15 December 2009
This may sound all decadent and not very recession-friendly, but Brits who have managed to hang on to their overseas properties in places like Spain and France are apparently sitting on a potential profit-maker.
That's because according to new research, despite the recent volatility in both the home- and abroad property market, those who purchased their property four years ago could gain on the back of the exchange rates.
So, while the pound is weaker against the euro, you could still profit. Foreign exchange specialists are indeed reporting that there is a large increase in Brits choosing to sell their property abroad.
Whichever way you plan to go - buy or sell - it seems that the overseas market is on its way back to business.
11 December 2009
Top rating agency Moody's Investor Services has decided not to strike a prized "a" from the current triple A (Aaa) rating that the UK treasures. It sees no reason to do so because at the moment the country apparently is able to finance its whopping deficit.
A sovereign rating is highly important for any country, and being downgraded only means becoming more unattractive to foreign investors. This week, both Spain and Greece were downgraded by two of the other top rating agencies, Standard & Poor's and Fitch.
The pound was somewhat buoyed by the news, although it had taken a knock after the Pre-Budget report yesterday.
09 December 2009
GDP growth for the third quarter in Japan is now 1.3 per cent - it had been higher at 4.8 per cent. The biggest lagger for the economy is private spending. External demand is still present and exports did not have to be revised downwards.
In reaction to the new data, Japan stocks took a plunge. Clearly, currency and share traders were not expecting such a sharp downturn for quarterly growth.
It may all seem a bit doom and gloom but so far no-one expects the recession to be a "double-dip" or "W" shaped one.
07 December 2009
- Here's how many jobs experts had predicted to be lost for November: 130,000
- Here's the actual number: 11,000
The good news served to provide a boost for the dollar - a currency which has been on an extended weak trend for some time. This morning it had slipped against the Japanese yen but overall currency analysts expect the dollar to remain buoyant.
Added to the dollar's boost is the fact that many are expecting the US base interest rate to rise again sooner than expected. However, as yet this is still merely speculation.
02 December 2009
Record levels of people in the UK are paying off unsecured debts such as loans, credit cards and overdrafts. Meanwhile, financial products like prepaid cards are flying off the shelves like hot cakes - why? Because they offer the plastic route but without the debt risk.
Prepaid cards are becoming ever more popular as people find ways to control the budget yet still spend in places like the internet (ever tried paying for online goods with cash?)
The money you spend with a prepaid cards is money which you have loaded on there - no borrowing at all.
30 November 2009
The United Arab Emirates central bank pledged to keep banks there liquid but the overall situation looks shaky to many on the world stock markets.
Dubai World, the state-owned company, asked for a further 6 months to pay back its $60 billion of debts last week causing a worldwide investor reaction.
Since then Dubai and Abu Dhabi officials have been holding emergency rescue talks to try and salvage the bruised Dubai economy.
27 November 2009
Ever thought about garlic?
Perhaps surprisingly, garlic is being tipped as the newest commodity to invest in. Why? Over three quarters of the world's garlic is produced in China, where the price has risen up to 40-fold since March this year.
The reason has been cited as speculators who bought unripe garlic crops and stored them in anticipation of a price boom. Some believe that the vegetable has become so popular there because the Chinese believe it has healing qualities and could ward off swine flu. Indeed, one school ordered sackloads of it and pupils must eat quantities of it to prevent infection.
So, in case you are looking for new places to invest - why not?
26 November 2009
Middle Eastern investors were keen on a significant level of increase - yet the actual revision ended up to -0.3 per cent. This was precisely what had been predicted by economic experts.
This took the shine off the pound's winning streak and it rallied later in the day.
The US dollar, meanwhile, reached its lowest level for 2009.
24 November 2009
When first introduced this year, the reaction was mixed - some thought it was a worthy method of pushing deflation away and providing a cushion for the economy. Others argued that by forcing deflation away, inflation was a much higher risk and the pressure on the pound would be too great.
So far, the Bank has spent 200 billion pounds on the QE programme. It is due to finish early next year. Around the same time, it is expected that the base interest rate will be increased. Futures investors are expecting the interest rate to be around 4 per cent before long.
23 November 2009
Also added to the continuing climb of gold is the fact that nations like China are increasing their non-dollar reserves. Gold is one of the most popular assets to Asian nations and their demand - along with other emerging nations - is keeping gold on its upward trend.
This morning's price was a new record and many analysts expect the price of an ounce to exceed $1,200 before the year is out.
20 November 2009
- Low investor confidence towards the UK economy
- Even worse-than-expected bad deficit data
- Concerns over the fiscal policies for the economy
- Lack of confidence in the UK government regarding economy
The pound today hit its week low against the US dollar as investors head back towards safer currencies.
Analysts and strategists have warned that the pound faces a continued struggle.
18 November 2009
Some argue that now, the QE programme needs to be halted because of the inflation threat. Others say that halting the scheme could be disastrous for the economy. The central interest rate is also a topic for discussion, as some wonder whether it needs to be raised sooner than planned on the back of the latest inflation figures.
The currency exchange market reacted with investors heading back to the pound - it rose against the euro and the US dollar after the figures were announced.
17 November 2009
- they are available online
- the global financial downturn means mainstream lenders are tougher
Many people are concerned over their personal data when applying for an online payday loan. However, any legitimate payday loan service would not be in business for long if they were careless with the data of their customers! After all, negligence with personal data carries severe consequences for any financial service.
The main thing to bear in mind when applying for a payday loan is not so much your security (as this is usually tight) but whether you can afford to pay it back!
16 November 2009
The UK is still nursing its recovery after six consecutive quarters of contraction. As Europe's second largest economy it was much more exposed to a fall than countries like France and Germany, were a heavy reliance on credit has not been a factor.
Overall, Europe including non Euro countries like Sweden experienced growth of 0.2 per cent.
12 November 2009
As people hit the shops and rely on their credit cards to see them through, there are warnings to keep vigilant against fraud. Protect your PIN, never write it down and certainly never divulge it (not even to family)!
