Russian currency in Forex: how the volatility is prevented?
Russian currency is one profitable currency which has been recommended by innumerable large banks of the world. Russian Rouble, for the past 500 years, has been established as the chief currency of Russian federation. Currently, it is being promoted as one of the most intelligent investments of the season.
Belief of the banks
Most of the banks believe that in the coming future, there would be a dramatic strengthening of the rates of the rouble. The impact of the currency meltdown and the global recession along with the spiraling rates of inflation has been jeopardizing the quotes and exchange rates of different currencies, thereby weakening their establishment in the forex market. so let's take a look on what the situation of Rouble has been undergoing over the past few months.
According to the Bloomberg, it has been opined by the Goldman Sachs, Merrill Lynch and Co and Deutsche bank that the exchange rate of rouble will undergo an increase to 4 % in the coming year. Thereby, the weakening of the existing inflation would take place as the Central bank of Russia would have to face tremendous pressure, which would later only cause the rouble revaluation. Though, the essential opinions of the western bankers have not been evaluated so far. Alexey Uljukaev, the vice president of the bank of Russia declared that the currency purchase of around 20 billion dollars had been taken into implementation, as one of the pivotal steps to limit the strengthening of the exchange rates of the rouble in the coming future.
Response to Banks recommendations
In return to the recommendations of the largest banks of the world for the purchase of rouble, the Bank of Russia clearly opines that the entire case is purely speculative. The increase in the exchange rate, which has been predicted by the three banks, tends to be one of the major troubles for the Russian economy, as it would increase the rate of inflation, which already has touched 13% in April. At the same time, the rouble strengthening would also have detrimental impact on the exporting of gas and petroleum.
But the Central bank also opined that the large reserves, balance payments and important economic indicators would be enough to prevent the devaluation of rouble, in spite of the global crisis hitting the shores. The Central bank also promises that no kind of volatility would be added in terms of the valuation of the rouble.
Financial position in 2007
Delving into the history, it's revealed that in the year 2007, the bank of Russia had supported the rouble strengthening during the inflation development to 8.5%. But at present, the inflation rate is about to cross 13.3%, which is at least five times more than the cumulative average index. Though, the consumer costs, which are restrained, have still not been affected by the two continuous discount rates issued by the Bank of Russia. Thus, at present, the cost of growth of the rouble continues to be the crucial tool to fight against the inflation, as mentioned by the Central Bank.
Thus, the expectations of the leading banking cooperation have transformed Rouble into one of the most perspective and anticipated currency of the world in forex marketing. Though, the manner in which its demand is growing, it would automatically cause the strengthening of the rouble.
Thus, on one hand the pioneer banks of the world proclaim the rouble strengthening which might occur within the coming 6 months, the Central Bank confidently declares that it has means to control the rouble fluctuations, which would definitely play a pivotal role in Forex trading.
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Facts about Argentinean currency - Argentine peso.
Fact 1 - The law that re-established the gold standard requiring to supply all new liabilities with 100 percent gold reserves known as Caja de Conversion, conduit for uncovered paper money has passed in 1899 in Argentina while the entire system started working in 1902.
This currency began very fast development and starting from 1913 started its expansion throughout the world. Such regions as Africa, Oceania, the Middle East, the Caribbean and East Asia have created the currency boards while Argentina and South America had it.
The fears of Argentina government of a possibility for gold leakage to the countries having the gold standard suspended forced it to hold the system up as soon as at the beginning of the First World War. The currency board re-establishment in 1927 to 1929 and its following suspending in 192 caused the collapse of the investments to Argentina from abroad due to the stock market crash all over the world. The necessity of the system withholding seems uncertain by Hanke of 1995 as far as the Caja's and commercial banks' gold supplies were rather high.
The monetary authorities suffer pressure of currency boards like of the classical gold standard. Still the monetary authorities traverse among these pressures. The authorities seem to maneuver following the limitations of the board-like system of the currency of Argentina taking into consideration its latest processes. The monetary authorities made lots of attempts to establish the system of absolutely fixed rates, Argentina's rule-bound, but they were unsuccessful due to the annoying pressured described above.
Fact 2 - Argentina have created a currency broad system that was toughly tied with the dollar at the parity one-for-one. Argentinean government has relied on this system thinking that it would preserve its economy from any negative affection caused by a Mexican crisis. Practically they made sure that the crises offered by the canonical crisis model had no effect on Argentina. Another hope was that if there were not any trade relationships with Mexico then no harmful processes can spread. Though the currency has suffered a number of speculative attacks aimed at the unemployment rate reduction in Argentina as a consequence of the currency board disappearing.
