Australian Dollar Hits Year-High after Central Bank Statement

The Australian dollar reached the highest level versus its U.S. counterpart today after the national central bank Governor affirmed that the current crisis in the country may not be as serious as considered previously.

Yen Rebound After U.S. Confidence Report

The yen post the first significant gains in more than a week versus currencies like the pound and the euro after risk aversion returned to markets today, pushing investors towards the safety of the Japanese currency.

Dollar Rebounds Versus Euro on Reports Speculations

The dollar reverted its trend of already two weeks losing versus several main traded currencies, after speculations that this week’s reports will post rather pessimistic figures, raising attractiveness for the safety of the greenback.

Brazilian Real Declines on Faltering Trade Surplus

The Brazilian currency posted a second day of losses versus the greenback as the national current account showed worse than expected data for the month of June, damping demand for the real in international markets.

Canadian Dollar Tumbles Again as Oil Slides

The loonie fell again today after having interrupted its rally versus the greenback on Tuesday due to a fall in crude oil rates, affecting directly the commodity-linked Canadian currency.

British House Price Data Influence Pound

The Great Britain pound recovered from the two days of losses against the U.S. dollar and continued to gain against the euro today after the U.K. house prices data was released.

Is GDP Optimism Bad for U.S. Dollar?

The U.S. dollar is falling against the euro for the second day today as the traders expect a decline in the contraction of the U.S. GDP for the second quarter of 2009.

The yen lost against all 6 major currencies as stocks continued a rally that is already the longest since 2003 on speculations that the global slump m

The greenback posted a negative performance today as a decreased demand for safety made investors to leave the U.S. currency attracted to riskier assets in emergent markets.
The dollar lost today against several emergent market currencies as North American companies like Apple Inc. posted higher-than-expected earnings, raising investors’ confidence to purchase emergent market currencies like the Russian ruble, and commodity linked currencies like the Canadian dollar.
USD/CAD traded at 1.0990 as of 20:10 GMT after peaking at 1.1105 in the intraday chart.
If you want to comment on the Canadian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

Yen Declines as Stocks Rally Spurs Demand for Risk

The yen lost against all 6 major currencies as stocks continued a rally that is already the longest since 2003 on speculations that the global slump maybe ending, damping demand for the safe profile of the Japanese currency.

The New Zealand currency is trading this week near to a nine-month high versus the U.S. dollar, as corporate earnings and stocks performance attracted investors to the riskier profile of the kiwi if compared to more conservative currencies like the greenback and the yen.

Chilean Peso Hits One-Week Low on Copper Prices

The Chilean currency had a weakening performance today, as the copper, one of the main exports of the South American nation declined, damping demand for the peso.

South African Rand Climbs on Corporative Fusion Speculations

The South African Rand climbed sharply today as a stake in one of the main South African mobile operators may be purchased by an Indian group, injecting money in the country and raising confidence for the rand outlook

Euro Rises on Manufacturing Report Figures

The euro posted the first climb versus the U.S. in four days as this Friday a report indicated that the European manufacturing and services contracted at a slower pace, and German business confidence improved.

Pound Slides on Quarterly Recession Numbers

The pound posted losses today versus most of the 16 main traded currencies as today, gross domestic product figures released in the United Kingdom revealed that the quarterly recession in the European nation was more than double of what economists forecast.
The United Kingdom’s Office for National Statistics posted a GDP report today that indicated a contraction of 0.8 in the British economy, which is more than double of what most of economists suggested, raising concerns that the recession in the country will be deeper and longer than what predictions assumed, reflecting directly in the attractiveness of the national currency. The British economy is having its worst 12-month period since the second world war, as a credit crunch struck nation’s economy, followed by political crisis in the parliament, and a severe devaluation of the pound versus main currencies like the euro and the dollar. Today’s figures suggest that the situation will remain grim in the economic sphere for the United Kingdom.
Surprised economists affirm that even if they were expecting negative figures for the quarterly gross product in the U.K., the actual numbers were more than disappointing, raising immediate concerns about the British economic situation, damping demand for the pound and influencing negatively in British equity markets.
EUR/GBP traded at 0.8652 as of 12:30 GMT from 0.8610 yesterday. GBP/USD traded at 1.6460 from 1.6515 in the intraday comparison.
If you want to comment on the Great Britain pound’s recent action or have any questions regarding this currency, please, feel free to reply below.

