forex updates

Friday, December 18, 2009
World News and Currency Update
EUROPEThe euro traded near a two-month low against since yesterday the dollar on concern the economic slump in Eastern Europe will deepen the recession in the 16-nation currency bloc.The currency may weaken for a second day against the yen on speculation the European Central Bank will signal it plans to cut interest rates again this year, after leaving them unchanged at a meeting today. The Czech koruna approached a two-year low versus the dollar before a government report that may show the trade deficit widened to the most in four years. Russia’s ruble was near an 11-year low after Fitch cut the nation’s debt rating.ASIAIndonesia’s central bank is seeking to expand its $6 billion currency swap deal with Japan and add new agreements to bolster the rupiah after foreign-exchange reserves slumped by $10 billion since July.Indonesia, which has similar agreements with China and South Korea for $3 billion each, may also initiate talks with a fourth nation, central bank Governor said, without identifying the country. The rupiah, which fell 16 percent last year, the most in eight years, declined 1 percent to 11,788 against the dollar at 10:19 a.m. in Jakarta.USYears of deepening recession in the developed world gnawed at investors on Thursday, after glum earnings from U.S. corporate stalwarts such as Kraft Foods and as the Bank of England looked set to cut record low rates further.As governments worldwide seek measures to ease the pain from the worst financial crisis in decades, the U.S. Senate voted to soften a "Buy American" clause in a $900 billion stimulus plan after President Barack Obama voiced concerns it could spark a trade war.
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Spread and Liquidity offered by Forex Brokers
Almost all brokers provide a thin spread for the major liquid pairs. Brokers can be seen to offer a spread of 2 to 3 pips for pairs such as the USD/JPY, EUR/USD, and the GBP/USD USD/CHF respectively. These are some of the most liquid pairs a trader generally focuses on.Also, most forex brokers do not make a commission on every trade a trader makes. Their profit is based on the bid/ask spread calculated in pips. Like previously mentioned day traders try most to catch the small price fluctuations throughout the day. Profit goals here are smaller compared to a swing trader. For a day trader each pip counts.Traders usually don't rather can’t afford to, trade with larger spreads because that can lead to the consumption of profit to such an extent where the required risk/reward wont be available. Most forex trading takes place with the more liquid pairs.
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