Forex Market Facts

The FOREX MARKET FACTS THE DAILY AVERAGE TURNOVER IN FOREX MARKETS IS 5.34 TRILLION ON A NET BASIS $5.34 AS OF APRIL 2013 TRILLION REPORTED BY THE BANK OF INTERNATIONAL SETTLEMENTS TOP TRADING COUNTRIES UNITED STATES UNITED KINGDOM SWITZERLAND SINGAPORE HONG KONG JAPAN The Japanese are perhaps the only country which has contributed a lot to technical analysis as we know it today. TRADING TIMES JAPAN - THE CANDLESTICKS Heiken Ashi, Renko, Kagi are the chart types discovered by the Japanese rice traders besides arious technical indicators, the most famous being the Ichimoku Kinko Hyo RICE us The overlap of two trading sessions is always the most active with volumes surging. The Asian - London trading session and the London - US session overlaps are the most active. 12AM 1AM 2AM 3AM 4AM 5AM 6AM 7AM 8AM 9AM 10AM 11AM 12PM 1PM 2PM 3PM 4PM БPM 6PM 7PM 8PM 9PM 10PM 11PM 11 12 1 10 24/5 LONDON * FRANKFURT JAPAN NEW YORK I New York I London I Asia SYDNEY IN Individually, the London and US trading sessions have more volumes and activity than the Asian session. CURRENCIES # 1 USD # 3 JPY #5 #7 CAD AUD MOST TRADED CURRENCIES according to the BIS in terms of volume: USD, EUR, JPY, GBP and AUD, followed by CHF and CAD. #2 EUR #4 #6 CHF GBP SALE RESERVE CURRENCY SAFE HAVEN THE CHEAPEST MOST EXPENSIVE Traditionally, the Japanese Yen and the Swiss Franc enjoy While the US Dollar is the CURRENCY CURRENCY world's reserve currency, the The Zambian Kwacha, The Kuwaiti Dinar, valued at 5,249,9 ZMK to 1 US Dollar ranks as the most cheapest currency in the world, relative to the US Dollar British Pound ruled the roost the status of being the safe haven currencies. In times political or economic crisis, valued at 3,46 US during pre-World War era enjoying the status as the reserve currency for global trading. Dollars is the world's most expensive currency relative to the US Dollar the Yen and the Franc see large inflow of funds. THE SWISS FRANC EXOTIC CURRENCIES COMMODITY & RISK CURRENCIES Since most of the respective country's exports depend on commodities, their values are often correlated to the rise and The Swiss Franc is Volumes in Mexican Peso, South African Rand, Norwegian Krone, Polish Zloty and other exotic considered to be a currency proxy for Gold. Besides the historically neutral stand, the Swiss take and its stable fall in commodities such as Gold, Silver, Platinum, Palladium, Crude Oil to name a few. The Canadian, Australian and New currencies are much less and they are primarily traded against the US Dollar, Euro and the British Pound. political environment. Zealand Dollar also gain when investors take on more risk. NICKNAMES MOST TRADED CURRENCY PAIRS by volume and popularity: EURUSD, USDJPY and GBPUSD Cable GBP/USD Fiber EUR/USD 01 EUR + USD E Chunnel 1F EUR/GBP Loonie USD/CAD E Aussie AUD/USD Kiwi 02 USD + JPY NZD/USD Ninja USD/JPY Guppy GBP/JPY Orbe 03 GBP + USD USD = the Buck or the Greenback FIAT CURRENCIES The currencies that we use today and trade are known as Fiat Currencies, as they are not backed by any asset except the full faith and credit of the respective Governments. 1940 The Fiat Currencies came into existence after the US broke away 1944: BRETTON from the Gold standard at the Bretton Woods agreement WOODS AGREEMENT Examples include the Nixon Shock, which saw the world break The Bretton Woods agreement was established in 1944 with the US Dollar pegged to the Gold, known as the 1950 away from the Gold standard. Gold standard. The world's currencies were then pegged to the US Dollar. HISTORICAL FACT: Every 30 - 40 years sees a new monetary system being introduced. 1960 Historically, Fiat currencies have an average life span of 27 years. Gold is still a favorite amongst investors and enjoys the status of being a hedge against inflation. When inflation rises, which results in a currency being devalued, Gold prices 1970 often tend to rise. 1971: NIXON SHOCK US president Richard Nixon, in 1971, broke the Bretton Woods agreement by removing the Gold standard and by default making the US Dollar the world's reserve currency. It paved way for the free floating exchange rates that we see today. 1980: SILVER THURSDAY 1980 In 1980, on March 27th, Silver prices collapsed as the Hunt Brothers (Nelson Bunker Hunt and William Herbert Hunt) cornered the Silver market picking up the metal at $6 an ounce, which rallied to $48 an ounce. Prices soon collapsed, leaving the Hunt Brothers to find money to avoid a margin call for $100 million and resulted in several US banks lending them a line of credit to survive the crisis. Silver Thursday also marked the end of the US stock market crash. 1990 1992: BLACK WEDNESDAY September 16th 1992, a Wednesday, where George Soros made over 1 million British Pounds by shorting the GBP as the UK pulled out of the European Exchange Rate mechanism. 2000 1999 - 2002: THE EURO The Euro is a relatively new currency that was first adopted in 1995 and was established on 1st January 1999 and became operational in 2002 January. It is also the world's second reserve currency 2010 The British Pound Sterling is the oldest surviving Fiat currency at an age of 317 years and counting. after the US Dollar. PARTIES / TRADING PLAYERS HSBC CHARLES DOW The founder of the Dow Jones newswire, the COUNTER PARTIES IN FOREX CENTRAL BANKS The Central banks enjoy a certain amount of The biggest counter parties in forex trading are the interbank markets that make up the autonomy from their respective Governments and is tasked to maintain price stability. The Central banks are referred to as lenders of last resort and are the only authorized and legal institutions that can "Print or Create Money'. Wall Street Journal, Charles Dow is majority of the liquidity pools. These include banks such as Deutsche Bank, Societe considered the father of modern Technical Generale, Citibank, HSBC, Bank of America, Nomura amongst many more, spread across the globe. Analysis after his tenets, famously known as Dow Theory was published. Dow was perhaps the pioneer in aspects of trends and divergences. QUANTITATIVE EASING This has been the norm of Central Banks after the 2008 financial crisis. Central banks started printing money (figure of speech) in order to stimulate economic growth. US LABOR MARKET DATA (NFP) HISTORICAL FACT: Although the US Federal Reserve is known for NEWS AND EVENTS starting QE, history shows that the Roman Empire, in 33AD marked the first recorded period when Tiberius started a form of QE to revive the Roman Historically, the US Non-farm payrolls, and the unemployment data released by the BLS, attract the highest volatility among any other news release (with the exception of Central Bank interest rate change announcements). economy. The next most volatile news releases after the NFP is the GDP and Retail sales data. orbe < www.orbex.com Investor Alert: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. 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