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By Central Bank News
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Source: ForexYard

The 17-nation currency continues its downward spiral as the U.S Dollar made further gains versus the Euro and other Major counterparts.

Turmoil in the Spanish Bond’s Market was heavily responsible for adding extra pressure on the euro as it traded down to a three -week low. The euro dropped to the $1,3063 level from $1,3139, the rate it reached during Wednesday’s trading.

The latest rise in Spanish and Italian bond yields has put heavy pressure on the single currency,after the euro had rallied on and off since the start of the year after the European Central Bank proposed huge long-term re-financing which eased concern of the debt crisis.

Yields on Spain’s 10-year government bonds was at the highest rate since December after appreciating to 5.78 percent. whilst Italy’s 10-year yields climbed as high as 5.54 percent, reaching its highest point since February.

Elsewhere the Greenback made further gains during Thursday’s trading as a result of the U.S Initial Jobless Claims showed a dip to 357,000, positive news for dollar. The Non-farm Payrolls report to be published tomorrow could stir up the currency and commodity markets if the report will show surprising results.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By CountingPips

The Euro-Swiss Franc pair this morning broke through the Swiss National Bank’s currency floor of 1.20 for the first time since September 2011, touching a low of 1.1996 before bouncing higher.

The Swiss National Bank (SNB) has vowed to defend their floor and keep the pair above 1.20 to offset too much strength in the “overvalued” franc (too much strength hurts Swiss exports). The market views the franc as a safe haven currency and money pours into this currency when a crisis arises such as the eurozone debt crisis.

Traders will be watching if the SNB will take decisive action to kill the franc’s strength against the euro through more intervention in upcoming sessions.

The EUR/CHF falling below 1.20 in today’s forex market action.

By TraderVox.com

Tradervox (Dublin) – The pound has gained most against most majors prior to a Bank of England’s meeting tomorrow registering the strongest advance against the euro in two months. This bullish trend has been sparked by two reports from UK one showing that the UK services sector unexpectedly grew last month and the other showing that house prices went up in the same month. The Bank of England meets tomorrow to review its monetary policy.

According to Neil Jones of Mizuho Corporate Bank Ltd in London, the pound is performing well due to the positive reports in the services sector and the house-price data. Tomorrow’s BOE meeting also some effect on the pound trend as traders are keeping a close eye to see what the BOE members think about the UK economy.

The sterling pound has strengthened against most of its majors but it decreased against the US dollar as Fed minutes indicated that the economy is on the right track by dismissing speculation about a third quantitative easing program. The report showing UK services activity registered a growth from 53.8 in February to 55.3 in March. The other report on house price data indicated that the house prices increased by 2.2 percent in March.

The sterling pound increased by 0.5 percent against the euro to exchange at 82.73 pence per euro during the European session, this is the strongest it has been since January 16. However, effect of the two reports were not enough to shake the dollar gain against major currency where it gained 0.3 percent against the pound to trade at $1.5874 per pound.

Most analysts have also associated the pound advance against the euro with the ECB President’s comment on the nature of the euro region’s economy. Draghi had indicated in his Frankfurt address that the euro region economy remained susceptible to a downside risk despite the strong efforts made to bring the economy back to normal. The reduced interest in Spain’s bonds in an auction is also another factor that has led to the decrease of the euro against the pound.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Article by Investment U

It’s true; penny stocks are highly volatile, hard to analyze and very risky. But this is exactly why investors who can stomach risk should be interested…

As a smart investor you might ask yourself: Why would I invest in high-risk stocks that trade for a few dollars, a dollar, or even less… for pennies?

It’s true; these stocks are highly volatile, hard to analyze and very risky.

But this is exactly why investors who can stomach risk should be interested, because with more risk you also have the potential for more reward.

At Investment U we call it “reward opportunity risk.” Simply, you have the opportunity to be rewarded with extreme gains when you take on extreme risks.

Capturing Major Gains

If you look at the top 10 performing stocks on U.S. exchanges for 2012 to date, you’ll see that seven of these stocks are small caps with market caps of $1 billion or less, and three of them trade for less than $5… talk about cheap.

Top Ten Performing Stock of 2012 YTD:

But in order to capture gains like the ones listed above, you’ll need a methodology.

Distinguishing a Contender From a Pretender

A metric to consider when looking at small cap stocks is insider buying. More importantly, cluster buying.