For people who want to stay on the even safer side, there is always the prepaid card option which doesn't have a credit facility or overdraft. If stolen it can be replaced and the provider will have all transactions listed out so anything can be pinpointed.
11 November 2009
The main reason? The vast budget deficit is the principle problem. It is feared by various economists, financial bodies and analysts that the deficit will reach close to 200 billion GBP by the close of this financial year.
Gordon Brown now adds this to the latest of many awkward situations in his term as Prime Minister.
The British Pound took a sharp knock thanks to the rating scare and fell against the US dollar and the euro after what had been a fairly strong day.
10 November 2009
What prospective trader might not know is that each platform has its own features and idiosyncrasies that ought to be mastered before placing real orders.
Here's a good way to go about it: sign up with various online forex dealers and use their free demo account option - this is free software for you to download, you can test that dealer's way of working. Place around 20 orders with them, and with all the others where you have a free demo.
After a few weeks of testing each one out, you'll probably have a fair idea about which is your favoured one. Only then (and after having learned about the forex market as a whole and how it works) should you consider using real money to trade currencies!
06 November 2009
The accused span across the US and include fund managers, lawyers, traders and executives.
So far, around 20 people have been accused and arrested.
It is clear that investors looking for a fund manager would be best advised to tread with extreme caution before signing up with a fund. However, criminal activity is a reality which must always be kept in mind - check and double-check a company before placing your hard-earned capital with a manager.
05 November 2009
The precious metal's performance has been helped by the US dollar's generally weak status of late, plus a boost: the IMF plans to sell off around 400 tonnes of its 3,217-tonne gold reserves.
This move is seen as being a good factor for developing nations and to take pressure off the US dollar as a reserve currency.
India has already jumped on the IMF's offer, with a bid to buy around 200 tonnes, costing around $6.7 billion.
No prizes for guessing who is aiming to buy the remaining 200-odd tonnes.....yes, China is already preparing to make the purchase, still on its crusade to take away the dollar's status.
The nation already has vast gold reserves - it was building these up while the UK's then-Chancellor Brown was busy selling off the country's reserves at a quarter of today's price.
04 November 2009
The situation in Britain doesn't inspire confidence at all - with the Treasury announcing more taxpayer money to be pumped into state-funded banks like Lloyds and RBS.
The amount of money to be injected into the banks actually is more than the amount of money that was used just over a year ago.
The foreign exchange market is awaiting news from the US Federal Reserve bank on its likely decision to keep its base interest rate near zero.
03 November 2009
In the US, there are marked improvements to the manufacturing and construction sectors and general business sentiment is up.
However, the dollar's downward trend is set to continue as the base interest rate remains low and the Fed's aggressive stance on QE stays too.
29 October 2009
Masses of people have been turned down for credit in the UK this year - be it a credit card, mortgage, unsecured loan.......the list goes on. In many cases, it is thanks to an unpaid bill or outstanding debt that we have no paid off and is bringing our credit file down.
But what if you have an excellent financial health? Check your credit file - it could have inaccuracies, is the new advice. A growing number of people are complaining that there are mistakes on their file which include outdated information or a loan stated as unpaid which was in fact paid of years ago.
Make sure you are in control of your financial future by regularly checking your report and correcting any mistakes. Credit reference agencies are becoming more and more powerful in the new age of stricter lending.
27 October 2009
The new rules, to be overseen by the FSA, are being signed up for by seven of the largest UK banks including Barclays, Lloyds, HSBC and RBS.
They will be the first retail banks in the world to sign up for the new policy which was discussed at the last G20 meeting.
The rules are set to demand clearer disclosure of bank policies and the way in which annual reports are drawn up.
The FSA has already warned that if the rules are not tightly adhered to, they will step in if necessary.
It is hoped by commentators and politicians, foreign exchange markets and the financial sector as a whole that the rules will guide banks towards a new bonus payout system within the banking sector.
26 October 2009
Sadly for Britain, now the USA is also set to announce its exit from the recession as third quarter GDP results are due to be published this week - the data is expected to show better-than-expected growth.
The pound has taken quite a beating this year and as the core UK interest rate is likely to remain low for a long time it is likely to be sold like hot cakes.
23 October 2009
The Office for National Statistics (ONS) published their latest data this morning which show a decline in the British economy - for the sixth quarter in a row.
It looks as though this recession is now as bad as that of the 1979 - 1981 period, with output in industrial, services and construction down still down. Unemployment is still rising with the number close to 3 million.
What has this - apparently shock - news done to the Pound sterling?
22 October 2009
Here's the story: high street banks like Lloyds and HSBC have been accused of confusing their customers by giving them cold calls. Some customers complained that they received a call claiming to be from their bank, were asked for personal details and when they questioned the caller, were told where they lived - this proved too worrying for some so they hung up.
However, the calls were genuine - but surely this shouldn't happen? After all, the Banking Code tells us never to divulge personal information or information regarding our bank accounts unless the recipient is trusted. If you do and become the victim of fraud, the bank will hold you viable.
If you are ever in any doubt over your high street bank, foreign exchange bank, investment bank or other - make sure you take control and ask to call them back.
20 October 2009
The price was helped by the continuing weakness of the US dollar, combined with growing oil demand and hopes for an economic recovery there.
On the other hand, there is growing concern that the dollar needs to be strengthened.
Head of the US Federal Reserve Ben Bernanke said that there needed to be action against the so-called “global imbalances” within the currency market.
19 October 2009
Iran has already changed its reserve currency to the Euro from US dollar. Is anyone surprised? Well, no - not when you take into account the massive conflict between Iran and the USA.
China is the loudest voice in the instigation of change - of a new basket of currencies to be used to value oil and given its growing economic strength, many see this change as a case not of "if" but "when"...
16 October 2009
What is surprising is that not more people are seeking professional help to rescue them. Apparently, most people file straight for bankruptcy without considering an alternative...
