Using leverage is a popular way to trade the Forex market. It allows you to trade bigger and faster, and can also earn you more profits. However, it can also cause you to lose more money than you could have otherwise. Before you use leverage, you should consider your level of experience, timeframe, and appetite for risk.
Forex leverage is the ability to enter a trade that is more valuable than the money you have in your brokerage account. For example, if you have $100 in your account, you can open a trade that is worth up to $10,000. The leverage ratio will vary based on your broker. If you are an experienced trader, you can leverage up to a thousand:1 or more. You can also use leverage to diversify your risks. For example, you can buy a position in a currency pair that is a cross rate. This means that the price of the two currencies will fluctuate, but not by much.
Leverage is usually measured in percentages, and it’s usually calculated based on your account balance. For example, a broker might provide you with a 50:1 leverage ratio, which means you can enter 50 trades using just one thousand dollars of your money. This is a lower risk level, and it’s easier to absorb losses. However, the leverage ratio can also be higher, such as a 1:10 ratio.
Forex leverage can be calculated using different formulas. The most common is the ratio or multiple. If you open a trade with a 100:1 leverage ratio, you will need to put up a fraction of your money as a deposit. The rest of the trade value is lent by your broker. If you lose your trade, your broker will repay you, minus the margin percentage.
Another example is the trade with a ten to one leverage ratio. If you open a position with a ten to one ratio, you will need to put up ten units of your basic currency to make the trade. The other thing to consider is the margin percentage. The margin percentage can be measured by dividing the ratio by the required equity.
Forex leverage can be dangerous, especially for new traders. You need to consider your risk tolerance, your timeframe, and your forex experience level. This is important because you can make a lot of money using leverage, but it can also wipe out your initial investment. Also, you need to consider how much money you want to invest. If you are looking to trade the Forex market for a living, you might consider using leverage to minimize your risk. The leverage ratio of 1:10 might sound like a lot of money, but it’s a lot less than the $113,000 you would need to buy one lot of the GBP/CAD currency pair.
Leverage is a good way to increase your exposure to the Forex market, but it can also increase your risk. Leverage ratios can vary from 10:1 to a thousand:1, and you should use risk management techniques to avoid overextending yourself. You should also remember that there are no guarantees in the Forex market, so you should also take into account your level of appetite for risk
]]>Despite the strong rally in the Dollar Index (DXY) over the past several days, the EUR/USD rate is on the verge of breaking through an August high. The pair is currently trading at 0.9828 in the North American session, and should be looking to test the August high of $1.0069. However, the USD will need to be able to pull back to avoid testing its key support levels. Ideally, the pair should avoid testing the former support zone around May lows at $1.0349.
The Dollar has been on a strong run in recent weeks as the energy crisis in Europe and the weakening of the Yen continue to push the currency higher. However, there are still macro worries surrounding the Eurozone that could limit the pair’s upside. While the pair was hit hard last week, the market is now easing its concerns and may even be looking to continue its momentum.
In the US, retail sales are expected to rise by 0.5% month-over-month in August. Analysts expect the Core Retail Sales reading to be below estimates. However, the headline CPI may be slightly higher. The Federal Open Market Committee (FOMC) will release the minutes from its last meeting tomorrow. Whether or not the committee decides to stick with its current path for implementing higher interest rates will be very important.
The Fed is expected to raise its key interest rate again next Wednesday. If the market has any doubts about the path that the Fed is taking, they can turn to the US Treasury yields. These yields are at two-month highs of 3.26.
Traders will be watching for any hints that the Fed is going to shift its hike cycle to a more restrictive path in December. While the current consensus is for a 75-basis-point hike, a smaller increase could keep the dollar bulls alive. However, the US economy is expected to grow at just a mediocre rate, which could mean a prolonged period of below-trend growth. Moreover, high inflation could undermine the outlook.
Inflation data for the Eurozone has shown a strong acceleration, from 9.1% in August to 9.9% in September. This marks a significant departure from the initial forecast of 10.0%. The ECB remains committed to its mandate of inflation being well controlled. But members have also been advocating for less aggressive policy tightening. As such, the ECB’s terminal rate is currently at 3%. This rate is believed to be lower than the ECB’s target rate of 1.25%.
The ECB’s members will speak later today. If they agree with the ECB’s policy direction, the pair could break out from its current high of $1.00345 to a second major resistance level at $1.0253. However, if they don’t, EUR/USD may fall back to its previous support level at $0.9934.
Today also sees the release of US Non-Farm Payrolls and Housing Price Index data. These releases are due before the retail sales figures for the Eurozone. Assuming the Eurozone’s retail sales figures are as strong as expected, the Euro will continue to appreciate against its US counterpart. However, a weaker retail sales report could drag the USD.