Cluster buying happens when more than three “C-Level” (CEO, CFO, CIO, etc.) and directors buy up substantial amounts of shares in a relatively close period of time.

And these have to be substantially large.

If a CEO buys 100,000 shares of a stock trading at $0.20 (a $20,000 investment) this is not what we’re talking about.

We want it to be large and hopefully more than their compensation.

If you find multiple C-Levels buying $300,000 or more worth of shares in the underlining stock, then you’ve found the cluster buying we’re talking about. A helpful tool to track insider buying and selling is insiderinsights.com; they have a daily headline list of all insider transactions.

Investors should also focus on research and development (R&D) for companies that are on the forefront of innovation. We want these small technological innovators to be reinvesting a healthy potion of their revenue back into the company, specifically in R&D.

The current sticker price for a patent is about $1 million, and takes around three to four years to complete. Many small companies’ lifelines depend on patents that will protect the products they create from the big dogs above them. (And these patents are what make small competitors prime takeover targets, which any shareholder will welcome.)

If a company believes it’s legitimate, it’ll take every opportunity possible to reinvest in the company to build and develop their intellectual property portfolio.

Investors should look for small caps that are reinvesting at least 10% to 20% of revenue into R&D and have 50% to 60% of their employees working in R&D. (You can dive into a company’s 10-Ks and 10-Qs to find this type of information.)

What to Avoid

First, avoid any stock trading under $1 dollar that doesn’t have sales and isn’t listed on a major exchange.

Over-the-counter stocks, or what some call pink sheets, can put you into a liquidity trap where you can’t get in or out of a stock due to extremely low trading volume. Stick to the major exchanges and make sure there’s adequate volume on the stock.

And beware, there are a lot of promoters out there who get paid to recommend extremely risky penny stocks, and you don’t want to get caught up in the hype. Stay away from these stocks, they aren’t worth your time.

Second, if there’s little or no data about a stock listed on yahoofinance.com or googlefinance.com stop right there, go no further and avoid this stock.

Be Disciplined

As I’ve already mentioned, small caps hold a large amount of risk so you have to be disciplined.

Make sure that you follow some sort of stop loss policy. At Investment U our general guideline is a 25% stop policy (you can read more about stop loss orders here) but since small caps are much more volatile, investors could consider anywhere from a 35% to 50% stop loss policy.

Simply put, if you buy a stock and it drops 35% you would cut your losses short and sell it immediately.

It’s entirely up to you how much flexibility you want in your stop loss, just make sure you have one and stick to it.

You should also consider your position sizing.

Since small caps are riskier, investors should invest no more than 1% of their portfolio into a single position. If the trade works out, great! You made 20 times your investment. But if it doesn’t, it’s no big deal since you didn’t dump a ton of money into it.

Investors with a stomach for risk should consider adding a few small cap stocks to their portfolio. Soon enough you might find yourself holding a stock that has tripled or quadrupled in value in a short period of time.

Just make sure to do your due diligence using some of the guidelines above, limit your position size and always, always, always be disciplined.

Good Investing,

Ryan Fitzwater

Article by Investment U

By TraderVox.com

Tradervox (Dublin) – Investors have expressed fears in recent Spain bonds auction as they took less than expected. Investors bought 2.59 billion Euros worth of bonds against an expectation of 3.5 billion. This was 2.41 times the amount allotted which is lower than the previous sale in March which attracted 4.96 times. Spain’s prime minister, Mariano Rajoy accepted that Spain’s is at extreme difficult but indicated that the budget cuts that have been made are less painful than bailout.

The low demand of Spain’s debt led the euro to decrease to its lowest in a month versus the dollar. This also raised concerns in the market that the debt crisis in the region is still pushing away investors. The decrease in the euro also came after the European central bank settled to retain the low interest rates and also after the announcement by Mario Draghi, The ECB President that the ECB would make another round of stimulus if the need be. The ECB boss also indicated that the economic outlook of the region is still haunted with a downside risk. This led to a weakening of the euro against its major currencies.

According to some analysts, the EURUSD pair may test the $1.30 level in the coming few days as governments in the euro region struggle to tighten their budgets. If support is not found at $1.30 the pair is likely to move further down.

According to Mario Draghi, the ECB boss, the tensions in the euro area sovereign-debt markets are likely to dampen economic growth, which has been supported by the low up take of the Spain bond in the just concluded auction.

