13 October 2010 – The Wall Street 
A recent IDC market survey indicates that the Indian
Dollar falls further against Japanese yen
Continue reading the main storyUS DOLLAR V JAPANESE YEN
Last Updated at 15 Oct 2010, 03:40 GMT *Chart shows local time| $1 buys | change | % |
|---|---|---|
| 81.3950 | - -0.09 | - -0.10 |
The US dollar has reached another fresh 15-year low against the Japanese yen at the end of trading in Tokyo.
The dollar was worth as little as 81.12 yen at one stage, just above the post World War II low of 79.75 yen.
The dollar's continued fall reflects speculation that the US Federal Reserve will expand its quantitative easing programme.
But Japan's central bankers have also repeatedly threatened further action to curb the recent rises in the yen.
A strong yen is hurting Japanese export companies, which are relied upon to spearhead a recovery in Japan's struggling economyUS trade gap widens on increased Chinese imports
A slight increase in US exports was outstripped by a rise in imports The US trade deficit was wider than expected in August, figures have shown, in the wake of record imports from China.
US Commerce Department figures showed the gap between imported and exported goods grew by 8.8% to $46.4bn (£29bn).
Imports from China grew 6.1% in August to a record $35.3bn. The US trade deficit with China also set a new record of $28.0bn.
US exports to China remained essentially unchanged at $7.3bn.
The previous record trade deficit with China was $27.9bn in October 2008.
The US has been pressing China to let the value of the yuan rise against other currencies.
The American government says that Beijing's current policy, which limits the movement of the yuan against the dollar, gives Chinese exporters an unfair competitive advantage.
Overall, US exports edged up a slightly, by 0.2%, but this was overshadowed by a 2.1% increase in imports.
Meanwhile another report said prices at the wholesale level, apart from a sharp rise in food and energy costs, remained largely unchanged.
The Labor Department said that excluding those two categories, core wholesale prices rose by 0.1%.
Range of Methodologies for Risk and Performance Alignment of Remuneration - consultative paper
Ensuring that remuneration is effectively aligned with risk and performance is an essential element for reducing incentives that may arise from the design of remuneration schemes and that can lead to excessive risk taking. In practice, the idea that an employee's compensation should take account of the risks that employees take on behalf of their organisation has proven to be challenging to implement. As of October 2010, effective implementation of these principles by banks has not been achieved.
The Basel Committee's report on the Range of Methodologies for Risk and Performance Alignment of Remuneration issued for consultation analyses the methods used by banks for incorporating risk into bonus pools and individual compensation schemes. Banks use various methods to adjust remuneration to take account of risk and performance. Depending on the remuneration scheme's design and detailed features, the effectiveness of such methods in creating incentives for prudent risk taking varies significantly.
The report focuses on the practical and technical issues that might reduce the effectiveness of these methods. It also covers more general questions, including proportionality in the application of rules. The report, which contains a number of examples of banks' practices reflecting the supervisory experience to date, helps provide a representative, though perhaps still incomplete, picture of current remuneration practices in the industry. By providing clarification on the design of risk-adjusted remuneration schemes and by highlighting issues that may affect the effectiveness of the risk adjustment methodologies, the Committee expects the report will help support and facilitate the broader adoption of sound compensation practices in the banking sector.
The Committee welcomes comments on all aspects of this document by 31 December 2010. Comments should be submitted by post (Secretariat of the Basel Committee on Banking Supervision, Bank for International Settlements, CH-4002 Basel, Switzerland) or email (baselcommittee@bis.org). All comments will be published on the Bank for International Settlements' website unless a commenter specifically requests anonymity or confidential treatment.
Business: The Economy
Trillions in currency trading
Currency traders doing $1.5 trillion in daily business
Average turnover on the world's foreign exchange (forex) markets reached almost $1,500bn a day in April this year, according to the Bank for International Settlements (BIS).
The volume of forex trading is far greater than the size of foreign currency reserves held by any country.
The size of forex trade has played its part in the currency crises of emerging nations over the past year.
The exact figure, $1,490bn, or $1.49 trillion, is 26% higher than when the BIS, which represents central banks, last measured flows in 43 different countries three years ago.
Centred in London
Almost a third of all forex trading occurs in London, by far the world's largest centre, with New York and Tokyo second and third.
At current values, transactions involving US dollars on side of the trade accounted for 87% of forex business. The Japanese Yen was the second-most traded currency. ![[ image: US dollar and yen most traded]](http://news.bbc.co.uk/olmedia/195000/images/_196670_dollar_and_yen150.jpg)
US dollar and yen most traded
However, less than half the transactions were simple 'spot' deals, the immediate purchase of currency for commercial transactions.
Most forex trading is on the futures market where currency buyers undertake to buy at a set price at a specified date in the future.
Futures gambling
Foreign exchange futures allow companies to plan their import, export and foreign investment operations with the certainty of knowing what will be the value of the currencies they trade in.
