forex trading help – Capital flows to US surge despite dollar weakness – Yahoo! News
Uncategorized Add commentsCapital flows to US surge despite dollar weakness – Yahoo! News
WASHINGTON (AFP) –
Foreign investment in US bonds and other long term investments, including from China, rose beyond expectations despite concerns over the weakness of the dollar, official data showed Tuesday.
Net long-term capital flows to the United States climbed to 40.7 billion dollars in September from a revised 34.2 billion dollars the prior month, according to the Treasury International Capital Data (TIC) monthly report.
Most economists had expected flows to reach 30.0 billion dollars.
On the whole, foreigners bought 133.5 billion dollars of US securities in September, the most since October 2008, from a revised inflow of 25.3 billion dollars in the previous month.
“This is the fourth consecutive month of positive net TIC flows and good news for the greenback,” said Tu Packard, a senior economist at Moody's Economy.com.
She said the Treasury data showed financial markets were on the road to recovery from the worst crisis in decades that arose from a home mortgage meltdown.
Although investors are pursuing more risky investments in line with recovery, there remains foreign appetite for US financial assets, Packard said.
Investors usually flock to the US dollar during financial and other troubles but the greenback took a hit in recent months on rising risk appetite and concerns over a ballooning US government budget deficit.
China, in the forefront of criticism on dollar's weakness, also raised its Treasury bond holdings in September to 798.9 billion dollars from 797.1 billion in August, the Treasury report said.
China, top holder of US debt, has consistently raised concerns about the mushrooming US debt, for fear it could erode the value of the dollar and its Treasury holdings.
The latest criticism came from China's chief banking regulator, who warned this week that persistently low US interest rates and a declining dollar were seriously affecting asset prices and threatening the global economic recovery.
The new data indicates that the weak dollar has actually helped to boost foreign purchases of US assets, said Kathy Lien of Global Forex Trading.
The data showed there was greater demand for long term over short term securities, suggesting that investors “have grown more confident in the US recovery and the financial markets,” she said.
“Despite all of their criticism, China remains a net buyer because they know by selling Treasuries in size, they have more to lose because they could drive bond prices and the US dollar lower, particularly if the market latches onto their flow,” Lien said.
The US data showed that foreign private net purchases of Treasury bonds and notes rose to 25.7 billion dollars in September from 14.8 billion dollars the prior month, and net foreign official purchases rose to nearly 19 billion dollars from 13.1 billion dollars.
Britain, Japan and Canada were the biggest buyers of US bonds for the month of September.
Whenever there is an opportunity to make large amounts of money, there will be people who are eager to jump right in and start making money. And where there are people who are eager to get rich quick with a minimum of effort on their part, there are fraudsters waiting to take their money. Experienced traders are wise enough to avoid the frauds – it’s the new traders who are most vulnerable to the forex scams that are slipping into the currency exchange market.
The U.S. CFTC (Commodity Futures Trading Commission), which regulates futures and commodities trading, warns new investors to be wary of frauds and scams that promise huge profits from your investments, in and out of the Forex market. The CFTC has issued several Consumer Fraud Alerts in connection with foreign currency trading. They offer the following tips to help you avoid being scammed.
Be skeptical of high-profit-low-risk come-ons.
“I made $1900 in one minute!” touts one sidebar ad for a Forex trading company. Ads that promise high returns on small investments with little or no risk to you are tempting bait. The fact is that while there are certainly big profits to be made in forex, there are correspondingly large losses. And most novice traders drop out of active trading by the end of their first year because they can’t afford the risk.
Be suspicious. Period.
Before you part with a penny, thoroughly check out the company or trader you’re planning to do business with. Check the CFTC’s consumer fraud alert page. Check to see if the company is registered with the CFTC, or is a member of the National Futures Association. Check to see if there’s any disciplinary action against the firm or company. Get even more basic. Get a valid address and telephone number, and verify that it belongs to the company. Check to be sure the person you’re dealing with actually works for the company. Especially if you’re doing business on the Internet, it’s very easy for a scammer to fake credentials.
Be wary of sending money over the Internet.
The Internet has made it incredibly easy for scammers to operate. It only costs $6.95 a month to have a professional looking web site hosted – that’s pennies a day to reach millions of potential marks. Before you part with credit card numbers, bank account transfer permissions or wire transfers, be sure to check out the company with all the authorities listed above.
Beware high pressure sales tactics.
Legitimate dealers don’t need to contact you with unsolicited email, or pressure you into doing business with them. If someone is pushing you to invest right now, tonight, this moment, it should set off huge warning signals in your head. A real dealer is more concerned with keeping you as a customer for the long haul. He’ll be patient while you check out his credentials and reputation. A phony dealer can’t afford that luxury – he needs to get you on the hook right now, or risk losing his score.
Be cautious of companies that tell you they’ll trade for you on the ‘interbank’ market.
The interbank market is a term for a loose network of currency traders that include banks, financial institutions and large corporations. Fraudulent currency trading firms often tell customers that they’ll trade for them on the interbank market where the prices are better. It should be a warning signal to you to stay away.
While technically not ‘scams’, you should also be wary of paying good money for training courses that promise you systems that are ‘guaranteed’ to earn you high profits. If the course advertises that their system will earn you huge profits with minimal risk, or guarantee you 40% return on your money in six weeks, take the promises with a huge grain of salt. Experienced traders understand that the forex market is a time market – while it’s possible to make large amounts of money in short-term trades, finding those profitable trades is a matter of being in the right place at the right time… which means putting in the time and the effort to be there.
They also understand that they’ll lose more often than they win – the trick is to keep your losses short and your profits long. Any company that guarantees that you’ll make a profit on all or most of your profits is coloring their advertising. Stick with trusted companies whose credentials you can verify and whose background you can check.
About The Author
More of Joseph Plazo’s killer articles
http://www.powerconsultants.net
Hey Readers! I’ve been comin across some crazy stuff the past few days from a few different blogs around the web which I just had to share with you. Check em out below…
Several central banks, led by India and China, are “rebalancing” their forex reserves portfolio. China, now the world's biggest gold producer, has increased … Read More…
Mandatory Forex Registration Looms Large
Prior to May of 2008, forex solicitors and money managers were not required to be registered. In what is now an infamous 7th Circuit Court of Appeals … Read More…
Setting Targets For Currency Trades
One such technique was described in Price action Forex trading. Using technical tool like Parabolic Stop and Reverse also suits this purpose; … Read More…
That’s all the news for today guys, so until next time, thanks for stopping by.
Recent Comments