The euro decreased against the dollar by 0.7 percent to settle at $1.3142 after it had dropped to $1.3107 earlier in the day, which is the least it has been since March 16. Against the yen, the euro fell by 1.1 percent to trade at 108.37 yen where it had earlier dropped to 107.91, the weakest since March 13. However, the yen advanced against the dollar by 0.4 percent to trade at 82.46 percent.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Article by Investment U

Nothing is too big to fail. It was true for the Titanic and it's true for the United States. With that said, could the U.S. be heading towards an iceberg?

While browsing the BBC’s news site on Tuesday, I stumbled on a piece about the Titanic.

Since I’ve seen the movie – and therefore know everything about the big ship (including the fate of Rose DeWitt Bukater’s blue diamond necklace) – I’m not quite sure why I opened the story at all. But I did regardless, with two embedded quotes immediately jumping out at me:

“There is no danger that Titanic will sink. The boat is unsinkable and nothing but inconvenience will be suffered by the passengers.” – Phillip Franklin, White Star Line Vice-President, 1912

“The bottom line is no ship is unsinkable. No matter how safe a ship is, if you drive it full speed into a rock, it is likely to sink.” – Tony Selman, Vice Chairman of the Radio Officers’ Association, 2012

A full century after the fact, most people know that the Titanic did in fact sink. That’s the beauty of hindsight: We get to shake our heads and scoff at other people’s foolish mistakes, easily accepting that there’s room for human error in anything human-made.

At least when it comes to boats. Concerning entire economies, however – especially ones we’ve put our faith in – too many U.S. politicians and citizens alike seem to think it’s a completely different story. We buy into the “too big to fail mentality,” the same exact kind that got the White Star Line into so much trouble back in 1912.

So in essence, we haven’t really learned the main lesson from the Titanic’s epic failure at all.

The Titanic Was “Too Big to Fail,” Too

When the Titanic crashed into an iceberg and sank, the twentieth century learned the hard way that nothing is indestructible. But as history repeatedly shows, it didn’t take too long for the world to forget that.

Much more recently, before the 2008 financial crisis, there were a number of stocks listed on American exchanges that analysts deemed “too big to fail.” These companies were giants of their industries, with global presences (or at least connections) and supposedly stable business strategies.

But then the housing bubble burst, leading to a national financial meltdown, which led to a global financial meltdown that’s still playing out in some parts of the world. Just like that, many of those “too big to fail” companies were abjectly failing, largely because they’d been taking on risks they could only cover in bull markets.

But rather than relearning the harsh but necessary lesson, the United States just tweaked the meaning of the term…

Usually applied to banks, it became a political term of assurance. Heavy doses of government monetary intervention was suddenly propping up businesses to ensure their survival; investors might lose 90% of their shares’ value, but not 100%.

Then again, even that modified idea of “too big to fail” didn’t hold true across the board.

While the U.S. government lent taxpayer arms and legs to every other major bank out there, including some foreign entities, it sat back and watched as Lehman Brothers – a financial giant in its time – crashed and fully burned.

America the Sinking

The Titanic – and the much more recent Concordia – proved that there’s no such thing as “too big to fail” when it comes to ships. And the same proved true of businesses in 2008.

So why do we now believe the rule of thumb might not apply to entire countries like the United States?

Admittedly, America is a huge country built off of great principles that give it great potential. It’s the economic Titanic of its day: The one that everybody wants to get on board in some way, shape or form; the nation that, for years, people considered too big to fail.

But it’s that very attitude that’s causing America’s downfall.

According to the government’s website, TreasuryDirect, as of September 30, 2000, the “debt outstanding” (i.e. deficit) stood at $5,674,178,209,886.86. By the same time eight years later, it had risen to $10,024,724,896,912.49, an appallingly large difference.

And it’s jumped further and faster in the three and a half years since.

In short, the United States’ spending habits were unsustainable at the beginning of the century, and it’s quickly reaching the point of no return. Just because it looks (or looked) impressive on the outside doesn’t mean it’s immune to the risks assaulting less significant economies even now.

Perception isn’t everything. And anytime anybody claims that anything – from ideas to businesses to economies – is too big to fail, remember the Titanic… and then book a different cruise.