The Canadian dollar ended another day gaining versus its U.S. counterpart, as government officials affirmed that the country may be already getting ou

The Mexican currency posted another week of gains versus its main trading partner’s currency, the U।S. dollar, as emergent-market currencies profited on higher confidence among traders.
Reports mainly in Europe this Friday indicating that the German business confidence improved, triggered speculations that the region may be soon out of recession, and consequently favoring emergent-market currencies worldwide, like the Mexican peso and the South African rand. Thanks to favorable reports, the Mexican peso finished a second week of gains versus the greenback.
USD/MXN traded at 13.2265 as of 19:47 GMT from 13.1975 yesterday.
If you want to comment on the Mexican peso’s recent action or have any questions regarding this currency, please, feel free to reply below

Canadian Dollar Ends Week High on Government Statement

The Canadian dollar ended another day gaining versus its U.S. counterpart, as government officials affirmed that the country may be already getting out of recession.

South African Rand Down on Merging Speculations

The South African currency, which hit an eleven-month high versus the greenback this week, pared its weekly gains as an Indian newspaper affirmed that the merging of Bharti with MTN may take longer than expected, raising concerns about investments in South Africa

The South African currency, which hit an eleven-month high versus the greenback this week, pared its weekly gains as an Indian newspaper affirmed that the merging of Bharti with MTN may take longer than expected, raising concerns about investments in South Africa.

EUR/USD has risen continuously after the pair fell to 1.4185. Since then the Euro moved with an upside bias and reached levels above 1.4230. The Euro was able to recover of previous losses during the American session. The pair is still moving sideways without a clear trend for the day and is 0.55% above the opening price, rising for the first time in four days. Against the Pound, the Euro is stronger today. EUR/GBP rallied to the upside after reports show a bigger than expected contraction in the United Kingdom. The pair is holding above 0.8600 and has recovered from Wednesday and Thursday losses

Fundamental Outlook for US Dollar: Bearish

It was a tenuous week; but the dollar was able to ultimately hold its own through the close. However, just because momentum behind the earnings-driven rally in risk appetite has stalled does not mean that the world’s most liquid currency has avoided a collapse all together. Sentiment winds have died down; but they can easily jostle the safe-haven dollar should another economic catalyst surface. This makes for an uncertain future when combined with the fundamental influence that the 2Q GDP report will have on the currency. Now, not only do traders have to interpret the data, they will also have to judge whether it has a greater impact on risk appetite or growth considerations for the beleaguered dollar.
Looking ahead to next week, the most immediate threat to the greenback’s stability is the intensity and direction of risk appetite. While this currency is deeply mired in speculation surrounding the economy’s leading or lagging growth potential, interest rate expectations, and deficit projections among other influences; risk appetite has proven itself to be insuperable. With the Federal Reserve vowing to keep the benchmark lending rate at levels that insure a carry status when conditions do turn around and politicians ensuring the economy will struggle with record levels of debt for years to come, there seems little doubt that the dollar will maintain its position on the opposite of risk appetite. But, considering the stalled progress most of the dollar and yen crosses saw last week; is there a strong shift in sentiment in the works? With EURUSD and GBPUSD just off of key levels of resistance, the pressure is growing. However, the primary source of momentum this past week – the second quarter earnings season – is already on the decline. If left up to the markets alone, equities have already forged new highs for the year; but commodities, fixed income and risk-sensitive currency pairs have not pushed to comparable levels. Oddly enough, one of the most likely catalysts for risk going forward also happens to be the most attention grabbing indicator on the US docket: GDP.
According to economists forecasts, the world’s largest economy contracted at a 1.5 percent on an annualized pace through the second quarter. This would be a marked improvement from the 5.5 percent and 6.3 percent rate of the recession through the first quarter of 2009 and fourth quarter 2008 respectively. This would certainly confirm policy officials expectations for a return to positive growth by the end of this year or beginning of the next; but through the near-term it is still a call for speculation to rank the economy’s performance against that of its major counterparts. China recently reported a sharp advance to a 7.9 percent pace of expansion while the UK printed a record 5.6 percent contraction. And, then there are still those economies that have yet to report their numbers. Japan suffered a record-breaking 14.2 percent slump through the first quarter, but is expected to snap back according to BoJ and Cabinet officials. The Euro Zone awaits it August 13th release, but the Bundesbank has already stated Germany saw only a ‘slight contraction’ through the second quarter. This will increasingly become a consideration of nuance.
The other facet of the US 2Q GDP release is that it will be accepted as a gauge of global growth. This further complicates the issue. Should the reading be good, the influence on risk appetite could outweigh the implications for US returns and actually drag the dollar down; and vice versa. Another important consideration is the timing of this release. Due Friday, speculators may decide to move the dollar before the data crosses the wires. If this is the case, the GDP report could factor into long-term projections but not short-term volatility. –JK

