An Overview of the Daily Forex Trading

This piece talks about the fundamental analysis of Euros and Dollars. Recently, Chris Williamson, IHS Markit stated that the August flash PMI hints at the steady growth path of the Eurozone. He added that there are hardly any signs of the recovery that are being derailed by Brexit uncertainty.


Forex Trading and the Foreign Exchange Market

Forex trading itself is a very volatile market. Buying, selling and exchanging currencies takes place at a global level. In terms of the volume of trading, it is certainly the biggest market in the world. All the bigger international banks are some of the main participants. Since the foreign exchange market works through such financial institutions, it ends up operating on several levels.

So typically, the banks turn to smaller financial firms. They are called dealers and are actively involved in foreign exchange trading on a larger scale. Usually, the trades between foreign exchange dealers run into hundreds of millions of dollars!

In the Words of Chris Williamson

By his statement, he means that the business activities in the Euro area have increased in the month of August. This is simply due to the fact that the territory of economic expansion has shown improvement in the common monetary area. While talking about the manufacturing purchasing manager’s index, it has actually hit 53.3 in the current month. The policymakers have been closely watching it and have remarked that this figure has slightly increased from 53.2 in July.

In addition to this, it is to be noted that the figure below 50.0 reflects at the decline of the activity. On the other hand, the figure above this signifies a great expansion. According to the economists, the estimated PMI fell to 53.0. To add on, the official figures highlight that the Euro zone economy has slowed in the last three months. The economy boosted in the first quarter and is still showing a steady growth. Yes, it is true that the greater contribution is from France.

Remarks by Brett Ryan

Brett Ryan, Deutsche Bank Securities Inc., has commented that the increase is a much needed when the rates of interest are low. Ryan talks about the status of the US Dollar and remarks that credits have continued to ease with the increase and the consumers are in the best state. In the existing cycle, the builders are actually replying with more supply that has posed to be a biggest issue. Furthermore, the new home sales in the US have increased more than actually what was expected. The reports of the Department of Commerce signified that the rate of new home sales have boosted up to 12.4 % while the seasonally adjusted annual rate was 654,000 in the month of July.

Further, while talking about the reading of the previous months, it was revised to 582,000 in contrast to the original 592,000 units. Moreover, the expansion of July has certainly exaggerated the strength of housing market. It has been seen that the single-family home sales have become volatile month-to-month. Yes, it was higher by around 31.3% as compared to the last year. In addition, the new single family homes rose up to 40.0% especially in the American Northeast. In the Midwest region, the same increased to 1.2% while it was up by 18.1% in the South. Not to forget, the west region has remained with no further improvements. Moreover, the sale of the inventories of new homes has come down to 233,000 units in the month of July.

Therefore, it is clear that the US dollar has risen and is currently trading at 1.1326 against the Euro. No doubt, the other currencies are also at a lower rate in comparison to the US dollar.