The IVA (Individual Voluntary Agreement) was introduced in the late '80s by the Government and are provided by commercial insolvency practitioners. This means that while you may be charged a fee for getting an IVA, it is small compared to a regular loan or to the process of bankruptcy and it possible after-effects.
15 October 2009
A barrel of oil reached over $75, which is not far off the $80 which had been predicted earlier this year for Autumn. Are we set to reach the 2007 heights again?
The Euro is enjoying its strength against the dollar - the foreign exchange market expects one Euro to reach $1.50 and beyond soon.
But hold on to your hats - the dollar could revert to strength at a moment's notice!
14 October 2009
A recent trip to London from Europe was filled with shopping trips. The traveller, who is based in Paris, booked the trip last minute and forgot to organise travel money in advance. She used her regular credit card to make purchases at all the main London shopping destinations - Liberty, Topshop, Selfridges...not to mention restaurants and cafes. She thought it wouldn't matter until she saw the credit card statement - the fees and charges added on top of ATM withdrawals and purchases were astronomical!
This traveller learned her lesson. But she argued, well what about last minute trips? Sometimes there just isn't time to go online and order travel money. There is something you can do about this - find yourself a Travel FX Card now and enjoy it without having to worry in advance. A Travel FX Card allows you to spend your money without massive fees added on top, plus any leftover currency on the card can be used next time you go abroad. Handy and efficient!
13 October 2009
But the sooner you try to tackle your debts, the sooner you can enjoy a better credit status, a better financial health and better chances of getting a "yes" when you next apply for credit.
If you are having problems paying off your debts then you can always consider a consolidation loan or IVA.
09 October 2009
It has been indicated that they are to extend the QE programme once again - after having shocked the financial community by extending it in August.
Back then (and since then) it has been hoped that the UK economy would improve sufficiently so that this would no longer be needed. However, the latest data and figures would suggest the opposite is true.
06 August 2009
The announcement should be made...well, right now! No news yet so will keep you posted!
31 July 2009
Provident provide "doorstop loans" aimed at poorer households - the credit criteria is low (those with a poor rating will be considered) and payments are collected by a Provident representative who visits borrower households.
But charities are arguing that the profits and customer rises to such loan lenders matches the rise in umemployment and bad debts in the UK. They say that a family drawn into a homeowner or personal loan from Provident could end up much worse off when faced with the 545 APR rate.
Indeed, the numbers owing money to Provident has grown to the hundreds of millions.
But Provident say that they are a responsible company with responsible criteria. What do you think? Should companies like Provident be targeting poorer households or should there be a largescale review in this type of lending practice?
29 July 2009
Financial spread betting is the area which is really drawing in the customers for companies like IG Group (their spread betting branch is called IG Index) - around 2,000 customers are joining the investment revolution each month alone. The numbers are not set to decrease by anyone's estimation.
Low interest rates, no commission (as spread betting is a form of gambling!) and quick results are all reasons that investors and savers are turning to this exciting trade to make money.
28 July 2009
Today, the main economical and political news item is the SED conference in Washington between key powers USA and China. Co-hosted by Hilary Clinton and Timothy Geithner, it is of course headed by President Obama. The latter opened the talks by stating a need for the two nations to cooperate on a range of issues that affect the globe - includin nuclear weapons, piracy, civil war, North Korea, and of course the financial downturn.
Both nations have agreed not to stop fiscal stimulus as the situation is still "too fragile" to stop.
While there have been some 'wobbly' moments between the two countries - and during the Bush administration this atmosphere was certainly felt - they do rely on one another. Geithner has already pledged to rein in the deficit within the next four years, as this is a key concern for China, which holds huge reserves.
China is a key nation amongst the emerging market economies that are at the forefront of the new investor interest. Analysts are forecasting a good future in the emerging market, especially for long term investment.
23 July 2009
Recently, the pound has suffered as investors have shied away from its high risk - and headed back to the US dollar safe ground. But now, with an undoubted improvement in sentiment coming from the Bank of England, markets are noting an improvement in the sterling's status.
According to the Bank, UK growth slowdowns are all but diminished and inflation is only slightly above target - meaning there is a good chance that the country is on the road to recovery.
15 July 2009
The second quarter earnings were largely thanks to strong revenue growth from and currencies, underwriting fees from capital raisings and fixed income.
The bank apparently recognises the fragility of the market as a whole but has already paid back $10 billion of taxpayer funds - so some might argue that they are right to enjoy the profits.
However, US congress is less than impressed with what they call "bonus culture" and what, they believe, leads to financial risk taking .....which ultimately leads to banking disasters such as this one.
14 July 2009
They had surprised foreign exchange and other financial markets last week by giving a distinctly vague announcement about the future of QE - enough for markets to react with lower confidence levels. Now, they have said that they are set to begin an "exit strategy" on the policy. How they will do that is not yet decided.
The decision to stop the booster policy has left markets slightly uneasy. Surely it is desperately needed?
Unions have already complained that cuts to public spending will see the jobless number rise yet more (from its already dire level).
The Bank also said that the current QE policy would take months to take action....
10 July 2009
Up until the announcement, it was expected without much concern that the MPC would say that they intend to spend more money on the QE up to the full amount of £150 billion. But yesterday, the message was that they would spend the remaining £13 billion of the current programme and then....well, they would see at the next meeting in August.
The City reacted with disappointment and mixed opinions as to what would in fact happen. Some believe that the committee will definitely continue the programme and increase asset purchasing, but others believe that this is really open.
The news caused the British Pound to rise by about 1 per cent against the US Dollar.
09 July 2009
The news has actually caused an increase in the FTSE 100, after having sat in the financial doldrums with two-month lows.
On the currency market, traders are still reporting an overall risk aversion mood among investors.
Overall there is still a down on recent highs over the economic recovery in the UK, and official data has shown that the economy shrank by 2.4 per cent in the first quarter, down on previous data.
This is the worst quarter performance since the late 1950s.