Standard + Poor's has put the UK credit rating on negative watch which has pushed the UK currency sharply lower

Standard + Poor's has put the UK credit rating on negative watch which has pushed the UK currency sharply lower

26-05-09. US confidence rises

US consumer confidence rose to 54.9 in May from a revised 40.8 the previous month, the highest sine September 2008 which will underpin risk appetite

27-05-09. US home sales rise.

US existing home sales increased to an annual rate of 4.68mn in April from 4.57mn. A further rise in inventories will offset any improvement in confidence triggered by the headline data

28-05-09. Jobless claims fall

US jobless claims fell slightly to 623,000 in the latest week from 636,000 while continuing claims were at a record high. A stronger figure for durable goods orders was offset by a substantial downward revision. The data is unlikely to spark any improvement in risk appetite

29-05-09. Weak Chicago PMI.

The Chicago PMI index fell to 34.9 in May from 40.1 previously which will reinforce fears over the auto sector

01-06-09. ISM rises

The National PMI index for the US manufacturing sector rose to 42.8 in may from 40.1 the previous month which will help maintain near-term optimism over the global economy. Perversely, this is again liable to be dollar negative

03-06-09. UK PMI rises

The UK PMI index for the services sector rose to 51.7 in May, the first reading above 50 since March 2008 which will reinforce UK recovery hopes

04-06-09 BOE on hold

The Bank of England has left interest rates on hold at 0.50% and has maintained the current quantitative easing programme

05-06-09. Payrolls surprise.

The decline in US non-farm employment was substantially lower than expected with a drop of 345,000 for May after a revised 504,000 drop previously. In contrast, the unemployment rate rose to 9.4% from 8.9%. The net impact will be to support near-term risk appetite which will weaken the dollar, although this may not be sustained

09-06-09. Sterling recovers

The easing of political tensions over UK Prime Minster Brown has allowed Sterling to recover ground against the dollar

Lower capital inflows.

US long-term capital inflow fell to US$11.2bn in April from US$55.4bn the previous month as some central bank Treasury holdings were reduced and this will tend to weaken dollar sentiment

Euro Continues Rally Against U.S. Dollar on Risk Appetite

The euro is having one of the most positive weeks against the U.S. dollar in two months, as a risk appetite wave brought investors to purchases euro-priced assets.

Canadian Dollar Down as Crude Oil Declines

The Canadian dollar, which started the week with an outstanding performance as traders, attracted by yield and driven by optimism, bought the loonie, fell today against several currencies as the crude oil, the main Canadian commodity export, declined.

Mexican Peso Falls Again on Crude Oil

Mexico is, together with Canada, one of the main energy suppliers for the United States energy demands, and its national currency, the peso, fell again today as the crude oil declined in New York.

Yen Rises After Hotel Blasts in Indonesia

The yen, known for its refuge investment profile, rose for another day versus most of the 16 main traded currencies as explosions in Indonesia brought a certain amount of tension to financial markets in Asia this Friday.

