SINGAPORE, SINGAPORE -- (Marketwire) -- 02/28/13 -- Going into March 2013, risk sentiment has taken a break as benchmark indices and risk currencies edged lower last week. Improved German data filed to lift Euro-related assets, Euro Zone aggregate PMI ended its rebound, and in the U.S. Federal Open Market Committee (FOMC) participants worried about high costs and inflation risk from Quantitative Easing, adding uncertainty to the global market.
In his AskMarioSingh.com blog, "Your toughest Forex Questions answered daily" Mario looked at interest rate decisions and Forex, trading before a major news release and identifying fundamental events that cause long-term market trends, the strengthening of the USD and how to trade specific currency pairs, amongst other topics during February.
Said Mario, "Central Bank interest rate increases benefit a country's currency, as they put a cap on inflation. Forex traders may consider going Short if a Central Bank reduces the interest rate, and going Long if a Central Bank increases it."
On trading before a major news release, Mario said that an ongoing trade position before a major news release needs to have a directional bias for a currency through analysis, and a trading plan. "Trading successfully in the long run is about being consistent in execution and having strict money management," he said.
On fundamental events that cause long-term market trends, Mario cited the recent USDJPY rally caused by the weakening JPY due to Prime Minister Shinzo Abe's monetary policies as an example, and said that the key is to marry different market events and economic numbers to form a market bias. "For example," said Mario, "if China's Gross Domestic Product (GDP), trade balance, manufacturing and retail sales show dismal results, it might suggest China's economy is slowing down. This may have a long-term effect on the Australian currency, as China is Australia's biggest export partner."
On the strengthening of the USD when consumer sentiment dropped, Mario cited the EUR and GBP losing value, rather than USD gaining strength. "The U.S. is the largest economy, so when its economic indicators are weak, consequences tend to reverberate around the world," said Mario. "Therefore, investors and institutions could exhibit a "risk off" sentiment and might offload risk currencies, like the EUR, GBP, AUD, CAD and NZD, causing them to fall in value."
On how to trade specific currency pairs, Mario cites relativity: how one currency compares to another. In his new book 17 Proven Currency Trading Strategies: How to Profit in the Forex Market (Wiley Publishing) Mario illustrates how to custom-tailor trading strategies for peoples' different sensibilities and risk tolerances, with illustrations that clearly explain what to look out for and how to apply strategies in a real-time situation.
The views of Mario Sant Singh - who is Director or Training & Education at FXPRIMUS, are widely sought after in the Forex industry. His popular blog, his weekly market webinar, his daily and weekly market reports provide direct channels for some of the best-informed educational resources that new and experienced traders can access to improve their knowledge of Forex and related investment markets.
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