Good Investing,

Jeannette Di Louie

Article by Investment U

London Gold Market Report
from Adrian Ash
BullionVault
Thurs 5 April, 08:55 EST

GOLD and SILVER ticked higher from Wednesday evening’s 3-month lows in London on Thursday, going into the long Easter weekend with gold trading 0.7% higher against the US Dollar.

Silver bullion rallied 2.2% from last night’s low, but held one-third below the 3-decade peak near $50 per ounce hit at Easter 2011.

The single Euro currency meantime slid near $1.3050 – dropping 3¢ for the week – after Wednesday’s weak auction of new Spanish debt was followed on Thursday by news of a drop in Germany’s industrial output.

Losing 1.1% in gold bullion terms on Thursday, the Euro also dipped briefly through CHF1.20 – the floor set by the Swiss National Bank last September, and since defended by selling Francs to buy Euros in a bid to maintain Switzerland’s export competitiveness.

Ahead of the 4-day Easter weekend – in which London’s gold trading banks will stay closed until Tuesday – Spanish bond yields jumped again, erasing the dip seen since the European Central Bank began lending Eurozone banks more than €1 trillion in December.

The Dax index of German stocks today slid 0.9%, extending its Easter-week drop to 3.2%.

Bullion analysts and professionals trading gold have “turned bearish for the first time this year,” according to Bloomberg’s latest weekly survey.

“Fifteen of 29 analysts surveyed by Bloomberg expect prices to decline next week and five were neutral,” says the newswire, “the highest proportion since Dec. 30.”

The final week of Dec. 2011 saw gold begin a 17% rally over the following 9 weeks.

“We would not be surprised to see a move down in gold,” says a note from bullion-bank Scotia Mocatta today, “but as concerns about Europe’s debt are resurfacing, the downside may be limited and safe-haven buying may soon return with vigour.”

“Asian interest in precious metals remained severely lacking [this morning],” says Standard Bank’s London team. “Nevertheless, there was enough interest again…to keep prices relatively stable.”

Over in Vietnam today, and “after a few dozen drafts” reports TuoitreNews.vn, “the final decree on the management of gold trading activities, a very important document with a strong influence on the domestic gold market, has been signed by the Prime Minister.”

Hanoi’s new decree brings together Vietnam’s piecemeal controls on gold trading of 2011, banning the use of gold as money, such as making large payments in real estate deals, as well as manufacturing or trading gold without the requisite licenses.

Across in India – the world’s No.1 private gold consumer, where a 3-week long strike by jewelers protesting against a series of tax and duty hikes turned violent on Monday, with protesters clashing with police in Mumbai and disrupting trains in Ghaziabad – commercial banks now have to submit a raft of new monthly and twice-annual reports to the Reserve Bank of India stating the volume and value of their gold imports.

“We all know that gold is a deep-rooted part of our cultural heritage,” says Mehul Choksi, chairman and managing director of Mumbai-based Gitanjali Gems Ltd.

“[Gold] also serves as a highly liquid form of savings and a hedge against inflation, having appreciated much faster than other asset classes.

“Naturally, we cannot expect this demand to suddenly disappear. And, since India produces virtually no gold, demand has to be met entirely through imports – legal or illegal!”

“The four per cent duty might be perceived as an irritant,” counters T R Rustagi, former joint secretary of the Central Board of Excise & Customs, also writing in the Business Standard. “But arguably it cannot be the cause for smuggling.

“Its avoidance may not be lucrative enough for smugglers to take risks,” says Rustagi, contrasting today’s 4% duty with the 15% in place when India repealed its Gold Control Act, liberalizing the legal import of gold bullion  in 1990.

“We are expecting [finance minister] Pranab Mukherjee to offer a feasible solution very soon,” says Bacchraj Bamalwa, chairman of the Gems & Jewellery Federation of India, warning that 1,000 crore Rupees in gold trading – equal to some $200m – is being lost by the industry each day.

Reports from the Bombay Bullion Association said this week that gold imports to India have fallen by one-half so far in 2012 from the start of 2011.

India’s second-largest jewelry business by stock-market capitalization, Gitanjali’s share price has dropped 20% on the BSE since hitting a four-year high in early Feb.

Adrian Ash
BullionVault

Gold price chart, no delay   |   Buy gold online at live prices

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Source: ForexYard

The mighty greenback has been trading up against most of its currency counterparts this week, the Japanese Yen being the only Major to show some fight.