Pound Declines as Terrorist Attack Drives Traders to Safety

The pound posted its first day of losses versus the U.S. dollar this week as explosions in Jakarta, the capital of Indonesia, attracted investors to the safety of the greenback, stopping a five-day rally that brought the pound up on renewed economic hopes.

Chilean Peso Climbs on Copper Price

Chile’s is one of the world’s main copper producer and today this metallic commodity went up after a U.S. report, pushing the Chilean peso to higher levels as risk aversion declined among traders.

Brazilian Real Posts Biggest Gain in Two Months on Optimism

The Brazilian real, a high-yielding emergent market currency, ended this week’s session climbing massively against the U.S. dollar, as renewed optimism among traders attracted foreign investments, pushing the Brazilian currency up.

Dollar Slides as Optimism Attracts Investors to Yield

The U.S. dollar posted the weakest performance versus the euro since May as corporate earnings in North America came better-than-expect and U.S. government reports brought optimism to equities and currency markets, attracting investors to high-yielding options, consequently damping demand for the greenback.

Pound Strengthens on House Prices Climb

The pound started the week climbing versus the yen and the dollar, as stocks rose and the house prices in the U.K. had an increase in the month of June, raising attractiveness for the British currency.

Australian Dollar Hits Two-Week High on Stocks

The Australian currency, often referred as the Aussie, strengthened to a two-week high versus the yen as stocks in Asia climbed this Monday, raising attractiveness for the yield of the Australian dollar.

Japanese stocks down, yen holds steady

Japanese stocks fell driven by a weaker US consumer confidence data and the news that Japanese Prime Minister Taro Aso will dissolve parliament.

Trichet: ECB's Toolkit Is Up To The Challenge

European Central Bank President Jean−Claude Trichet Monday rebuffed criticism that the bank has done too little and too slowly to combat the global economic crisis, saying that its monetary policy toolkit is "up to the challenge."

Japan Govt: Consumer Sentiment Index 37.6 Jun Vs 35.7 May

apan's consumer sentiment index in June reached its highest level in more than one and a half years, the government said Monday, adding to hopes that the worst of the economic slowdown may be over.

Bobbys Corner-Open Market-July.10.2009

The USD and JPY rose as speculation mounts that the global recovery is faltering.The JPY has been the main benefactor-as investors seek refuge from the weakened world economies.
World equity markets were lower, and US futures are also lower as speculation continues that the global recovery will be slower than originally predicted.
Oil:$59.58 Gold:$908.40
Today’s Data:Trade Balance: exp: -$30.0B prior: -$29.2BImport Prices: exp: 2.0% prior: -17.6%U Of Mich: exp: 70.0 prior: 70.8
HAVE A GREAT DAY-GREAT WEEKEND-GOOD LUCK

SNB verbal intervention sends the Swiss Franc lower

SNBs Roth was on the wires last night and reiterated the central banks policy of “sticking decidedly to its policy on the franc” and that he does not want “any further appreciation of the Swiss Franc”. The verbal intervention, led to a steady rise in the USDCHF and the EURCHF.

SNBs Roth was on the wires last night and reiterated the central banks policy of “sticking decidedly to its policy on the franc” and that he does not want “any further appreciation of the Swiss Franc”. The verbal intervention, led to a steady rise in the USDCHF and the EURCHF.

NY has come in and moved the price lower. The current price has just tested the 61.8% retracement of the days range (1.5135 is the level). I would expect to find support at these levels as the threat of actual intervention becomes more and more likely. A stop below…

US Trade Balance comes in at higher than expectations

The expectation was for a -30B. The actual number came in at -26.0B. Lowest since 1999. Imports since July 2004.
Exports rose by 1.6% while imports fell by -0.6%.
The Real or inflation adjusted Trade Balance also improved to -36.182B from -40.063 B in April. The real Trade Balance is what is used to calculate GDP. A smaller deficit is a net gain for GDP.
Meanwhile Canada Trade Balance had a worse than expected Trade deficit of -1.4B. This is the largest deficit on record. Imports fell by 3.5%. Exports fell by -6.9%.