Fact 3 - Before the July/August of 2001 the economy of Argentina used to be in periodical crises within 20-30 years. As much as eight plans of economy stabilization and a number of various reforms were held these years to defeat the hyperinflation and make the currency stable. The "dollarization" of the economy took place in Argentina by the late 1980s because of failure of any economy stabilization efforts. The Argentineans started losing any confidence in their national currency that caused transactions conversion into dollars. The prospective of the U.S. dollar losing its worthiness threatens to the American people either.
Fact 4 - The artificially supported exchange rate regimes, Asian ones particularly, have gained the momentum and preceded the 2002 currency crisis in Argentina. After the crisis in that region in 1997 the countries started a research aimed to find out whether any external measures can prevent such crisis repetition. The regional liquidity increase was the first attempt of the developing institution to make such kind of precautions and the further ones were aimed at the greater monetary policy. The currency board regime was set up in Argentina on the April 1, 1991 to exist until January 6, 2002 . This regime has created one for one artificial attachment of the Argentine peso to the U.S. dollar. According to Hanke and Schuler, 2002, this regime has not been an adequate currency board. There are three main criteria: the anchor currency must have a fixed exchange rate defined by the board; it must be entirely convertible that means that the anchor currency should be exchanged into or out of any currencies freely; the currency board must have a strong supplies with the stable assets, a foreign currency for instance.
Fact 1 - The law that re-established the gold standard requiring to supply all new liabilities with 100 percent gold reserves known as Caja de Conversion, conduit for uncovered paper money has passed in 1899 in Argentina while the entire system started working in 1902.
This currency began very fast development and starting from 1913 started its expansion throughout the world. Such regions as Africa, Oceania, the Middle East, the Caribbean and East Asia have created the currency boards while Argentina and South America had it.
The fears of Argentina government of a possibility for gold leakage to the countries having the gold standard suspended forced it to hold the system up as soon as at the beginning of the First World War. The currency board re-establishment in 1927 to 1929 and its following suspending in 192 caused the collapse of the investments to Argentina from abroad due to the stock market crash all over the world. The necessity of the system withholding seems uncertain by Hanke of 1995 as far as the Caja's and commercial banks' gold supplies were rather high.
The monetary authorities suffer pressure of currency boards like of the classical gold standard. Still the monetary authorities traverse among these pressures. The authorities seem to maneuver following the limitations of the board-like system of the currency of Argentina taking into consideration its latest processes. The monetary authorities made lots of attempts to establish the system of absolutely fixed rates, Argentina's rule-bound, but they were unsuccessful due to the annoying pressured described above.
Fact 2 - Argentina have created a currency broad system that was toughly tied with the dollar at the parity one-for-one. Argentinean government has relied on this system thinking that it would preserve its economy from any negative affection caused by a Mexican crisis. Practically they made sure that the crises offered by the canonical crisis model had no effect on Argentina. Another hope was that if there were not any trade relationships with Mexico then no harmful processes can spread. Though the currency has suffered a number of speculative attacks aimed at the unemployment rate reduction in Argentina as a consequence of the currency board disappearing.
Fact 3 - Before the July/August of 2001 the economy of Argentina used to be in periodical crises within 20-30 years. As much as eight plans of economy stabilization and a number of various reforms were held these years to defeat the hyperinflation and make the currency stable. The "dollarization" of the economy took place in Argentina by the late 1980s because of failure of any economy stabilization efforts. The Argentineans started losing any confidence in their national currency that caused transactions conversion into dollars. The prospective of the U.S. dollar losing its worthiness threatens to the American people either.
Fact 4 - The artificially supported exchange rate regimes, Asian ones particularly, have gained the momentum and preceded the 2002 currency crisis in Argentina. After the crisis in that region in 1997 the countries started a research aimed to find out whether any external measures can prevent such crisis repetition. The regional liquidity increase was the first attempt of the developing institution to make such kind of precautions and the further ones were aimed at the greater monetary policy. The currency board regime was set up in Argentina on the April 1, 1991 to exist until January 6, 2002 . This regime has created one for one artificial attachment of the Argentine peso to the U.S. dollar. According to Hanke and Schuler, 2002, this regime has not been an adequate currency board. There are three main criteria: the anchor currency must have a fixed exchange rate defined by the board; it must be entirely convertible that means that the anchor currency should be exchanged into or out of any currencies freely; the currency board must have a strong supplies with the stable assets, a foreign currency for instance.
American currency (USA dollar, USD) in forex
First of all, you have to understand what Forex stands for, that is, foreign exchange. This is also called FX. When you trade in the Forex market, one currency is bought while another currency is simultaneously sold. Sometimes the foreign exchange market is called an over-the-counter market.
