FX Island

Those trading in the foreign-exchange market (forex) rely on the same two basic forms of analysis that are used in the stock market: fundamental analysis and technical analysis. The uses of technical analysis in forex are much the same: price is assumed to reflect all news, and the charts are the objects of analysis. But unlike companies, countries have no balance sheets, so how can fundamental analysis be conducted on a currency?

Since fundamental analysis is about looking at the intrinsic value of an investment, its application in forex entails looking at the economic conditions that affect the valuation of a nation’s currency. Here we look at some of the major fundamental factors that play a role in the movement of a currency. more…

Forex brokers offer their services without charging a fee. Forex brokers get their share of fee from the other trading activities like purchasing, selling, holding foreign currencies, interest accrued on funds deposited and rollover fees. The Forex brokers do not charge anything extra from the investor. An experienced and veteran forex broker has years of rich experience which prove to be useful in understanding the markets and also guiding the investor accordingly.

It is really amazing how the brokers offer their services without charging a fee for it. The services rendered by a forex dealer are very similar to that of a middleman. Let us take for example as bread middleman. This person purchases bread from the wholesale market at a wholesale price, he then sells it to the retailer. The difference he makes is his profit. In case the bakery store needs to replenish further stock of break, they would contact the middleman. The difference which the middleman charges is his brokerage and his profit as well. more…

Saving is sin, and spending is virtue…check out which country rank number 1 and last in current account balance.

Interesting article written by an Indian Economist:

Rank, Country, Current Account Balance (million US$)

1 People’s Republic of China (PRC) 179,100
2 Japan 174,400
3 Germany 134,800
4 Russia 105,300

………who is at number 163.  Find out here.

Japanese save a lot. They do not spend much. Also Japan exports far more than it imports. Has an annual trade surplus of over 100 billions. Yet Japanese economy is considered weak, even collapsing.

Americans spend, save little. Also US imports more than it exports. Has an annual trade deficit of over $400 billion. Yet, the American economy is considered strong and trusted to get stronger.

But where from do Americans get money to spend?

They borrow from Japan, China and even India. Virtually others save for the US to spend. Global savings are mostly invested in US, in dollars. more…