SINGAPORE, SINGAPORE -- (Marketwire) -- 03/31/13 -- Going into April 2013, nobody expects that US Federal Reserve Chairman Bernanke will release any new script in the near term, and the Cypriot turmoil and the European saga go on. But the Aussie has continued a resilient rebound since its recent domestic environment and China reflect a better outlook.
During March, Mario Sant Singh, Director of Trading & Education at FXPRIMUS whose views are widely sought after in the Forex industry, looked at safe haven assets Gold and Silver, the downward directions of the GBP and JPY, and the need to follow a trading plan amongst other topics, in his AskMarioSingh.com blog, "Your toughest Forex Questions answered daily".
The precious metals Gold and Silver, have recently been viewed as safe haven assets for investors who wish to balance their portfolio against risk assets.
"With the global economy struggling to move beyond first gear (if not reverse)," said Mario, "Precious metals should be trading at prices way above their current price.
"But not only have prices for precious metals been consolidating for the most part of 2012, they are lately under intense selling pressure as well," said Mario. "I do not have a definitive answer to explain the price drop, but talk about the precious metals market being manipulated by certain big banks, and even by the Commodity Futures Trading Commission (CFTC) itself, is rife in the blogosphere," he said.
On the JPY, Mario said that Japanese Prime Minister Shinzo Abe will press his easing monetary policies with his sights set on a 2% inflation target. Moreover, Abe nominated the president of Asian Development Bank Haruhiko Kuroda to lead the Bank of Japan, and Kuroda, just like Abe, is a widely known advocate of aggressive monetary easing. "In the longer-term perspective, I believe this will further weaken the JPY," said Mario.
On the GBP, Mario said that Moody's downgrade of the UK's rating to AA1 is the tip of the iceberg of the UK's economic woes. The UK conducts its own version of quantitative easing in a bid to improve her economy, but is seeing disappointing results. "The GBP is under intense pressure since the credit downgrade and I expect the slide on the Pound to continue, increasing the inflation rate as a result," said Mario.
"On a side note," said Mario, "The JPY is considered a safe haven currency. Thus, in times of great uncertainty in the market, it can strengthen substantially. The GBP is considered a risk currency, so in times of great uncertainty, it can fall dramatically. In the current depressing financial and economic markets, the Pound may have more fall compared to the Yen in terms of "bearishness"," he added.
When asked whether following a trading plan can work if the strategy might have a negative expectancy. Mario said that the importance of having a trading plan cannot be over-emphasized. "Poor strategy execution can cause losses, more often than not, because traders either don't have a plan or didn't follow it," said Mario. "Of course, a trader needs to use a profitable trading strategy, but until they can attain enough discipline to follow their plan - to avoid emotional trading, they will lose even if they use a profitable strategy."
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