When getting into the nitty gritty of the Forex market, we see that currencies often trade in pairs; for example the Euro and the USDollar or EUR/USD or the US Dollar and the Japanese or USD/JPY. With the Forex market there is no centralized exchanged. All transactions happen by way of electronic network or by telephone.
The US dollar could finally break the ice this week. This currency continues to trade on the near critical levels on the Forex market today. The Forex market is still waiting for a directional break. However, commodity dollars such as the Canadian dollar as well as the New Zealand dollar have begun to tumble below key support.
While important rate decisions are to be announced and consumption and employment indicators are to be released, this week may be the one in which we shall see meaningful breakfast.
Two sources are responsible for the daily turnover in the world: foreign trade and speculation for profit. Most of the traders in the Forex market go for the largest, most liquid currency pairs such as the US dollar, Euro, Swiss Franc, Australian Dollar, Japanese Yen, British Pound and the Canadian Dollar.
When getting into the nitty gritty of the Forex market, we see that currencies often trade in pairs; for example the Euro and the USDollar or EUR/USD or the US Dollar and the Japanese or USD/JPY. With the Forex market there is no centralized exchanged. All transactions happen by way of electronic network or by telephone.
The US dollar could finally break the ice this week. This currency continues to trade on the near critical levels on the Forex market today. The Forex market is still waiting for a directional break. However, commodity dollars such as the Canadian dollar as well as the New Zealand dollar have begun to tumble below key support.
While important rate decisions are to be announced and consumption and employment indicators are to be released, this week may be the one in which we shall see meaningful breakfast.
Two sources are responsible for the daily turnover in the world: foreign trade and speculation for profit. Most of the traders in the Forex market go for the largest, most liquid currency pairs such as the US dollar, Euro, Swiss Franc, Australian Dollar, Japanese Yen, British Pound and the Canadian Dollar.
Forex: EUR/USD: Dollar recovery halts; Euro back testing 1.3615
FXstreet.com (Barcelona) – Dollar recovery has been capped at 1.3535, and the Euro has bounced up reaching levels above 1.3615, previous intra-day low.
If the Euro manages to remain above here, it could attempt a new attack to 1.3725/35 high. Above here 1.3795 (8 Jan high) would come into focus, and then 1.3854 (61.5 retracement of the December March decline). On the downside, reversal from current levels could trigger return to 1.3410, and below there, 1.3325 (Jan 28 high). Once below there, 1.3160 and 1.3078.
According to Valeria Bednarik, collaborator at FXsttreet.com, the Euro is prone for further depreciation: “Hourly charts are confirmer further downside correction for the pair, after breaking a short term flag to the downside. Low volume as traders await American opening, price is under the 20 SMA that is slowly turning down. 60 and 200 EMA the most, should hold the downside.”
If the Euro manages to remain above here, it could attempt a new attack to 1.3725/35 high. Above here 1.3795 (8 Jan high) would come into focus, and then 1.3854 (61.5 retracement of the December March decline). On the downside, reversal from current levels could trigger return to 1.3410, and below there, 1.3325 (Jan 28 high). Once below there, 1.3160 and 1.3078.
According to Valeria Bednarik, collaborator at FXsttreet.com, the Euro is prone for further depreciation: “Hourly charts are confirmer further downside correction for the pair, after breaking a short term flag to the downside. Low volume as traders await American opening, price is under the 20 SMA that is slowly turning down. 60 and 200 EMA the most, should hold the downside.”
Forex Brokers
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PayPal Forex Brokers — a list of Forex brokers accepting PayPal on-line payment system as a way to deposit/withdraw money to/from customers' accounts.
WebMoney Forex Brokers — a list of Forex brokers that accept WebMoney e-currency system as the fast deposit/witdhrawal method, offering high security combined with the fast transfers.
Muslim Friendly Forex Brokers — a list of Forex brokers that try to be friendly to Muslim Forex traders offering "no-interest" margin accounts.
Forex Brokers with Web Based Platform — a list of Forex brokers that fully support Forex trading without installing any trading software.
Moneybookers Forex Brokers — a list of Forex brokers that accept Moneybookers electronic payment system as for trading funds transfers.
Forex Brokers with CFD Trading — a list of Forex broker companies that allow their traders to trade not only Forex, but also CFDs (Contracts for Difference).
Forex Brokers with Advanced Trading Platform — a list of Forex brokers with unique and powerful Forex trading software.
Institutional Forex Brokers — a list of on-line Forex brokers that are backed by strong and respected off-line financial companies.
ECN Forex Brokers — a list of on-line Forex brokers that act as ECNs (Electronic Communication Network) offering Forex traders highly competitive spreads.
e-gold Forex Brokers — a list of Forex brokers that accept e-gold payment system as the method of depositing/withdrawing funds to/from the trading accounts.
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