Forex Trading News

Inflation generally causes the Fed to tighten monetary policy. This impacts asset classes by removing liquidity from the financial system.  Namely, the process of raising interest rates and/or slowing the pace of central bank asset purchases slows money and credit creation. This is the point at which you often see the classic moves that mark […]

First, let’s cover some basics about how central banks and their processing of raising and lowering interest rates impacts currencies. What is a tightening cycle? A tightening cycle involves the central bank of a country raising interest rates. For example, if it was believed to be good for the economy, the Fed may raise its […]

Turkey’s central bank cut rates by 100bps in November 2021, which was expected by the market and Bloomberg consensus. However, given Turkey’s economics fundamentals, the rates cuts were not necessary, leading the country to another currency crisis.     Why did markets throw a tantrum? They didn’t want the CBRT (Turkey’s central bank) to cut […]

The credit impulse has been given a lot more attention over the past several years as a potential variable to include as part of a tactical asset allocation strategy. Traders have long known that credit creation is a big factor in what determines prices. The price of anything is the amount of money and credit […]

In a bid to protect retail traders from increasing volatility, Axiory Global, the multi-asset, Belize-based broker, has lowered its leverage limit on the Swiss franc to 1:20. Axiory FX Trading is the first broker to make the move to limit traders from opening highly leveraged positions on the CHF, with global sentiments predicting increased volatility […]

What is the difference between price and value? The price of anything is the money and credit spent on it divided by the quantity. While the value of something is often taken to just be the price as represented by a certain unit of accounting (dollars, euros, yen, pounds, etc.), they are different.  Fundamentals of […]

The PBOC, ECB, Federal Reserve, and Riksbank all are looking to develop central bank digital currencies (CBDC). In this article, we’ll cover the status of each, the uses, and the implications. CBDC is one of the most important topics in the currency markets at the moment. It has implications not just economically and technologically, but […]

Cryptocurrency vs. stocks really has its root in where we are in the global debt cycle, fiscal and monetary policy, money, credit, and the role of the dollar and other reserve currencies going forward.  The short answer in the cryptocurrency vs. stocks debate is that they’re both viable as stores of value to grow and […]

In basic terms, the cross currency basis is a measure of the relative shortage of a certain currency in the market relative to its demand. Cross currency basis swaps reflect this relative shortage and work as a type of currency hedge, or a type of hedge on a broader global portfolio.  The premium or discount reflected […]

The largest differences in policy are not seen between developing countries, but among emerging countries. This is driving movements in emerging market FX.  Emerging market are running tighter policies Emerging markets as a whole are running much less easy monetary policy, lower budget deficits relative to output, and are generally trying to keep sound currencies […]