More on EURCHF chart analysis

On the intraday 5 minute chart, the pair has moved between the 200 bar at 1.5134 and the 100 bar MA at the 1.5147 level. Since the break lower in NY these extremes have held the price action. A break above or below may give some short term clues to the intraday direction.
I still would be concerned about the threat to intervention however to support the currency pair.

GBPUSD being pressured with support tested again

The price has moved below the 1.6187 level and the 100 hour MA at the 1.6182 level. The low for the day is 1.6172. A move below all levels should give the bears the upper hand again. On alert.

Univ of Michigan came out worse than expected

The Consumer Sentiment came in at 64.6 vs an estimate of 70 and lower than 70.8 last month. The Economic Condition index came in at 70.4 vs 73.2 last month and the Economic Outlook fell to 60.9 from 69.2 last month. Inflation expectations 1 year forward came in at 3.0% vs 3.1% last month.
Overall, the report is weak and suggest the consumer is starting to feel more pressure as employment continues to be an issue and balance sheet rebuilding will take longer than expectations.
The dollar has gotten stronger after the report on flight to quality flows. The USDJPY has declined as has the Yen crosses as short term traders exit the riskier trades.

Summary of Trading the News

That’s pretty much it….is it really that easy??? Heck no!! Well, maybe not at first. You’ll have to practice and trade many different reports before you get a feel of which news reports will make the market move, how much of a surprise is needed for the market to move, and which reports to avoid. Like in any other trading method, your success depends on your preparation and confidence in your systems and methods. This will take time and practice. Do a little homework and study the economic indicators on why they are important. Nothing worth having comes easy, so stick with it and you’ll find that trading news reports will be very rewarding once you get the hang of it.

"Trading the Numbers"

This seems to be a more preferred method by many, in that you determine whether or not the news report is worth trading at all – a lot less risky than straddles.

First, you must determine the significance of the news report being released. Not every news report release is tradeable; either it wouldn’t cause a stir in the market, or that the initial volatility would be so crazy that it would be too dangerous to enter a trade.

Ask yourself what kind of environment the market has been in recently. In other words, what has been affecting the market lately?

For example, maybe the Federal Reserve has been concerned with inflation. In this scenario, any inflation-related data (consumer price index, hints on future monetary policy) would be closely watched by the Fed – and what the Fed is watching, traders are watching. Any news reports of this level may be great opportunities to trade, as long as you are conscious of the risks.

Straddles

Straddles are really easy to set up and require very little thinking, but it is probably the riskiest method of trading the news. To set up a straddle, you basically put a limit order to go long a few pips above the market before a news report, and simultaneously put in a limit order to go short a few pips below the market. If the report creates enough volatility your orders will be automatically triggered, and your stops and profit levels will also be automatically executed if hit. Simple as that.

Again, it sounds easy, but be very cautious with this method in that both long and short orders can be triggered, and if profit targets and stops are set incorrectly, you can be stopped out for maximum loss on both orders. Also, you run the inherent risks of slippage.

Spreads

Some brokers may guarantee execution but do not guarantee spreads, and during news events you’ll see spreads widen dramatically (I’ve seen a 3-pip spread turn into a 14-pip spread during a report). If you like to take small profits like 5 to 10 pips, this will hurt your chances of profitability and possibly keep you in a potentially losing trade.

Volatility/ Whipsaws

During major news reports and economic releases the market can swing 20 to 50 pips in a second! News volatility can be very dangerous, even for experienced traders. You may catch the strong initial move, but like so many times in these situations, it can turn against you into a losing trade just as fast.

Order Freeze

Some brokers prevent limit and market orders right before a major news release (some up to 30 minutes to an hour beforehand). This usually occurs with brokers who guarantee fixed spreads.The reason your trading platform “locks up” is not because the platform “crashed”, it’s because the spread is too wide and if the brokers offered them with their fixed spreads, they would lose money.