However, increasingly the forex futures market is home to rich individuals and 'hedge funds' who speculate against currency movements attempting reap windfall gains. George Soros: forex speculator
George Soros is the most high-profile example of such currency speculators.
The advent of the euro next year is expected start to stem the sharp increases in forex dealings as eleven European currencies consolidate into one over the next three years.
Global crises
The figures shed some light on how financial crises began in emerging economies over the last year.
The ability for massive daily foreign currency flows to take place made possible the almost overnight collapses of the currencies of countries like Thailand, Indonesia and Russia.
As confidence in the economies of these countries fell away, demand for their currencies fell as investors took their capital out or stopped bringing it in.
Governments had tried to buy their own currencies to underpin their value but couldn't keep up with the sellers.
When they stopped their own forex activity, the forces of demand and supply saw the baht, rupiah and rouble in turn crash in value deepening the crisis of confidence and economic slowdown.
Speculators constantly watching for these market developments hastened the process.
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About XForex
XForex is a web-based Forex trading platform that offers unique advantages to traders in the gold, silver, and currency markets. Founded in Cyprus in 2003 as Trouvia Investments, the company expanded its operations into Canada and today offers services to its clients during all regular market hours. The website was re-launched in August of 2009, and offers many more services than it did previously; these services include video tutorials and a new demo account feature. Since the Forex market is open 24 hours a day for five and a half days per week, XForex is available during the same time period for trades and to assist its customers. XForex offers real-time market updates to its clients, ensuring that they obtain the most current information available at all times. Because XForex is a dealing desk broker, it covers the opposing side of all client trades.
Regulatory Oversight
XForex is governed by European Union regulations; this requires that it abide by the laws of each country in which it does business. It is funded by Deutsche Bank, Saxo Bank, and the Canadian Imperial Bank of Commerce.
Contact Information at a Glance
A full list of telephone numbers for countries served by XForex is available at http://www.xforex.com/about-us/contact-us.
Their support email is support@xforex.com, and XForex can be reached by mail at:
Ultimass Global Holding Inc.
P.O. Box 71
Road Town
Tortola
British Virgin Islands
Vital Trading Information About XForex
XForex is web-based and works with all major browsers, including Firefox and Internet Explorer. It requires no downloading or installation and can be used anywhere with an internet connection; this ensures the highest level of accessibility and convenience for XForex customers. The XForex platform is optimized to work well on most mobile applications as well. The interface itself is easy to use and provides an online guide to help new users acclimate themselves to the various commands and functions of the platform. Traders new to Forex transactions will also appreciate the short market tutorial designed to help them understand the various aspects of Forex trading.
Commissions
XForex does not charge commissions to its clients on trades, deposits or withdrawals; it derives its income from the difference between the bids and asks prices. This is a significant advantage for beginning Forex traders, who can more quickly achieve their financial goals without the burden of additional charges. Despite the lack of commission fees, XForex provides a full range of client services including personalized investment advice and multi-lingual online support; since XForex caters to the international investing community, its support staff offers assistance in English, Spanish, French, Turkish, Portuguese, Russian, and Arabic.
Minimum Deposits
XForex offers three levels of Forex accounts for their customers. The Mini requires a minimum deposit of $100 and offers a 10% bonus for the first deposit. Standard accounts require a $1000 minimum deposit and provide a 30% bonus on the initial deposit, while V.I.P. accounts can be customized to meet advanced trading needs and require a $10,000 minimum deposit, with a 30% bonus added to the first deposit. XForex accepts bank transfers and a number of major credit cards for deposits.
Leverage
XForex offers its clients up to 200:1 leverage, allowing them to take a much larger position in the Forex market. While this allows experienced traders to take advantage of opportunities as they arise, it can also lead to much greater losses. XForex offers safeguards that ensure that investors cannot lose more than they have invested with the company; this limits leveraged positions for low-end investors, but provides a security net in the case of significant loss on an investment.
Demo Account
Prospective customers can practice their trading skills with a user-friendly demo account. It offers all the same options as regular XForex accounts, and gives new clients a risk-free arena in which to hone their trading acumen before putting actual money on the line. Demo accounts function exactly as the regular accounts with the same minimums and bonuses applied to give new traders a real taste of Forex trading without the real risk.
Trading Functions
The XForex platform offers most of the trading options Forex investors expect, including 21 currency pairs and gold and silver trading. Trading functions include stop loss orders, trailing stops, take profit orders, market, and limit; XForex trading spreads are fixed and typically range between 3 and 30 pips. XForex does not allow hedged trading where buys are offset by simultaneous sells in the same currency. The XForex platform does not allow the use of Forex Robot or Meta Trader through its website. One unique feature of the XForex platform is the ability to track the current activities of the top ten traders; this can prove invaluable for inexperienced traders, who can learn from observing the experts in action.
