US Dollar (Part III)

By Ahmad Hassam

Prior to September 11, US Dollar was considered one of the premier safe haven currencies in the world because the risk of severe US instability was considered to be very low. United States was known to have one of the safest and the most developed capital markets in the world.

Almost 76% of the global currency reserves were in US Dollar. This allowed United States to attract investments from all over the world at a discounted rate of return. Foreign investors and the Central Banks are not so sure about the US Dollar due to the increased US uncertainty like the present recession and decreasing interest rates.

Important countries that peg their currencies to US Dollar are China and Hong Kong. Many developing and emerging countries peg their local currencies to US Dollar. China is a very active participant of the global currency markets because its maximum float per day is controlled within a narrow band based on the previous days closing US Dollar rates. Any fluctuations beyond this band will invite intervention by the Chinese Central Bank that may include buying and selling US Dollars.

EU represents a market as large as US with its own single currency Euro. The emergence of Euro is also threatening the US Dollar as the worlds premier reserve currency. Euro has provided an alternative to the US Dollar. With the passage of time, it is feared that Euro will emerge as a strong challenger to the dominance of US Dollar. Recently a group of countries like China, France and others have called for the introduction of a new global reserve currency by the IMF that should replace the US Dollar. If this happens in the next few years, it may have far reaching implications of the US Dollar and the US economy.

Due to the present financial crisis in the United States, many analysts fear a major devaluation of US Dollars. Many central banks have already begun to diversify their foreign exchange reserves by reducing their US Dollar holdings and increasing their holdings in Euro and the gold. Interest rate differentials can be a very strong indicator of potential currency movements because the US markets are the largest markets in the world and the investors all over the world are very sensitive to the yields offered by the US assets. The interest rate differentials between the US Treasuries and foreign bonds are followed by the professional forex traders with keen interest.

Market participants also closely watch the US Dollar Index as an indicator of overall US Dollar strength or weakness. The USDX is a futures contract traded on the New York Board of Trade (NYBOT). It is important to follow this index because when the market analysts are talking of general US Dollar weakness, they are referring to this index.

The US Stock and Bond markets also impact US Dollar. Cross border merger and acquisitions involve big forex transactions and are also very important for forex traders to watch.

The following economic indicators are important for the US Dollar: Employment, Nonfarm payrolls, Consumer Price Index, Produced Price Index, GDP, International Trade, Employment Cost Index, Industrial Production, Consumer Confidence, Retail Sales, TIC Data etc. - 23196

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and currencies. Try Strignano's Forex Signals free. Discover a revolutionary Forex Robot Trading System!

To Learn Forex

By Bart Icles

As much as you give yourself time to learn the basics of the forex market, as well as some advanced ideas about it, it also helps to learn forex trading myths to keep yourself aware. These myths can as easily trick you to making the biggest mistakes in forex trading that can prove to be damaging, especially to newcomers to the currency market. More often than not, there are many newcomers who fall into the array of forex traders who end up losing their money because they are all too caught up in believing that forex trading is a get-rich-quick scheme. This is just one of the many forex myths that you should learn so you can keep yourself from making the biggest forex trading markets that any trader can commit.

Forex trading is not a simple buy and sell thing and it does not offer any get-rich-quick promises. Currency trading requires a thorough understanding of what the different trading systems are and how you can use trading signals to your advantage. To learn forex trading basics is just the start. This unpredictable market might require you to go through a series of losses first before you can fully understand the different crafts used in the trade. Keep in mind that forex trading is far from child?s play.

With this said, it also helps to take note that forex trading is far from playing online casino games. There are those who equate trading to gambling but this should not be the case. In forex trading, your success does not totally rely on luck. Your success can also be defined by how well you are able to understand and use macroeconomic indicators to your advantage.

If you are thinking that forex trading is just for the rich and famous strategists, you can never be more wrong. The currency market is by far one of the easiest markets that newcomers can join. You simply need a computer, an internet connection, some spare time to spend on trading, and about a couple of dollars in capital. If you were able to spend enough time to learn forex basics and myths, you will be able to distinguish which things to do best in certain situations that will eventually help you rake in profits.

So remember, to learn forex basics is not enough. You should also learn about the different forex myths so you can develop ways son how to avoid them. Awareness can just become your key to success in this rewarding yet unpredictable market. - 23196

About the Author:

When you learn to trade the forex it starts with a desire to learn and a drive to become a great trader. When learning forex trading realize it takes dedication and a good teacher. But once you learn how to trade and do so successfully your life will change and you have options and financial resources you never had before.

Guaranteed Bad Credit Loan

By Jason Myers

How frequently do you find yourself needing some extra cash? Maybe a new list of large bills has originated some monetary issues. Or maybe your car has packed in and will not run another yard any longer. You could even simply wish to go on a family holiday or consolidate some of your other existing debts. Whatever the reason, in this instance you would usually just call your bank and apply for a loan. But, what do you do if you have a bad credit rating and need a loan?

I'm sure you have seen a lot of TV ads or newspaper advertisements that say they provide guaranteed bad credit loans. It doesn't matter whether you own late or missed payments, arrears, defaults, CCJ's or even a bankruptcy, these companies will always give guaranteed bad credit loans.

It isn't until you take a closer look at some of the terms offered with your loan, that it no longer looks like a good suggestion. I, personally, have seen situations where a company will provide guaranteed bad credit loans, but at an interest charge more than 500%. In other words, you would have to pay back 5 times the amount your initially borrowed each year! I must admit it is a nightmare sometimes trying to find a loan when you have a less than perfect credit record.