08 July 2009
But we're back! And today our focus is on the general financial mood and the fact that oil is back down - to a six-week low in fact! So what is going on - at the start of the year the mood was euphoric, and OPEC was forecasting highs of up to around $80 a barrel by the year's close. Is this still set to happen?
The answer is, it is hard to tell. On the one hand, investor confidence is down a little thanks to a number of factors, including the USA's poorer-than-expected unemployment figures and the rumours that there will be more fiscal stimulus. Investors are reacting cautiously, closing bets and moving back to the safe havens (the US dollar).
On the other hand, there are some who are saying that the oil price low is merely the correction of a too-early upward move.
Tricky times indeed for forex and futures traders!
03 July 2009
When I realised how much cheaper and easier it was to order travel money online, I made sure that I never forget!! I have even got myself a Travel FX Card because that is the handiest way to pay abroad. It's so easy and works just like a credit card, except that it holds only as much money as you have loaded on there. So no going over limit or being able to borrow! The exchange rate is uneatable and purchase and withdrawal fees put credit card ones to shame.
It is summer, time to sort the holiday! Now, what is first on the checklist....?
Well in this case it is a true story and happened only this week. The price of oil jumped sharply when the trader, said to be one Steve Perkins, placed orders in the early hours of the morning when trade in London is usually thin (because most people are tucked up in bed!)....
He was found out (obviously) and has been suspended. The FSA investigates...
02 July 2009
The markets are taking the hit over the speculation, and both US Futures and European Stocks were down this morning. The markets are remaining cautious now and into the long US weekend for Independence Day.
Foreign Exchange, Shares, Futures....all of these are dealing with the constant rallying and speculation, fears and risks as the world struggles to decide whether it is improving or headed for another dip.
01 July 2009
The bond sale is massively supported by the BRIC nations - Brazil, Russia, India and China - as they have long awaited a chance to redistribute the voting rights within the IMF.
China, especially, seems fed up with the US Dollar's strength and overall power as the global reserve currency. It wants a new reserve and has been calling for Special Drawing Rights to be used as this. SDRs were created in 1969 to support the then foreign exchange system, Bretton Woods. Now they act as an international asset base for the IMF member countries and their value is based upon a basket of main currencies.
The IMF itself has indicated that a change to the reserve currency is possible at some point in the future, and the power shifts from within its member countries is certainly being taken seriously by all. But for now, the US dollar remains at the forefront.
All G20 nations agreed to contribute to the IMF at the last summit (the USA alone bid $100 billion), but the BRIC countries favour bond buying to regular contributions. All four nations have indicated that they would purchase sizeable amounts of bonds.
30 June 2009
But for the hundreds of victims - some whose money was indirectly placed in his hands via banks - the story continues. There are many and various stories, ranging from Hollywood directors to plumbers to large banks. Those who had not much money to start with are now sitting in serious trouble and there is even one suicide linked with the fraud case.
But while the mess is still being sorted, questions are still being raised as to the underlying financial regulation in place both in the US and the rest of the world. How confident do you feel now, when you seek a new investment fund or investment manager? How much of the regulations and policies policing the financial world are being addressed? Not enough, according to some of Madoff's victims and many in the general public.
Will the Madoff case mean more is done quickly to build up a stricter, more tightly regulated market?
19 June 2009
And that is it - you don't have to go for the latest trend in order to see great returns. Perhaps that kind of high-risk trade just isn't for you. Share dealing has been conducted for centuries and today is a huge global market, which anyone can access via the internet.
Just make sure that either you or your investment manager are clued up on the trends and research for the markets. Only that way can you make good, strategic choices. Make sure you diversify your portfolio as well, so that the risk is spread across a range of industry sectors.
17 June 2009
But isn't financial spread betting just another online gambling scam? No, this is not the case. Financial spread betting is a perfectly legitimate form of investment trading and as such is fully regulated by the Financial Services Authority.
Many large investors partake in financial spread betting as a high-energy, high-speed way to make big returns. It's fun, but it's also high risk. Do not forget this is derivatives trading so it is made on margin. That means you can make big wins but massive losses. Losses can go beyond the actual position: you may be required to pay extra funds to cover the loss to the broker.
Try it, give it a whirl but do make yourself aware of the risks.
But while there is nothing to worry about where the strength of Sainsbury's is concerned - after all, they have beaten Tesco in the period up to 13th June and have recorded sales up by over 7 per cent - shares in the supermarket have gone down in this morning's trading. Tesco shares have remained much the same.
Overall, savvy shares traders will know to keep their shares and enjoy the fact that Sainsbury's as grown despite recession and the global downturn.
16 June 2009
You might be someone who wants to invest slowly and across a range of industry sectors - then share dealing might be right for you. Or you may like excitement and speed - then the tougher Spread Betting or CFD trading might be more your style. Test the markets with free demo accounts, which all decent online brokers offer. Try their platforms, compare their services (do they offer support and training? What hours are they available? How much additional software - if any - is required?)
The most important question you need to ask yourself is: how much money can you afford to invest, and risk losing? Once you have covered some of these main topics, you can look towards an exciting and challenging trade experience.
If you haven't heard of BRIC, watch out. This team is growing in strength and are commanding more attention on the world map. After, all combined they cover 25 per cent of the world's land mass and 40 per cent of the world's population. They are the four nations Brazil, Russia, India and China. China is also the world's third largest economy.
They are 'emerging market nations', that is they are non-western nations who want to be taken more seriously by the western giants. Indeed, they have even increased pressure for an alternative global reserve currency to be considered.
This will not be on the agenda after all but caused concern in the US financial market and amongst US politicians. After all, who wants large holders of US dollar assets to switch elsewhere?
15 June 2009
China and Russia had been keen to see another currency considered as the world benchmark but this will no longer be discussed at a summit this week of emerging nations in Russia.
Brazil, India, China and Russia will meet this week in Russia to discuss financial policies and how to prevent further economic disaster by focusing on regulations of financial institutions.