Trade Forex at Your Own Risk

Before I pursue anything, I like to know exactly what I’m getting into. The same especially goes for trading. We’ve heard the benefits and why we should “trade the news,” but more importantly we should know the risks.

Slippage

Market volatility can increase geometrically during news releases, which means the price can move as little as 5 pips to 20 pips (or even 50 pips and more during major news releases) in the matter of seconds. If you try to get your order filled during this type of volatility, you will probably get filled at a much different price than you anticipated. This is especially risky with limit entry orders.

For example, I once placed an order with a broker (one that guaranteed fixed spreads, but not execution) 15 minutes before a major news release on EUR/USD. Right before the release, the market was at 1.2320. I set my limit order to go long at 1.2360, with a profit level of 1.2383. The news came out bad for the U.S. dollar, which caused the market to shoot up 80 pips as soon as it was released. My long order was triggered, but unfortunately, I got filled in at 1.2390 – 30 pips above my limit price!! After the market settled for a bit, my profit target price was executed at a loss because it was set below the price at which I got filled in. Fortunately, it was only a 7 pips loss, but it was a costly lesson learned.

Things to Know When Trading News Reports

Now that we know “how” and “when” you can trade news reports, there are a few key concepts you should know before placing your first news trade.

• While the actual news number or report is essential to the long-term movement of a currency pair, in the short-term the difference between the market expectations and the actual release is what causes potential breakout opportunities. This means economic numbers and reports that come out as the market expected generally do not cause a strong market reaction.
• The quieter the market is before a news release, the more the market is poised for a significant move. Think about it: In a quiet market, less and less traders are buying and selling, possibly waiting for some sort of catalyst (like a news report maybe?). When this “catalyst” takes place, all of these traders waiting on the sidelines jump in at the same time causing a huge move in the market. So, the more traders wait (the quieter the market), the more will jump in after a news report (huge pips and a new Ferrari, right?).
• Depending on the significance of the economic report, and the amount of deviation of the actual to the forecasted number, news breakout opportunities are generally short-lived and may last for only a few minutes or even a few seconds. Trading news releases may be better suited for scalpers and day traders.

Tradeable Reports

With all of these countries to choose from, there are easily five to ten economic news releases almost every day! Also, the great thing about focusing on news releases is that they are scheduled in advance, so you know exactly when you can schedule your trading hours.

You may be thinking that five to ten news releases per day may be a lot to keep up with, but you really do not have to pay attention to every single report – you can pick and choose. There are a few key reports, most of which come out every month, that produce a significant amount of pip movement.

For this lesson, we will focus on U.S. news and economic reports, mostly because the U.S. dollar is involved in a majority of currency trades, and therefore tends to have the most significant impact on the currency markets. Here is a list of some of the top U.S. market moving reports:

• Employment Growth
• Interest Rate decisions
• Trade Balance
• Gross Domestic Product
• Retail Sales
• Durable Goods
• Inflation reports (Consumer Price Index and Producer Price Index)
• Foreign Purchases report (TIC Data)

Every country has a set of major reports similar to this list and can be as potentially volatile. Again, since these reports are scheduled in advance there are plenty of websites on the Internet with schedules and potential volatility rankings.

Tradeable Reports

With all of these countries to choose from, there are easily five to ten economic news releases almost every day! Also, the great thing about focusing on news releases is that they are scheduled in advance, so you know exactly when you can schedule your trading hours.

You may be thinking that five to ten news releases per day may be a lot to keep up with, but you really do not have to pay attention to every single report – you can pick and choose. There are a few key reports, most of which come out every month, that produce a significant amount of pip movement.

For this lesson, we will focus on U.S. news and economic reports, mostly because the U.S. dollar is involved in a majority of currency trades, and therefore tends to have the most significant impact on the currency markets. Here is a list of some of the top U.S. market moving reports:

• Employment Growth
• Interest Rate decisions
• Trade Balance
• Gross Domestic Product
• Retail Sales
• Durable Goods
• Inflation reports (Consumer Price Index and Producer Price Index)
• Foreign Purchases report (TIC Data)

Every country has a set of major reports similar to this list and can be as potentially volatile. Again, since these reports are scheduled in advance there are plenty of websites on the Internet with schedules and potential volatility rankings.