]]>Headline CPI slipped in January, but the core CPI, which excludes food and energy prices, climbed 0.4%, exceeding expectations. That was a sign that inflation is still rising, even though it’s moderated since September and the Fed has raised interest rates four times in the past year.
What to Watch Next: Retail Sales and Industrial Production
The markets got a boost Monday from stronger-than-expected employment data, and Wednesday will feature retail sales and industrial production. Inflation worries will continue to loom, with the consumer price index and producer price index releases coming on Thursday.
Economists expect flat consumer prices and a moderate rise in the core CPI excluding energy and food costs, which have been driving much of the market turmoil. That should temper concerns over accelerating inflation.
What Has the Dow Done After Past CPI Reports
Stock indices finished Monday lower but are still up for the year, with the S&P 500 and Nasdaq closing higher. That isn’t a sign that the market is about to turn in a bearish direction, however, especially with the Federal Reserve set to hike interest rates again in November.
It’s a good idea to be cautious of stocks that are exhibiting buy signals, especially when the market is concerned about inflation. Those stocks could be hit hard tomorrow, particularly if the consumer price index comes in higher than expected.
Inflation battle continues to rage, with markets struggling to find balance between a Fed that is trying to cool the economy and stubborn inflation. The 2-year Treasury yield jumped to 4.8%, while the dollar rose and shares of technology companies dropped.
Bespoke’s research also showed that the Dow hasn’t done too well on CPI days after the core CPI, which excludes food prices, comes out higher than expectations. On average, the Dow has lost 0.32% on these reports over the past two years.
What Has the Dow Done When Inflation Is High?
The S&P 500 fell 0.76% after the consumer price index came out slightly higher than expected. That was a big change from last month, when the index was up 3.7% after the same report.
This is the biggest gain for the year and a sign that inflation may be moving into a more balanced state. But it also means that the Fed will have to continue to raise interest rates.
The CPI is also important for consumer spending, and the earnings of companies that sell goods and services will be impacted by these changes. So, companies that benefit from consumer spending like beverage behemoth Coca-Cola (NYSE:KO) and travel platform Airbnb (NASDAQ:ABNB) will have a better chance of outperforming when the numbers come in.
]]>Headline CPI slipped in January, but the core CPI, which excludes food and energy prices, climbed 0.4%, exceeding expectations. That was a sign that inflation is still rising, even though it’s moderated since September and the Fed has raised interest rates four times in the past year.
What to Watch Next: Retail Sales and Industrial Production
The markets got a boost Monday from stronger-than-expected employment data, and Wednesday will feature retail sales and industrial production. Inflation worries will continue to loom, with the consumer price index and producer price index releases coming on Thursday.
Economists expect flat consumer prices and a moderate rise in the core CPI excluding energy and food costs, which have been driving much of the market turmoil. That should temper concerns over accelerating inflation.
What Has the Dow Done After Past CPI Reports
Stock indices finished Monday lower but are still up for the year, with the S&P 500 and Nasdaq closing higher. That isn’t a sign that the market is about to turn in a bearish direction, however, especially with the Federal Reserve set to hike interest rates again in November.
It’s a good idea to be cautious of stocks that are exhibiting buy signals, especially when the market is concerned about inflation. Those stocks could be hit hard tomorrow, particularly if the consumer price index comes in higher than expected.
Inflation battle continues to rage, with markets struggling to find balance between a Fed that is trying to cool the economy and stubborn inflation. The 2-year Treasury yield jumped to 4.8%, while the dollar rose and shares of technology companies dropped.
Bespoke’s research also showed that the Dow hasn’t done too well on CPI days after the core CPI, which excludes food prices, comes out higher than expectations. On average, the Dow has lost 0.32% on these reports over the past two years.
What Has the Dow Done When Inflation Is High?
The S&P 500 fell 0.76% after the consumer price index came out slightly higher than expected. That was a big change from last month, when the index was up 3.7% after the same report.
This is the biggest gain for the year and a sign that inflation may be moving into a more balanced state. But it also means that the Fed will have to continue to raise interest rates.
The CPI is also important for consumer spending, and the earnings of companies that sell goods and services will be impacted by these changes. So, companies that benefit from consumer spending like beverage behemoth Coca-Cola (NYSE:KO) and travel platform Airbnb (NASDAQ:ABNB) will have a better chance of outperforming when the numbers come in.
]]>Having spent the past few months in a narrow range between 1.3050 and 1.3850, the USD/CAD is starting to look at an upside breakout following a dovish BoC rate hike. The pair closed yesterday as a doji, but could easily see a pullback before it breaks above the key level. The upside breakout could take the pair up to 250 pips. If the BoC opts to raise interest rates by a full 50 bps, the move would put additional pressure on the US-Canada yield spread.