The euro was down today as it has been shown that in Germany growth is at its lowest since records began in 1970. Exports are down as is foreign investment, and as the largest economy in the Eurozone it will certainly come as a blow.
11 June 2009
So far, NIESR's reports have been known for their accurate predictions and data analysis, but can they really be on the right track this time? After all, when the Chancellor released the last Budget report, and talked of a return to growth by the end of the year, many rubbished his claims. Could it be true, months early?
The foreign exchange market is seeing a return to risk appetites - a sign for return to health - and the US dollar is continuing to weaken against high-yield currencies, another good sign.
But perhaps one should stay steady and wait a bit before becoming complacent?
10 June 2009
Oil has had a rollercoaster ride over the past year, hitting soaring highs and low depths in 2008 alone. The drop was down to the global financial downturn as not only confidence but demand lessened.
Now with ever more positive news coming from the world's financial sectors, so the appetite for risk is growing in the Futures market and trade in general.
29 May 2009
Back then, oil was at a rock bottom price of $30 a barrel, down from the soaring $147 in July of the same year.
In Europe, there are signs of the worst of the recession being over. At least, the levels of confidence are returning according to figures released this week. According to the index used, executive and consumer confidence is at a six-month high. Those 16 countries that use the Euro are seeing an increase in manufacture and demand.
Overall then, with gloabl stocks, oil and general confidence being back on the cards, it does look like there may be signs of the worst being over.
However, economists are warning against premature excitement. After all, economies are still contracting, just not at the speed they were before.
28 May 2009
Opec, the main oil cartel made up of 12 member countries, is due to meet in Austria. Since last September, they have cut output levels three times, which reduced the amount of barrels per day in circulation. It had been said that they would call for further cuts in Austria, but this may now not be necessary any longer...
Of course there are those who say things aren't as great as they seem - there are even those who predict a fall in oil prices by the end of the year, sharper than the early 1980s.
Who's right, who's wrong - who knows! But the return to confidence in the oil sector is surely something to think about.
27 May 2009
In the UK, deflation still lingers and looms on the horizon. Easy to forget about, this factor could mean some nervous times. The Office for National Statistics showed that both the CPI and the RPI were down in April, meaning annual inflation is also down.
What's to blame for this? Top of the list are lower fuel and food prices. The data released has caused economists to say that deflation is still a higher risk than a "rapid rise in inflation".
26 May 2009
BaFin released its annual report and its president added to the doom by saying that unless German banks take advantage of the Government's protection plans, they will be plunged into their worst debts ever.
The currency markets showed the euro's fall - the first in seven days - against the US dollar, to $1.3947, down from $1.4017 on Monday. BaFin president Jochen Sanio said the markets would "kill" those banks that do not accept aid from the state.
The report goes against that which shows business confidence in Germany has risen, something which has given rise to an increase in general market confidence. Many are saying that it is too early to celebrate - and the BaFin report clearly supports this.
20 May 2009
Japan's first quarterly results showed a drop in GDP which was much higher than those of the USA and the Eurozone. While the latter two had drops of around 2 percent each, while Japan's drop was over 15 per cent.
The PM of Japan has called for tough action to be taken in order to recover the suffering economy, and companies have already reacted by announcing more job cuts. Areas that drastically need assistance are exports, household spending and company output.
The Japanese yen will possibly take a blow thanks to lowering confidence of investors in the nation - look at foreign exchange market data to track its progress.
19 May 2009
Since September 2008, when the Lehman Brothers experienced their grand disaster - a catalyst for the rapid world financial downturn - investors have been less keen on taking on the high-risk climate of the derivatives market.
It is well known that this market - formed of financial instruments based on loans, commodities, currencies, bonds, stocks, interest rates to name but some areas - carries high risks. Gains can be hugely profitable but it is just as easy to make huge losses.
Since the global financial crisis began to take speed, the derivatives market has been blamed for much of the losses and disasters that occurred in the USA.
18 May 2009
The announcement has shown an increase in shares in the bank - a surprise move, one which may have affected CFDs traders - but certainly shows a possible link between the chairman's exit and the bank's future.
The decision has been welcomed by many who feel that his choice to take over HBOS, a merger which caused billions of losses, was a very poor one. But board members have praised Blank, saying that he was - and still is - a "first class chairman" and that he is in no way solely responsible for the losses of the bank.
The Treasury oversees the 43 per cent share in the bank that is now owned by the UK taxpayer - a move which was made in order to try and salvage the ailing "superbank".
14 May 2009
Banks are sure that the system is completely secure, and are unwilling to believe customers who claim they have been the victim of credit card fraud. According to them, if customers have been victims, it is their own fault: by being careless - or acted "without reasonable care". This is being called into question by customers and feel unfairly blamed for the way they have acted - or not as the case may be.
The UK payments association, Apacs, has confirmed that debit and credit card fraud at UK cash machines has risen by 31 per cent this year. So the question remains - is there indeed a slight hitch in the apparently unbeatable chip and PIN system?
13 May 2009
Overall, it forecast that the stronger economies of Europe will contract by 4% in 2009, and that those of the emerging economies would shrink by 4.9%.
Now, the IMF is calling for Europe to mirror the USA's recent actions and take out stress tests on banks around the region. The IMF believes Europe urgently needs an indicator on the status of the banks and their performances, plus better clarity as to losses.
Doing stress tests in the USA did help to gain confidence for the country as a whole, but would it also provide back up to the IMF's dire forecasts? Or would it show that there may be more to be positive about?
12 May 2009
Over in Britain, the pound has also been strong in recent times, although don't get too used to it... it might drop again when latest unemployment figures are released. There's nothing like a round of rising jobless rates to cause a currency to receive a hard time.
It's not all bad news though - the sunny Easter weather meant that more people hit the shops, and retail figures for April are up.
08 May 2009
Ten of the tested banks will need to boost their cash reserves, but the amount by which they need to do this has been less than expected - the total figure stands at around $75 billion.
