peak level of around 0.78-0.79 EUR pr USD held itself to beginning of December as it fell to a local low of 0.70 EUR pr USD in Mid December 2008, and began to steadily increase with a new local peak level of 0.79 EUR pr USD in beginning of March for then again to drop off to a level of 0.75 where it is in end of March. Overall the EURO has strengthened versus the USD with around 17% since 2008 stable level.

The USD vs EUR was a pre-cursor trend for other currencies vs NOK in 2008, however the trends have harmonized and are synchronized as we see it today. Therefore we can not use this trend any longer to predict the exchange rate between USD and NOK, neither EUR vs NOK.



Uncertainty in the global economic picture as the global financial and economic turmoil ripples through the world, makes it impossible to make certain logical predictions when it comes to currency trends in the near to mid term future.

However, if any safe haven is seen from the available economic data, it seems like Norwegian Kroner (NOK) could be a valid candidate to purchase in the short to mid term.

However, it is highly unlikely that this small national economy can play a major global role in the longer term.

The availability to resources needed for primary consumption will in the future play a more and more important role from a currency standpoint of view.

As seen up till now, that oil and gas resource dependencies as well as the control of this, decide lots on how a currency is valued.

In the future, water and certain agricultural resources could play a more important role to how a currency is valued and trusted.

Therefore it is a valid viewpoint to look into whether USD is a currency the world should use in the future, as U.S economic leading role has been questioned in the last 12 months.

There are discussions whether IMF’s SDR should be used more to stabilize the global reserve funds on the longer term.

Adding to the mix is the political dependencies of a nation or region to others, which complicates the currency valuation. At the moment there is hectic movments in controlling currencies, which almost is on the brink of a global currency exchange war. Protectionist trends to protect its own export industries can come more into play as well in this respect.

To give some background and understanding of the SDR, I have included a short summary of the SDR in this article.

The SDR is defined in terms of a basket of major currencies used in international trade and finance. At present, the currencies in the basket are, by weight, the United States dollar, the euro, the Japanese yen, and the pound sterling. The amounts of each currency making up one SDR are chosen in accordance with the relative importance of the currency in international trade and finance. The determination of the currencies in the SDR basket and their amounts is made by the IMF Executive Board every five years.

At the moment the composition valid for the period from 2006 to 2010 is as follows;

USD – 44%

EUR – 34%

Yen – 11%

GBP – 11%

These relationships have been more or less stable since the introduction of SDR in 1981.

There are both pros and cons of using SDR as a global currency reserve, but we will not discuss these here.





SDR versus EURO, NOK and USD

As we can see, the major currencies EURO and USD makes SDR stable versus these two currencies. However as seen versus the NOK, the same trend as for both USD and EURO separately, the same repeats itself for SDR with an increase of NOK value versus SDR in late August, beginning of September 2008. The SDR flattens out versus NOK at around 9 in March 2009.





Racquetball

Anon wrote:


I’m travelling to Brazil, and not sure how the exchange works. I am advised to exchange my money at a jewelry store, but don’t know any nearby the place I’m going to. Do the jewelries store really accept currency exchanged?

Sandra Stammberger wrote:


Forex is a stock market that is based on the trade of Liquid currencies. Liquid currencies are the currencies of countries which have the stability to back up their currency with commodities such as gold and silver. Forex currency trading has become the working man’s stock choice because you are able to trade at your convenience 24 hours a day.

Forex currency trading has become popular because it is backed by the world’s leading financial institution and you are playing the stock market based on cash and not just supply and demand, your placing your money in the market hoping the exchange rate you are buying into will come out in the end with the most profit. For example If you are placing your money being USD into the forex currency trading market and your currency of choice for the trade gains backing and increases in exchange rate, you make profit.

Forex currency trading is effected by many different variables which change day to day. Some of these variables include economic and political conditions in each respective country offering their currency on the Forex market. If the economy takes a hit on any given day, you can be sure you will see a drop in the currency exchange rate and you will experience a greater loss. During war, if a specific country is at war with another country you can also guarantee there may be a greater loss due to the fluctuation of the exchange rate of the currency being traded.

If a country sees an increase in economical gain, such as the opening of new trade routes or new commodities being traded internationally, then you would expect that the cost of the currency exchange for their currency would increase, making their currency worth more than the previous day. In turn, inflation in the currency exchange rate would prove profitable if the trader sold their shares high. As they say in the stock markets you want to buy low and sell high. If conditions become poor in a country whose currency is traded in the forex market then you may risk losing money. This is why forex currency trading has become a widely popular practice.

Because of the ever-changing world we live in most people who participate in forex currency trading are doing so on a short trading timeline. Because of things that may happen with any one particular economy on any given day and even people believing some rumors about a countries prosper or demise, it is most common for forex currency trading participants to sell their shares in a more quick manner than they would do so in a standard stock market situation.

If you place your money in the forex currency trading on the Japanese Yen, and then you hear that Japan just launched a new brand of electronics that will be popular all over the globe, or if you hear of 2 Japanese electronics companies completing a merger to provide consumers with a better product, you would assume by the rumor mill that the exchange rate of the Yen will be set to increase, and you will want to hold your place in that market, only to find out the exact opposite. For example, a automotive plant has decided to shut down production and lay off many of their employees, which would cause the exchange rate of the Yen to drop. Since you decided to hold on a rumor, and the opposite occurred, you would lose more money instead of reducing your risk by selling based on major trend and fact instead of rumor.



