Forex Trading News

Paradigm shifts occur when markets over-extrapolate one set of conditions into the future despite those conditions being unsustainable. The last decade and even the last 40 years are what traders and other market participants think will probably hold. However, that could easily be wrong because we’re now in a totally different world. If you take […]

Currencies rise and fall for various reasons, but FX is a fundamentally macro asset class. While equities may move a lot based on idiosyncratic factors happening at the company or the individual trading patterns of a singular entity, currencies are much more heavily influenced by country- or jurisdiction-level factors. Factors that influence the fall in […]

Russia’s invasion of Ukraine and sanctions imposed by NATO countries and western allies put the Russian ruble (RUB) into a tailspin against virtually all other emerging market currencies. The sanctions guarantee that Russia will have bad inflation problems. Tightening monetary policy can help take some of the air out of inflationary pressure, with the trade-off […]

An inverted yield curve is an interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the same credit quality. This is considered a negative yield curve, because it is “inverted” from the typical yield curve relationship, in which longer-term rates are higher than shorter-term rates. What Happens […]

Asset allocation and diversification might be related concepts in finance, trading, and investing, but there are slightly different. Asset allocation refers to the process of dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash. The asset allocation process takes into account the investor’s goals, risk tolerance, and investment horizon. Diversification […]

A US dollar devaluation would have an impact on movements in other asset classes. Currency volatility picked up with more inflation risk in 2022.       Post-2008, we’ve mostly been in a low interest rate world. However, when interest rates become so low to the point where they can’t be lowered any more, and […]

Real exchange rates (RER) refer to the rate of exchange between two currencies that is the product of the nominal exchange rate (the dollar cost of a euro, for example) and the ratio of prices between the two countries. When we talk about “real” in finance terms, it typically translates as something that is inflation-adjusted. For […]

Hedge fund strategies are generally placed into a few different buckets. The main overaching categories of hedge fund strategies include: global macro statistical arbitrage event-driven directional relative value distressed investing Each of these strategies employs a different approach to investing and comes with its own unique risks and reward profile. There are also numerous sub-strategies […]

The Russia-Ukraine conflict got people talking about reserve currencies. Specifically, what is the impact of war on reserve currencies? The US (which has large reserve status through the USD) and developed Europe (which has reserve status through the EUR and, to a lesser extent, the GBP) imposed sanctions on Russia to punish its economy and […]

Certain individuals holding certain types of assets in certain currencies face the biggest risk of wealth destruction today. Markets provide the biggest opportunities – and the biggest risks – when there are unsustainable flows in liquidity in places where the prices discount earnings or economic scenarios that are not likely to transpire. The risk of […]