The central banks of Europe also had decisions to make - and the outcome was quite different. Many had speculated that the ECB was ready to take on "unconventional" and drastic measures such as the creation of new money, but in fact they seemed to stay on the safe side. Interest rates were cut to an expected 1 per cent. The Bank of England, on the other hand, kept rates at the same level and have plans to introduce yet more money to use in quantitative easing. The news brought a weakening to the Pound against the dollar and the euro, but in fact bank officials are saying that so far, their measures have been going well!
06 May 2009
There are fears that the ECB's tactics may not be enough to boost the Eurozone economy, and that there is too little, too late in the approach of the Bank. The British Pound hit a four-month high against the US dollar yesterday before retreating again. It also gained against the Euro. This kind of trend is being seen as evidence of traders' increased concerns.
Jean-Claude Trichet, the ECB boss, has mentioned "non-conventional" methods and policies to be discussed for adoption. It comes later than UK and US central banks who have already introduced drastic measures to boost economies.
05 May 2009
This has not improved much in the European Commission's latest report, which has revised the outlook for most of Europe. Most of Europe looks set for decline and in fact Britain is now set to lose around 4 to 4.5 per cent this year - an increase on Alistair Darling's Budget prediction of 3.5 per cent. However, it is Germany who are set to see the biggest decline in 2009 - 5.5 per cent. This decline is the worst in Europe.
The European Central Bank are set to meet later this week to decide on the new interest rate - most are speculating that it will be dropped by 25 base points to 1 per cent. Other measures are set to be introduced in an effort to push the EU economy into more action, and this kind of speculation has had its effect on the foreign exchange market. The euro fell against 13 of the 16 most-traded currencies, including the US dollar and the yen. The outlook for the euro remains weak.
01 May 2009
The world’s largest importer of copper is China, and demand of the metal has increased there too since their fiscal stimulus programme has been put into place in March. Imports rose by 10 per cent to 296,843 tonnes.
Overall, it seems as though there is an increase in confidence on the markets as newsfeeds keep their hopeful outlook for the world economy, and China's success in light of fiscal boost also has an effect on world performance.
The FTSE 100 had its best monthly performance in six years this April. It closed at 4,243.71, an increase of over 20 per cent. The FTSE 250 also had a strong performance – it gained over 18 per cent, making it the best month on record.
30 April 2009
Yesterday, the Norway
Some currency traders see the krone as the best of a bad lot, but others are seeing it as a good place to focus, given the country's high current account surplus and an economy forecast that is much less gloomy than other European countries have seen of late.
29 April 2009
Currency markets are reflecting this in that the US dollar and the yen have weakened the second day in a row against the euro and 14 of the 16 most-traded currencies.
The Bank of Korea has also released figures showing that their current account surplus has increased since February. Asian stocks have gained and New Zealand exports are up too.
So perhaps market confidence is on the up after all?
28 April 2009
Corn and soy futures took their biggest one-day decline in the USA, and meat products are likely to take a hit too: pork products have been banned from Mexico to Russia and China, with Indonesia set to followPredictions that travel and hotel shares would be down have come true as shareholders continued to bet that these would take the first hit out of the pig flu, which is taking an increasing amount of victims in Mexico.
Corn and soy futures took their biggest one-day decline in the USA, and meat products are likely to take a hit too: pork products have been banned from Mexico to Russia and China, with Indonesia set to follow.
The Nikkei closed 1.7% on Monday's trading and the Hong Kong Hang Seng was down 1.4%. Over here, the FTSE 100 index was also down 1.4% in today's early trading.
23 April 2009
According to many, the Chancellor's predictions for the UK economy - growth to reach 3.5% by 2011 - were far too positive and some even labelled it as "fantasy".
After the speech came the IMF announcements for the world economy, and their forecast for the UK was markedly different to Mr Darling's. According to them, the economy is in fact going to contract to a total of 4.1% in 2009 alone.
Alistair Darling's speech (and possibly also the IMF's) had an effect on the currency market, and added to weakening of the British pound. At 10:30 am New York time, the pound was trading at $1.4539 and 89.62p to the euro.
22 April 2009
Why? Because they have raised the interest rates on a series of credit card by a huge 31 per cent, to 16.9 per cent.
Consumer watchdogs (and card customers) have reacted with outrage - and who would blame them - but RBS Group are not the only providers who have made changes. Around 28 providers have changed aspects such as the balance transfer and interest free periods on their cards.
RBS Group have said that any customers who have issues should raise them with the bank directly, and that they would deal with them as best they can.
But the question remains: why, after a summit meeting with the Government but one year ago, where banks promised to take a more sensitive approach to customers, are they now making such changes?
To keep up with the competition is the official answer...
21 April 2009
But in an effort to balance the situation, and to protect margins, Tesco has in place hedging - this means currency movements and fluctuations are insured against.
A wise move, and one of many which has seen Tesco do well - pre-tax underlying profits of £3bn were announced today.
While the food and drink side of the business has had its best sales figures, the non-food products are being worked on in order to increase them. For example, the banking area is set to see a new current account in the next two years. This will join other products such as credit cards, loans and savings accounts.
01 April 2009
Levels of security are tight and a £7.5m security plan in place. City workers have been ordered to dress down and avoid wearing suits, to avoid becoming targets from protesters and campaigners, who have been spreading slogans such as "Hang a Banker".
This is US President Barack Obama's first trip to Europe since taking office, and many across the world have pinned hopes on him that he can bring together leaders to reach a new global initiative. But he'll be in for a tough ride as the summit has already been fraught with issues amongst leaders. France has already threatened a walkout if tighter regulations are not agreed on.
So while the leaders meet behind closed doors, is it not the City workers- the admin in currency markets, the overseas mortgage broker, the secretary at the bank -
who bear the brunt? Are they really to blame for what has happened on a global scale?
31 March 2009
Being widely blamed for the sharp downturn include the housing market collapse - Irish house building accounted for around 15 per cent of Irish GDP during the recent housing boom. Now, with the benefit of hindsight, analysts are saying that the level at which houses were being built - at one point the figure was quoted as being 90,000 in a year - was unsustainable. While initially it was the residential sector that was hardest hit, now the commercial property market is also being affected.