Find Your Niche

lil_american_chic2121 wrote:


What effect does devaluation have on a nation’s currency? Can you think of a country that has devaluated or revaluated its currency? What have been the results?

Part Time Income

Tim H wrote:


There is a currency investment that follows the price of gold so and advertisement say,s. What would it be?

Jason Fielder wrote:


Forex currency trading is becoming increasingly popular as more and more traders want to take their shot at the largest trading market in the world. The lure of nearly $2 trillion in trading going on each and every day is too much for most traders to resist.

So what is the Forex market, and how does currency trading work? Forex is an abbreviated term for foreign exchange market. The Forex is the largest financial market in the entire world, with an average trade volume of nearly two trillion dollars per day. The modern Forex market is what evolved from initial currency trading.

The idea is to use fluctuating currency rates to make money out of money. For example, let’s say you buy one mini lot (1 mini lot = 10,000 currency) of the EUR/USD at a rate of 1.1500. Two days later the markets shift and the EUR/USD is now 1.1525, and so you decide to sell. Using the formula to figure out profits/losses, 1.1525-1.1500 is .0025 * 10,000 (the size of the mini-lot) = $25. In this case, a $100 investment for one mini lot yielded a $25 profit, or 25% in only two days. Not a bad percentage by any count. That’s quite a profit for two days.

This is a simplified example, and as with any trading there is always the chance of loss, but this gives you an idea of what traders are shooting for when investing in Forex currency trading and why the potential for profits is so high. Forex currency trading is conducted using “pairs.”

The reason for this is that to trade Forex you are basically simultaneously buying one of the currencies, while selling the other. If you are selling the EUR/USD pair, then you are selling Euros in order to buy dollars.

Let’s use the earlier pair as an example. If you are trading the Euro versus the US Dollar, your currency pair is EUR/USD. The Euro (EUR) is referred to as the base currency while the US Dollar (USD) is referred to as the cross currency. The base currency is the one you are selling, while the cross currency is the one you are buying.

There always has to be a pair. To buy one currency, you have to do it with another. To sell a currency, you need to get your profits back in another. There must always be two currencies in any Forex currency trading.

The far majority of the Forex trading done in the world takes place between eight currencies: the United States Dollar (USD), Australian Dollar (AUD), Great Britain Pound (GBP), Canadian Dollar (CAD), Swiss Franc (CHF), Japanese Yen (JPY), and the Euro (EUR). Other nations’ currencies may be used, but these are the currencies that are most often used and profited from because they have the most demand and come from the most stable economies.

I hope that gets you started into learning about Forex currency trading, but you should know that you will always need a good proven system to make a profit in this volatile market.



Beautiful Women Discussion

Baby, I’m Anxious wrote:


Also, how much would my $100 be worth, if I were to exchange it into that currency?

Your help is very much appreciated. Thanks in advance!

David Gabbitas wrote:


Money has been an indispensable part of modern human civilization. We have always had money in various forms - stones, shells, gold, paper, or metal. Money signifies wealth, work, earnings, possession of goods, and a more efficient practice than bartering or pilfering. To the majority, money encourages growth as an earner, control over poverty and dilapidation, freedom from worry and lack of material goods, and worth in the eyes of our society. Even after globalization has spread, we have to have money changed from one type to another when travelling to other parts of the world. So whether you are a business tycoon or a tourist, you ought to have detailed information on foreign currency exchange.

If you are planning to buy property overseas, make a purchase in some other country, or are already making regular overseas transfers, you need a dependable, cost-effective currency broker. The currency broker can help you in performing the foreign currency exchange procedures with speed and ease and can also help you with useful information on competitive exchange rates. The main aim of any such business is to assist you in saving the maximum amount of money by effectively managing currency exchange.

Before selecting appropriate foreign currency exchange service providers, make sure they provide the following services:

• Spot currency to give you instant access to foreign currency

• Forward contracts – the buy now, pay later scheme

• Protection against unexpected currency movements

• Information of various ways to take advantage of unexpected currency movements

If a foreign currency exchange consultant is offering these services you need not look any further, but simply go and hire its services.

If you are frequently travelling abroad and convert currencies, you must be aware of the fact that foreign currency exchange rates always fluctuate. For instance while you are leaving a country, the exchange rate is favourable. Naturally, you may wish to calculate the amount of foreign currency you will need for the entire trip and buy it all at once. However, if the exchange rate is poor and you think it may improve, you may wait a little before buying all the currency you need.

This may sound complex, but if you have the services of experts who are aware of all the market movements and forecasts, they can guide you and get you the best currency exchange deals. If you want to find such a team of experts and professionals on whom you can depend entirely, contact AFEX. Associated Foreign Exchange Inc or AFEX is UK’s leading financial company providing the best foreign currency exchange services.

AFEX has years of experience in the foreign exchange market and makes sure that you don’t face any problems while transacting. To make your foreign currency exchange easy, AFEX appoints an Account Manager to you. This personal Account Manager looks after all formalities and keeps up to date with useful information, and simultaneously, keeps you informed. For more information on foreign currency exchange, foreign currency transfers, and foreign currency exchange, simply visit www.afex-uk.com.



Fishing Discussion

zoidblerg wrote:


I want to exchange my dollars for another currency. What is the cheapest way to do this?

Home Decorating

Blaster XL wrote:


When you are in a foreign country, where do you go to get your dollars exchanged for local currency?
Is there a way you can exchange it right here in the U.S.?

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