When are News Releases uh Released?

The list below displays the times when the most important economic data are released for each of the countries. Make sure you know them or go broke.

Symbol	Country	Time (GMT)
USD	United States	13:30 - 15:00
EUR	Germany	07:00 - 11:00
EUR	France	07:45 - 09:00
EUR	Italy	08:45 - 10:00
JPY	Japan	23:50 - 04:30
GBP	Great Britain	07:00 - 09:30
CHF	Switzerland	06:45 - 10:30
CAD	Canada	12:00 - 13:30
AUD	Australia	22:30 - 00:30
NZD	New Zealand	21:45 - 02:00

Which Pairs Should I Trade?

Here is a list of the top currencies and countries in which you should focus on for news trading:

Symbol	Country	Currency	Nickname
USD	United States	Dollar	Buck
EUR	European Union	Euro	Fiber
JPY	Japan	Yen	Yen
GBP	Great Britain	Pound	Cable
CHF	Switzerland	Franc	Swissy
CAD	Canada	Dollar	Loonie
AUD	Australia	Dollar	Aussie
NZD	New Zealand	Dollar	Kiwi

Now, there are plenty more currencies available to trade, but this list is based on the size of each country’s economy, frequency of news releases and the trading liquidity of their currency.

Why Trade the News?

Trading news releases can be a significant tool in your trading arsenal. If you want, it can be your only weapon altogether. Economic news reports often spur strong short-term moves in the market, which are great trading opportunities for breakout traders. And with the forex being open 24 hours a day and a true worldwide market, there are plenty of opportunities almost every trading day to catch market volatility (aka a lot of pips!) kicked off by an economic news report.

Trading the News

Trading the news is becoming a popular technique to trade the forex markets … and why shouldn’t it be? Time and time again you see currency pairs move 50 to 100 pips within minutes or even seconds after a major news release. When you see that, I bet you’re thinking, “50 to 100 pips!? That’s easy money!” Maybe it is, and maybe it isn’t. It all depends on how prepared you are to trade a news release.

The goal of this lesson isn’t to give you a specific “Trading the News” strategy. The goal is to point you in the right direction and show some of the risks involved with trading these events, because here at BabyPips.com, we want to help you help yourself in developing your own methods that fit YOU best .

Yen Climbs on World Economic Recovery Delay

The yen, the most attractive currency in times of uncertainty, started this week climbing against the dollar and the euro, as pessimistic reports last week led to speculations that the economic recovery will falter, raising risk aversion levels among traders.

Mexican Peso Down After Elections

The South African rand, which was the best performing currency in the first quarter among the 16 most traded currencies, thanks to a wave of risk appetite, fell for the third day in a row, as pessimism increases risk aversion, damping demand for high-yielding emergent markets currencies.

Euro Falls After Luxembourg Minister Statement

The euro, which until last week was rallying against currencies like the greenback and the yen, started this week losing versus virtually all majors, after speculations that European Union officials will reaffirm that the recession is far from being over.

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Pound Continues Drop as Demand for BoE Measures Rise

The Canadian currency, one of the most linked to stocks and commodities prices, had a weak performance today as stocks in Toronto and the crude oil fell, as concerns that the global slump will be prolonged are on the rise.

Yen Leads Weekly Gains on Safety Demand

The yen is this week’s best bet among traders, as speculations that a weak U.S. corporate earnings to be posted this week made Japanese investors to sell overseas assets and repatriate their capital to the Asian

Australian Dollar Hits Two-Week Low on Jobs Data Speculations

The Australian dollar, one of the main high-yielding currencies among the 16 most traded, has been witnessed a sharp decline since last week’s new wave of pessimism struck equities and commodities markets.

Ruble Drops as Crude Oil Rates Continue Decline

Russia, the world’s leading energy supplier and main oil exporter to Europe, has witnessed a considerable drop in its currency as the crude oil price is reaching almost a week of declines, as concerns regarding the global slump may slash global energy demand for the next months.