Once known as the Celtic Tiger, the Irish Republic is now suffering, some might say more than many Euro currency countries.
But optimism is still ever-present, and many are predicting a good recovery thanks in part to the Irish people who are being conscientious with their personal finances, saving what they can and buckling down in order to fight the recession.
30 March 2009
There seems to have been an increase in news stories hinting at 'green shoots' in the UK economy. Would it therefore be cynical to say that this is purely spin? Anyone can see that the economy is in no way showing signs of recovery yet - can't they? The unemployment figures certainly do not look like they are improving, so perhaps one should think even more carefully about such strings as mortgages and secured loans...
27 March 2009
Today, I want to focus on investment trading - this is a whole new ball game and can be a great way to build up on your capital. It is no news that many people are now considering how best to grow their money and provide security for the future.
Two such ways are well-known in the trading and broking world - Forex trading and CFDs trading. Both of these can give you fantastic returns, yet both also carry risks. Whereas forex trading provides access to the largest liquid market in the world, and allows the investor to move money around foreign currencies, CFDs trading requires a lot of attention from the investor. Here, you can't buy and forget - you must keep an eye on your contract to ensure you don't make a loss. CFDs - or Contracts For Difference - allows the investor to trade shares without actually owning them.
Both of these can be exciting and rewarding, but as mentioned it isn't an easy way to invest - it requires thinking caps and some background knowledge, both of which your broker can assist with but are not responsible for.
26 March 2009
The tax year is in its final weeks, and you have that ISA allowance sitting waiting to be invested। Yes, it seems a daunting prospect if you're not a regular investor - what about the economic crisis, will I see any returns?
There are so many options, and they include UK equity income funds which have some attractive rates at the moment, then there's the corporate bond: you can't invest in a company that is rated less than "A" so it's unlikely they will crash on you - and if you are that apprehensive, you should consider corporate bond unit trust funds, as your money goes to a group of company shares. You're likely to see some nice returns even if one or two of the companies go bust.
How about going further afield, to the USA - be careful though, as the exchange rate between the dollar and pound could go out of your favour. That said, the USA is often seen as the one who will recover first so it may be a wise move.
There are vast amounts of options - you could even go to the emerging markets, where stocks are cheap and things will pick up with the recovery of the West.
Whatever your idea, start making some moves, as tome is running out!
25 March 2009
In the UK, inflation is measured in a number of ways. One is the RPI, or Retail Prices Index. The other key one is the CPI, or Consumer Prices Index. It was this latter measure, the CPI, that rose yesterday. The RPI actually fell, mainly due to falling numbers in mortgage repayments.
Monetary policy is based on the CPI. So, changes in the CPI affects the governments, Bank of England, currency markets, businesses, and you and me.
Inflation affects the value of your money. If inflation goes up, your money will buy you less. Easy as that.
Once a month, the Office for National Statistics (or ONS) collects 120,000 of services and products from a range of retailers around the UK. Then it must check that its indices provide an accurate picture of the price fluctuations around the country. This is repeated every month with the same retailers and the same products.
24 March 2009
The Governor criticised the dollar and its current status as the only reserve currency of the world. According to him, the US currency's price is has become too high for users and for those that issue reserve currencies.
The relationship between the US and China is very important but the trade deficit has increased massively in recent years and the war of words between the nations has continued to rage.
The reliance on SDRs has lessened since they were created in 1969, and with the floating exchange rate system which came into play for the major currencies after the collapse of the Bretton Woods system.
The managing director of the IMF himself has said that the constant reliance on fiscal stimulus will not help to fix the world crisis, and that countries need to repair their banking systems before increasing funding.
But at the G20 summit in April, nations are planning to increase funding by a hefty amount, which goes against both the IMF head and the Chinese argument.
23 March 2009
The argument has escalated as the White House makes moves to implement a tax plan that will reclaim the money handed out at AIG and other leading companies that have accepted billions of dollars' worth of taxpayers money./
Wall Street has reacted furiously, and has warned that if staff are forced to enter a money exchange with the government, there may be largescale walkouts, and that this would only cause an even bigger disaster. Some have argued that it is not fair to effectively 'punish' staff.
This argument will no doubt continue for some time as the drama unfolds...
20 March 2009
The decision had its effect on the currency markets as the US dollar fell against all major currencies - 4.2 per cent against the Euro, and 3.9 per cent against the British Pound. This ended the dollar's recent rally - it had risen by more than 2 per cent against major currencies this year. On Standard & Poor's 500, there was an increase of 1.6 per cent.
The Fed has said that they are determined to do whatever it takes to beat recession, but many are asking themselves - why was this really necessary? Deflation is no longer as large a threat as it was, and the Fed have themselves conceded this. Market watchers have commented on the USA's big buck moves while emerging economies in places such as Eastern Europe are beginning to bear the brunt of recession.
It will certainly be on the G20 agenda as there have already been disagreements amongst world finance ministers on how to deal with the global crisis.
19 March 2009
In the report, Lord Turner critised the UK government for its "light touch" on banks, allowing the reckless and risky method of making profits which led to so many disastrous near-collapse of banking giants.
Banks have been in the habit of mortgage lending by relying on money markets and not on retail deposits - growth has been rapid but it is based on rocky ground...and many have been accused of not enough regard for the economy as a whole.
Things are set to change, and there will be a clamp down on the entire system - bonuses are to be reassessed as well.
It's a free market, but not as free as it was. The party is over, the drinks have run out and Britain is waking up from a raging hangover. Hopefully this will be the start of a stronger future for the country's economy.
18 March 2009
Speaking from Mansion House, King warned that being too cautious would cause the recession to last much longer than necessary and could lead to further disaster.
Recently, Germany and France have said that they do not believe they should inject more cash for now, and that they have done enough.