However, you will discover that there are a number of intermediary companies out there to help you. So preferably than having to do all the work yourself and receiving refusal after refusal, you can have somebody else do the work for you.

A lot of these intermediary businesses have a large list of lenders who offer guaranteed bad credit loans and in actual fact only deal with individuals with adverse or bad credit. You can check the list of lenders until you find one suitable for your needs.

These lenders will provide most types of credit to individuals with a bad credit rating, but simply lend money based on affordability. Therefore instead of "blacklisting" you due to your credit score, these lenders will calculate what they determine is affordable for you and then lend you money consequently! - 23196

About the Author:

Jason Myers is a professional writer and he writes mostly about free credit reports news. He's also interested in repair bad credit guides.

Home Equity Loan Facts

By Doc Schmyz

Home equity loans are a great source of cash. However, before you plunge right into the process of drawing out a loan out of the equity of your property; you should take a look at the fine print and what it means to you.

Are you debating on getting a home equity loan? Home equity loans might be an easy to acquire type of loan, but somehow even a seemingly great deal might turn out to be bad if the process of getting one is not done right.

Let us look at the following areas to better understand the "speak" used for this type of loan.

Points

How are you affected by this? Most of these lenders charge a part of the loan for commissions for themselves and for their sub-agents. Actually such points vary from little to exorbitant; it all depends on the company and the type of loan. If you are charged 1 point, this would mean 1 percent of the loan. And so 1 percent of a 100,000 dollar loan is an up front charge of 1000 dollars. Do not worry, there are lenders that do not charge points.

Loan "rate" terms

It it a fixed or variable loan. If it is a fixed loan, then you do not have to worry about external forces such as economic situations directly affecting your interest rate. But on the other hand, if you have variable type of loan, you may actually have an initial good interest rate. Interest rates that go up naturally makes your monthly payments go up too in the process. So what do you want " a home equity loan with interest rate that stays the same all throughout the duration of the loan, or one with the possibility of going up anytime? Understand that more often then not, a variable loan starts out one or two percent lower then a fixed rate. The big question is where does it stop once it starts to adjust?

Pre Payment penalties

Perhaps it might be a concern if you earn penalties for paying off your loans early. You have to be aware that indeed, many second time loans have pre payment penalties. Pre-payment penalties lock you into paying off your loan over its entire duration, and if you still decide on paying it off early, the lending company will have to add a penalty, usually running to a thousand dollars.

Late payment penalties

In some cases, while you may have a low interest rate, you may have a clause in the contract for the loan that will increase your interest if your late on a payment. In most cases this can add up to several thousands extra over the life of the loan.

Insurance

You have to check if the home equity loan that you are prospecting has insurance costs hidden somewhere, a cost that you definitely do not want. Whenever you get a loan, you can take in corresponding credit insurance. You can have credit life insurance, which takes care of your loan in the event that you die. However, if in the case of home equity loan, if you feel that insurance is just added cost, then by all means avoid the lender that requires you to pay for them. - 23196

About the Author:

Doc Schmyz has invested all over the US and Canada. He built a free website shares Real estate investing information for all over the US. Find real estate information by state

What Can Your Penny Stock Broker Do For You?

By Malcolm Torren

One of the most fragile and information-sensitive investments are penny stocks. They are less liquid compared to other investments. The stocks are prone to fraudulent activities both online and offline. Stock prices are difficult to price accurately thus lure in scheming opportunists. Also, there is lack of information in companies that sell their penny shares. With all these potential risks mentioned, you need a best friend in the business. The penny stock broker can help you with your investments.

Firms and brokerage companies are the middle ground between a stock seller and a stock buyer. If a company sells the stocks, someone has to buy it. The penny stock broker will facilitate and the transaction is completed. But in practice, this is not as easy as it is described here. It's much more complex and requires special stock market intelligence. This is like an advanced buy-and-sell procedure where investors win and lose everyday.

- How can these brokerage firms help you? Movies about big corporations usually have scenes of a major stock exchange. It would seem like everything in the trading floor is messed up. On the contrary, it is very well in order. If a small cap company sells shares at a low start and someone buys them, the brokerage is behind the dealings. The penny stock broker is like the gatekeeper of your stocks. They guard your investment safely from market manipulations.

- What is their leverage? The greatest advantage of working with a penny stock broker is that they are the most exposed entities in the business. They understand the loops inside and out. They can give you sound advice on what stocks to buy, when to buy them, and how. Of course they would also advice you what stocks to sell, when, and how to sell them. Whether you win of you lose, they will always be your ally.

- If you lose, will they lose, too? No. A penny stock broker is not the investor. They are the middle men and technically speaking, they don't have any interest that contradicts yours. Therefore they don't have anything to lose or profit. What they are providing is service. They do you a favor of facilitating your investments hoping that you will profit and they will get a commission.

- So can they make money if you lost your investment? If your stocks fell and you didn't make any money, they get the commission elsewhere. The penny stock broker survives and sustains their service by handling many clients. So they're basically a service oriented firm with a list of clientele. You are one of them.

- Will it be fair if you lose while they still earn? Honestly, yes it is. But most of these brokerage firms advice you to spread your investments to as many share to many companies as long as you can still afford it. So that way, if you lose from one investment, you might gain from the other. That's another way to make a good bargain. And you may have another broker to assist you with your other investments.

A tip for you, though: many ambiguous claims of cheap stocks pretend that he or she is a legit penny stock broker. Shares are lowered to the most affordable rate because of the fact that penny stocks are priced inaccurately. If this happens, check on their track record if there's any document available. Report any activities of this kind to the SEC. - 23196

About the Author:

Watch out for penny stock pick frauds. Find an online penny stock broker today.