Aussie Falls on RBA Minutes, Pares Losses on Positive Fundamentals

The Australian dollar sank after the minutes of the last central banks monetary policy meeting indicated that policy makers are ready to ease the policy further. Currently, the Aussie is attempting to reverse the losses on positive economic reports.

The Reserve Bank of Australia noted in its minutes that additional stimulus can be provided if it would be necessary:

If demand conditions were to weaken materially, the inflation outlook would provide scope for a further easing in monetary policy.

The RBA wasnt very pessimistic despite the hints about more easing and had a surprisingly positive view on the situation in Europe:

Global economic and financial market developments had been somewhat more positive over the past month or so. Whereas the situation had b

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The IG Index Insight Feature – A Useful Tool Or Not?

If you have an account with IG Index, you may well have noticed that they have just created a new research tool called Insight. This is available to all customers free of charge, and it allows you to research and analyse various different financial markets, including each of the currency pairs, in some detail.

It includes things like live prices, streaming news, an economic calendar and commentary of various markets, as well as custom price charts (all on one screen), and the ability to place orders from this page as well. However one of the more interesting features is that it tells you what positions other IG Index traders are opening right now, and how they are trading.

For example when I log in and open the Insight tool, I can instantly see which UK companies have the most open positions, and which way traders are trading this stock.

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The size of Apple and its cash in relative terms

After last week’s earnings releases, everyone’s eyes were on Apple as it crushed analysts’ estimates with its Q1 earnings. Since Apple’s market value is now beyond the 400 billion USD, let’s look at what the company is worth in relative terms.

• Apple’s total market value is about the same as Norway’s GDP in 2010 (413bn USD)  and is significantly larger than Denmark’s GDP (2010: 310bn USD)
• Being Icelandic I also find it interesting that Apple’s market value is roughly 32x larger than the 2010 GDP of my home country (12.5bn USD).
• For the price of 400bn USD one could also pick one of the following large countries and pay down their total external debt; Russia, Brazil, Turkey, India and more.

In Q1, Apple reported 97.6bn USD cash balance, determined by cash & cash equivalents. Don’t take this Read the full article…

FOREX NEWS – Euro boosted by PMIs; counters Greek setback

Euro zone service sector PMI eases recession fears

Euro rises to near 3week high versus dollar, 4week high versus yen

Negotiations over Greek debt stall but hope for deal still alive

LONDON, Jan 24 The euro hit a near threeweek peak in volatile trade versus the dollar on Tuesday as a survey of the euro zone service sector topped forecasts and eased fears of a recession, though markets were edgy as talks to avert a messy Greek default stalled.

Surveys showed the euro zone may yet escape recession thanks to a surprise upturn in the service sector which offset ongoing contraction in manufacturing this month, briefly pushing the euro to the day’s highs.

“Germany’s recent ZEW survey was better than expected and now its PMI is also better which is lifting the overall PMI survey for the euro zone,” said Jane Foley, senior currency strategist at Rabobank.

“The market has been positioned for a downturn in Germany and maybe it has got too pessimistic on that front for now,” she added.

The common currency rose to its highest in nearly threeweeks versus the dollar of $1.3063 on trading platform EBS, before falling back to $1.3010, down 0.1 percent for the day.

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Dollar Advances, Positive Sentiment Over?

The US dollar gained today as concerns and uncertainty slowly return to the Forex market and demand for the protection by the safe currencies may again emerge. It’s early to say with certainty that the greenback will rally again as the positive mood hasn’t yen gone completely from markets.

The optimism about the future of Europe hasn’t quite waned and still puts a downward pressure on the dollar. The United States showed a positive set of fundamental data and that supported the optimism. The US manufacturing PMI advanced from 50.8 to 52.7 in November. The construction spending rose 0.8 percent in October, compared to the median forecast of 0.4 percent.

The outlook for the global economy and the European economy in particular isn’t universally good. And there are reasons to be worried. The US unemployment claims increased from 396,000

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My Most Popular Posts Of 2011

Every year around this year I produce a list of my most popular posts from the last 12 months, so I thought it was worth carrying on the tradition this year. I didnt think I had had been so active on this blog this year, but I actually wrote a lot more posts than last year.

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Oil rallies as geopolitical tensions remain high

WTI Crude oil, which has rallied strongly since mid December, closed yesterday at the highest level in eight months rallying by 4.2 percent on the first trading day of the year. The strong performance is based on a combination of increased geopolitical risk in Iran, improved economic data from the U.S. and China (the world’s two largest consumers of oil) and a softer dollar. Geopolitical risk however is the main engine that has kept this rally going and with many traders entering the new year with flat positions on their books this has been the catalyst for the buying seen so far. The risk however is that the global economy in its current fragile state will not be able to cope with higher prices at this stage and further price rises, which act as an extra tax on the consumer, raising the fear of a disorderly sell-off once the tensions in the Middle East ease. For Read the full article…