There are some who may think that King is being rather risky to so openly criticise other countries who have in fact so far retained more stability in the economic downturn,
In contrast, the UK's financial sector has come under widespread criticism over its instability and what many see as very risky and unnecessary decisions in recent times. It is no secret that the British Pound has taken a beating thanks to the lack of confidence in the UK market, reaching near parity with the Euro.
17 March 2009
Over 800 people a week are now complaining that their Personal Protection Insurance (PPI) was nothing but a scam, and that they were mis-sold their policy.
Insurers and lenders are claiming that there is no wrongdoing from their side, and that they have never mis-sold loan insurance.
But the cases are being looked into by the Financial Ombudsman Service (FOS) although many cases are being upheld, which means that lenders must pay compensation to customers.
The FSA has stepped in and is banning all selling of single-premium PPIs and the selling of loan insurance at the same time as the loan.
There is cynicism over the case, as some are saying that the number of complaints is so high only thanks to media attention and watchdog campaigns. Either way, if you are one of the many unemployed, you may be less than impressed to find that you are not covered...
16 March 2009
While Barack Obama's administration believe that more cash injection will boost the global economy - which is set to shrink for the first time since World War II - Germany and France will argue that now is not the time to spend more money.
Speaking ahead of forthcoming G20 summit meetings to commence on 2nd April, Merkel has said that it is now key to introduce and set a regulatory system which will prevent this kind of "economic catastrophe" from being repeated. She called for more "transparency of financial markets" during the speech, which was seen as a direct attack of Obama's administration. Obama's response was to try and compromise: more stimulus yet also more regulatory reforms.
So what has Germany done so far in its fight against the recession? Since late last year, it has implemented 100 billion euros to boost liquidity for companies, and a further 82 billion in other measures, including a money exchange of sorts, by offering vehicle owners premium for new, energy-efficient vehicles if they scrap old ones.
So far, Obama's administration has passed funding, last month seeing $787 billion put into place to boost the US economy. That, so far, is more than all European Union countries who have put forward around 400 billion euros.
13 March 2009
Mr Madoff, who was a prominant figure on Wall Street for over 30 years, managed to steal momey from countless victims, including private investors and charities. The total estimated figure stands at $50bn.
Yesterday, he attended his hearing, and pleaded guilty to all eleven charges surrounding the case. Many of his victims came to watch, and clapped as the handcuffs were put on Mr Madoff.
The money exchange of victims' funds took place via a scheme whereby new investors were paid by existing investors in a hedge fund.
12 March 2009
The same situation is being felt worldwide, and the IMF are being called upon to increase aid to those countries who had hitherto been not just the bread and butter but also the main importers of British goods. In the USA, the Treasury is also calling for more aid injections to poorer nations.
There are some who believe that if both imports and exports were to fall over a year period, then the trade deficit weighing on the UK would shrink. But surely it will be some months before the situation betters itself - because key markets are just not showing demand, on a global scale.
11 March 2009
The news also had an affect on the currency exchange market - the US dollar was weakened as a result. In the last half a year, it has been a stalwart of strength against most major currencies, and will probably regain this strength fairly soon.
But do the Americans want this? Surely a weaker currency might aid the US, allowing local demand to increase and foreign investment too? Right now, while it is cheap for Americans to travel and buy foreign mergers, it is suffering. Nobody's spending money and certainly not traveling. Nobody wants to buy US branches, and exports are suffering. McDonald's and Burger King have said international sales are down.
A period of weakness might be healthy, but it isn't going to happen until confidence - or at least some confidence - is restored in the financial sector and the economy as a whole. Until then, US companies face some hard knocks as quarterly results are announced.
10 March 2009
The sterling's poor status is not aided by the world's view of the UK economy and in particular the banking sector. The latter has taken another blow thanks to the government's decision to up its stakes in Lloyd's.
On Monday, the pound fell by over 2 per cent against the dollar and the euro, which was its sharpest daily fall in a month.
Investors are increasingly looking to safer ground as the UK suffers. The Bank's decision to begin quantitative easing is also receiving mixed reactions.
09 March 2009
As unemployment figures increase, more people are dealing with money issues and are therefore seeking debt advice. What they should look out for, say the OFT, is that the website they are considering carries a consumer credit license and act in accordance with the OFT's guidelines.
Any consumers unsure can visit the OFT website for information. Another way of finding out about a service is to have a look at the Terms and Conditions. Note though that websites are perfectly within their rights to charge for advice services.
06 March 2009
The move coincided with the latest interest rate cut which has now taken the rate to 0.5 per cent - once again, the lowest ever level.
While the Bank hopes that quantitative easing will quick-start the economy from its relative standstill, some are concerned that the move is not necessary, especially given the rate of inflation is still above target.
Europe's central bank have not ruled out quantitative easing but are no way near implementing the move just yet।
What does this latest action mean for the future of Britain's currency?
05 March 2009
So far, Nationwide has been proud of its 'no fee' policy - indeed only last year, a divisional director was quoted as saying that other banks charge 'costly and unnecessary' fees which they themselves steer clear of. Till now that is...
Consumer watchdogs have reacted with disappointment at the decision, and have even accused the building society of selling out and joining the bandwagon.
Foreign exchange is already an area which requires a bit of shopping around for holidaymakers, and now it seems it is worth having a closer look at ways to spend money abroad as well.
26 February 2009
The bank has been steeped in disaster since the Lehman Brothers failure brought near catastrophe to the banking sector as a whole. RBS has racked up debts through bad charges and the very unsuccessful acquisition of Dutch bank ABN Amro. Being blamed at the forefront are former managers at the bank, who are being accused of reckless and irresponsible behaviour.
Union leaders expressed that they feel it is now of paramount importance that the government steps in to fully take over the bank. At the moment, 70 per cent of the bank is owned by the taxpayer but full nationalisation might mean that more bank workers are protected.
Lending will increase, though who would want a secured loan from a bank embroiled in such difficulties? That is the question being asked by many, and the shareholders and bondholders will also be wondering how safe they are in the coming days.