Market Information
XForex offers its clients real time capital market information, along with daily market updates, charts, financial calendars, and other commentaries and reviews designed to help the beginning Forex trader and the experienced professional in the Forex market. In-depth Forex analysis helps traders identify trends and get in front of the market, helping them to achieve profitability in this highly volatile financial marketplace. The Overnight Express bulletins focus on bullet-point summaries of the Asian, North American and European markets, keeping XForex clients apprised of all developments in the Forex markets. Because XForex is strategically partnered with Reuters, clients are assured of the most current market information possible.
Security of Information
Data security is of the utmost importance to Forex traders, and XForex adheres to the highest industry encryption standards for online security, using SSL-secured servers and ensuring that client information remains confidential. Financial information is closely guarded and deleted once it is no longer relevant.
The Bottom Line
Most beginning traders will find XForex an excellent resource for learning the ropes of Forex trading. Most investors will appreciate the easy-to-use interface and the portability of the system; for advanced traders, however, the limited options for trade may make this less appealing than other Forex platforms on the market.
Gain Capital Group LLC was founded in 1999 by a group of experienced Wall Street professionals. Since then, it has built up an impeccable reputation for offering some of the very best forex services in the world. Forex.com’s clients come from over 140 different countries, and include individual traders, Commodity Trading Advisors, fund managers and many other investment professionals. With a corporate headquarters in Bedminster, New Jersey and an additional location on Wall Street, Forex.com/Gain Capital is a topnotch forex broker.
Beyond its far reach, Forex.com/Gain Capital Group has received many important awards through the years – something that further emphasizes its exceptional level of service. This company offers a broad suite of services, with accounts geared toward amateur traders and experienced traders alike.
There are many popular online foreign exchange market brokers doing business these days. If you’re like many people, then you’d probably prefer to stick with a well established and reputable broker. Some brokers offer exceptional trading spreads; others boast easy-to-use trading platforms that make getting into the forex game a breeze. Forex.com – a division of Gain Capital Group LLC – manages to combine both of those attributes, and many more. Whether you’re just starting out in the foreign exchange market or are a very experienced trader, Forex.com/Gain Capital is bound to have a product and an account type that will work for you.
“Risk-On, Risk-Off”
It sounds like a play on words, based on the Karate Kid refrain, Wax-On Wax Off, and for all I know it was. Still, I rather like this characterization – coined by a research team at HSBC – of the markets‘ current performance. Moreover, you’ll notice from the placement of that apostrophe that I’m not just talking about forex markets, but about the financial markets in general.
What we mean is that when risk appetite is high, credit markets and equities and high-yielding currencies tend to rally together. When risk appetite fades, “those assets fall and government bonds and safe-haven currencies, including the U.S. dollar, the Swiss franc and, in particular, the Japanese yen rally.” Data from Bloomberg News confirms this phenomenon: “The 120-day negative correlation between Intercontinental Exchange Inc.’s Dollar Index and the Standard & Poor’s 500 Index was at 42.4 percent today, and has been mostly above 40 percent since June 2009.”
Skeptics counter that this correlation is tautological. Anyone can point to a stock market rally and declare that “Risk is Back On.” In addition, it’s not wholly unsurprising that there are strong correlations between low-risk currencies and low-risk assets, and between high-risk currencies and high-risk assets. According to HSBC, however, this time is differentFor example, models suggest that the recent decline in volatility should have caused these relationships to break down. That they defied predictions and remained strong suggests that we have witnessed a significant paradigm shift. In the past, “Rising correlations are also tied to weak macroeconomic conditions.” At the moment, this could hardly be more true, with global economic growth flagging.
Statisticians love to teach the dictum, Correlation does not imply causation. Nonetheless, I think that in this case, I’d wager to say that the equity and credit/bond markets are driving forex, rather than the other way around. Consider as evidence that, “[Retail] Investors withdrew a staggering $33.12 billion from domestic stock market mutual funds in the first seven months of this year,” and shifted this capital into bonds. While this wouldn’t in itself be enough to drive the Dollar higher, it epitomizes the steady shifts that have been taking place in capital markets for nearly a year, broken only by the S&P/Euro rally in the spring (which now appears to have been an aberration).In fact, these shifts are once again creating shortages of Dollars: “This week, two banks bid at the European Central Bank’s weekly dollar liquidity providing auction – the first time there have been any bids since May – suggesting that they could not raise dollars in the market.” This suggests that demand for the Dollar could continue to grow.
Some analysts have suggested that the low-yielding US Dollar is already on its way to becoming a funding currency for carry traders, but I think this is wishful thinking. The HSBC report supports this conclusion, “A weakening of the ‘risk on-risk off’ paradigm is likely only once macro conditions are improved in a sustainable way…Currency performance will likely be tied to the ebb and flow of the perception of risk for some months to come.” In short, until there is solid proof that the global economy has emerged from recession (even if ironically it is the US which is leading the pack downward), the Dollar will probably remain strong.