Claims for U.S unemployment dropped last week to reach its lowest level in four years, showing further indication of a strengthening economy.Jobless Claims dropped 6,000 to the figure of 357,000 for the week ended March 31, this happens to be the fewest since April 2008.

70 percent of the economy relies on Consumer spending, and there have been a number of reports and positive figures that have boosted consumer confidence in the U.S. Rising stock prices,improvements to the labor market and easier credit are responsible for boosting consumer confidence in the United States.

The most highly anticipated report on the economic calendar, the Non-Farm Payrolls report will be released on Friday.The forecast  figure for the report is 211,000 whilst the previous outcome was 227,000.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Article by Investment U

Karim's book outlines a practical approach to frontier market investing. Buy stocks and ETF's (like NYSE:VNM and AMEX:IF) low and sell them high. Find opportunities in times of crisis, and values when other investors are fearful.

I’m a voracious reader, but have an odd habit.

Instead of reading a new book from beginning to end, I normally have four or five books going at once. The reason is that I get a bit bored after a few chapters and like to mix things up.

But sometimes a book is so interesting, I go full steam and finish the book one, two, three.

This is the case with Karim Rahemtulla’s new book, Where in the World Should I Invest: An Insider’s Guide to Making Money Around the Globe.

Most investment books are long on figures and short on entertainment. Karim has pulled off a neat trick combining hard facts with an informal, insider-on-the-ground investment tour of emerging and frontier markets around the world. And he does it in a vivid conversational style.

You will become Karim’s buddy as he takes you on a whirlwind insider tour of great cities like Istanbul, Saigon, Shanghai, Moscow, Bombay and Cairo, and then describes great growth opportunities in Singapore, Cambodia, Chile, Mexico, Panama and Argentina. You will not only learn firsthand what drives these markets, but also what the people, sites and culture are like. Even learn where to get the best bargains, the best food and the coolest places to hang your hat while in town.

This is important because when investing in emerging markets, the numbers are obviously important, but so is having a feel for a country’s culture, history, economy and stock market.

This book is also well worth reading for the following three reasons:

• Nicely Balanced – Many so-called emerging market experts are always bullish and avoid the realities of investing in these frontier markets. While offering superior growth prospects, there are always two faces to emerging markets. The reality is that many emerging markets face the challenges of dysfunctional governments, corruption, intractable poverty and volatility. Karim points out all the opportunities, but is frank on each market’s shortcomings.

• Well Organized – Most investment books drown the reader with information without any guidance on how to take action. Karim sums up his discussion of each market with a snappy summing up that highlights strengths, weaknesses, opportunities and threats. I have used a similar strategy I call a “balance sheet” approach looking at a market’s assets and liabilities.

• Smart Strategy – I couldn’t agree more with many of the book’s tips about how to best capture growth while managing risk. First, a trading approach will work far better than buy and hold. Second, because many markets (China and Brazil are exceptions) offer only a few companies listed on U.S. markets, blending company stocks with country-specific exchange-traded funds (ETFs) represents a smart strategy for most investors. Karim highlights the best of both as he roams the globe looking for adventure and profits. Third, by far the best time to make a killing in these markets is when they’re in the midst of a crisis. Next best is when the market is just out of favor, and down and out.

An Example…

A good example of this strategy is Vietnam, or the Market Vectors Vietnam ETF (NYSE: VNM). This market lost almost half its value in 2011, but has snapped back 36% so far in 2012.

Vietnam seems to be Karim’s favorite pick in Southeast Asia because of its young and hard-working population, location at the center of this dynamic region, and its growing destination as a manufacturing center.

While all this rings true, I have a hard time getting beyond its authoritarian government with a bent towards central planning. My favorite in the region for some time has been the budding democracy of Indonesia, or the Aberdeen Indonesia Fund, Inc. (AMEX: IF). The Jakarta stock market has yielded an average annual return over the past decade of just over 25%.

I will recap my case for Indonesia next week when I profile the brand-spanking-new Van Eck Market Vectors Small-Cap Indonesia ETF (NYSE: IDXJ).

Most importantly, while I focus on emerging markets and have visited many of the countries that Karim discusses, I learned quite a bit from this book. It has already joined my emerging market reference library and will be consulted frequently.

I hope this book will encourage you to get out and visit these intriguing investment destinations. Reading this book is the next best thing.

Good Investing,

Carl Delfeld

Article by Investment U