The recent decline in oil costs has been a major bullish catalyst for the Canadian dollar. However, despite strong oil prices, the Loonie has also been under pressure from recession fears. In September, the currency fell over 5% against the US dollar, the worst month for the currency since January 2015. The US Dollar is not alone in this weakness, as the Japanese yen has continued to fall sharply after G7 intervention.
The market has fully priced in a 50 bp increase to the BoC’s benchmark interest rate this month. The Bank of Canada has raised its policy rate seven times this year, the fastest pace since the 1990s. The BoC also lowered growth forecasts, which is one of the reasons for the weaker currency. The bank is also concerned about Europe’s potential double-dip. The upcoming inflation report will be a risk factor. If the inflation numbers are not too rosy, a BoC hike could be in the cards.
The Canadian dollar has lost 7% against the US dollar so far this year. This is a stark contrast to its strength against other G10 currencies. The strength of the Dollar is likely to remain for the foreseeable future, but the Fed may still be able to hike rates in small increments.
The Bank of Canada is also in a position to reprice the Canadian government’s 2-year government bond. If the BoC decides to increase interest rates by a full 50 bps, it could cause the bond yield to spike. In addition, the currency could experience inflation, which will put more pressure on imports and consumers.
The Fed’s announcement of Jerome Powell as its new chair has been a boon for the currency, but there’s still plenty of uncertainty in the Fed’s policy direction. Some members have suggested cutting short the $600 billion asset purchase plan, while others are dovish. The Fed is still expected to raise interest rates by 75 bps next week.
The Fed has a lot on its plate this week, including a Fed Beige Book and voting members. It’s possible that the Fed will vote to raise interest rates in the coming weeks, but there’s no real evidence to suggest that a hawkish stance is in the cards. It’s also possible that the Federal Reserve will raise rates in smaller increments than many are expecting.
With the Fed set to meet in less than two weeks, USD/CAD might see a retracement after the meeting. This could allow the US dollar to continue its assault against the Canadian dollar, but it’s still unclear whether a knee-jerk move is in store
]]>Inflation: The Biggest Driver of GBP Currency Forecasts
The main driver of the value of sterling has been UK inflation, which can be viewed as a gauge of how strong the economy is growing. The pound usually falls when there is a decline in inflation, and it usually rises when the economy gets stronger.
Inflation rates have stayed low since the financial crisis of 2008 and are expected to remain there for quite some time. However, the Bank of England is considering a Quantitative Easing (QE) program to increase the money supply and help stimulate growth. This can have a significant impact on the pound, especially since the UK’s economy is still very vulnerable to slowing or collapse.
Expectations for UK Inflation: The underlying UK inflation rate is expected to fall slightly in December, which could alleviate recession fears and support the pound. A rise in wage growth may also help bolster expectations for the Bank of England to hike interest rates in the future.
US Inflation: The next round of US inflation data is set to be released this week, and the results are expected to be slightly lower than last month’s numbers. This is expected to boost Treasury yields, which will increase demand for the pound and support the GBP/USD exchange rate this week.
UK Employment: The latest UK employment data showed a smaller than expected fall in jobs for November, pointing to continued resilience in the labor market. This data could also support the BoE to raise interest rates before the Federal Reserve, which could increase demand for the pound.
The pound was on a tear this past week, with the GBP/USD pair trading at its highest level against the US dollar since early December. However, a weaker-than-expected reading in UK industrial production and manufacturing output weighed on the Pound.
Traders were also awaiting the UK CPI report for further clues about the Bank of England’s monetary policy plans. The January report was expected to show that the Bank of England would continue to hike interest rates until it saw inflation drop back to its 2.0% target.
The Bank of England has already boosted interest rates twice this year, and it is likely to hike another 25 basis points in March, which could push the Bank Rate up to 4% by the end of the year. However, if the rate rises above 4%, the Bank of England could consider cutting rates again in the future to reduce the risk of a recession.
]]>While the ECB’s move was a surprise, it is still likely to be followed by a quarter-point hike in May that would mark the peak for the euro zone’s policy rates. As such, the XAU – the benchmark for the market – could continue to gain in a low-interest environment that should help reduce the opportunity cost of owning bullion.
]]>Traders are waiting for the October CPI data to come out this week, which could make or break the Fed’s rate hikes. Analysts are expecting a 0.6% month-over-month increase and a 6.5% year-over-year increase. But if the numbers fall short, the dollar could fall and stock prices could rise. If the numbers rise above 7.9%, it could lead to a spike in rates.
The US Dollar weakened from recent highs, which has led to a rebound in risk assets. The 10-year Treasury yield fell to 4.7%, and has regained some of the losses from this year. However, the broader outlook is still quite bearish. The S&P 500 is set for its worst year since 2008, and the Nasdaq 100 is down nearly 30%. The next few weeks could prove very volatile.
The Dow Jones Industrial Average rose 149 points, while the S&P 500 added 28 points. The index is up 5.5% since the CPI report. It has also soared ahead of Netflix and Alphabet earnings. However, investors may be disappointed with the data, which was expected to show a slight increase. The S&P 500 is also ahead of Tesla results, which could put pressure on the EV manufacturer.
The Cleveland Federal Reserve is projecting a 6.6% year-over-year increase in the core CPI. This excludes volatile energy and food items, which should see a 0.5% month-over-month increase. This forecast is above Wall Street’s consensus. However, the data suggests that the Cleveland Fed has underestimated CPI in 16 of the past 19 months.
The S&P 500 has a bear flag, which means it may fall to the 9,350 level, and the NDX could drop to 9,350. It’s not clear if the gap between these two levels will be filled in the near future, but it could be. If the gap is filled, the front of the Treasury curve will be most vulnerable.
The October 2022 consumer price index declined from a near-term peak of 9.0% in June, and was down from 8.20% in September. The index rose to a peak of 17.6% in traditional CPI reporting in June 1947. The inflation numbers also reflect an explosion in Federal Government Deficit Spending. The core CPI rose 0.3% month-over-month, but it’s still below the 0.20% month-over-month increase that analysts expected.
The Fed has raised rates three times this year, and the next hike will come at the September meeting. The FOMC has said its focus will be on taming inflation, and it has already tightened its financial system. The US economy may be cooling down, however, and the ISM manufacturing PMI declined in October. This will add to the uncertainty for investors, which means the Fed may slow its rate hike pace.
Investors may worry that the next rate hike will be too aggressive, and that it will only push the economy into a recession. However, the likelihood of a 75-basis point rate hike is around 90%. This could give investors a little hope that the Fed will be able to keep inflation in check.
]]>With the rise in popularity of crypto, Kenyans are increasingly interested in investing in it. But before making a move to invest in cryptocurrencies, it is important to understand the risks. In Kenya, the cryptocurrency market is not regulated, leaving consumers exposed to fraud. Furthermore, the complexity of the cryptocurrency market makes investing in it difficult for the average Kenyan.
Cryptocurrency prices fluctuate dramatically, causing losses for many investors. The most recent crypto crash saw the market lose more than half of its value. Fear of soaring interest rates and inflation caused investors to pull their money out of the market. The Central Bank of Kenya has warned Kenyans not to invest in cryptocurrencies in the country due to the risk of losing money.
The Central Bank of Kenya (CBK) is tasked with the regulation of cryptocurrencies in Kenya. To operate in the country, a company must acquire a license. The license covers any activity related to cryptocurrencies, such as receiving money from payees and sending it elsewhere. Kenyan authorities have the power to suspend the operations of such companies if they do not have a license.
While Kenya does not have specific laws relating to cryptocurrencies, Kenya has guidelines that apply to digital marketplaces. Those who operate P2P exchanges will be liable to pay taxes on all income generated through the transactions. Kenyan authorities have a general skepticism about cryptocurrencies, which are largely anonymous. However, they recognize the potential for fraudulent misappropriation, and are seeking to increase the integrity of the financial system.
The growth of peer-to-peer platforms in Kenya has raised the number of people who can access these services. However, this rapid growth has not accompanied a clear understanding of the risks involved in these loans. To improve the risk management process for users, peer-to-peer platforms should ensure that they explain to people about the risks and rewards of investing in their platforms.
Cryptocurrency is growing in popularity in Kenya. Kenyans have long struggled with digital transactions, but cryptocurrency has helped them to send and receive money without having to deal with third parties. However, the Central Bank of Kenya discourages Kenyans from using digital currencies because they are not backed by any central authority.
This paper aims to identify the impact of cryptocurrency on Kenya’s economy and how it will affect remittance fees and international transfers. It uses the mobile money platform BitPesa as its case study. It also examines how the cryptocurrency is used by Kenyans. The results suggest that there is a need for further research to understand the impact of cryptocurrency on the country’s economy. However, the paper also highlights concerns with the price volatility of bitcoin and the unregulated legal framework of digital currencies.
While there are no specific cryptocurrency payment declarations in Kenya, there are general guidelines governing AML/CFT. For example, the Kenya Association of Bankers (KAB) and POCAMLA have guidelines on transactions involving $10,000 or more. These guidelines may apply to cryptocurrency as well, but KYC requirements are likely to differ depending on the type of cryptocurrency and the amount of money involved.
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