Bitcoin Hits $13 Billion Value

Although the push for increased international regulation of Bitcoin continues to gain momentum, the threat of oversight and scrutiny has done little to assuage to the fascination with this anonymous online currency whose value has now reached a monumental $13 billion. Although Bitcoin remains one of the most popular “virtual currencies” in existence today, there are well over 90 of these monetary systems currently in operation, many of which have gained some measure of credibility with retailers and merchants around the world.

The call for enhanced scrutiny of virtual currencies is largely due to the stigma that they have gained due to their popularity in criminal circles. The anonymity that Bitcoin affords users has become a valuable tool for those wishing to engage in illicit activities and avoid a larger paper trail.

Although several Bitcoin operators and exchanges did suspend their operations following the initial onset of the “big brother” bureaucratic mechanisms, the majority of these organisations are now operating at full capacity yet again. Regulation, in itself, is not necessarily a bad thing, some prominent Bitcoin heavyweights have argued. By allowing for an internationally mandated “rules of order,” Bitcoin users can also gain increased confidence in the currency due to the fact that the threat of catastrophic seizure or infrastructure collapse is much less likely. Regulation may also help protect virtual currency users from malicious scams and fraudulent offers that, up until this point, have been relatively invincible due to previous policies.

As virtual currencies continue to gain prominence in the contemporary economic landscape, it is inevitable that dramatic policy changes will continue to occur. Where this ultimately ends, however, remains to be seen. As many virtual currency users will attest to, the appeal of these products is not only in their monetary worth. On an idealistic level, Bitcoin represents an opportunity for “sovereignty” in a world that many believe is already too over-regulated. The community itself is largely responsible for Bitcoin’s success. Were enhanced policy-making to confine the level of operations enjoyed by current Bitcoin users, the currency may see it’s overall popularity and, thus, worth, decline.

Osborne to target foreign exchange manipulation

In a statement which could be causing numerous brokers and financial strategists to sweat, Chancellor Osborne has announced that he will be working closely with a variety of regulatory experts in order to ensure that the foreign exchange marketplace within the City Of London is free of corruption and other dubious dealings. One of the final unregulated marketplaces on the planet, the world of foreign exchange, also referred to as “forex”, remains largely out of sight and is primarily managed by traders who have been given a variety of buy and sell orders on behalf of larger global companies.

According to recent allegations, it is believed that 15 major banks have now been involved in forex currency manipulation. 9 of those listed have now suspended or fired forex traders that had previously been working for them. That being said, the extent to which the Osborne and his team of UK-based watchdogs can invoke change is somewhat limited, due in large part to the fact that the forex market remains a global enterprise, largely out of reach of any one nation. While Osborne’s changes may serve to “clean up” his particular “neck of the woods”, it is highly doubtful that his actions will have any lasting impact on the forex industry as a whole.

Of additional concern for Osborne is the potential fallout that could occur before key elections in 2015. Were hefty fines to be levied against UK companies in upcoming months, rival parties could accuse him of failing to act responsibly and ensure the validity and legitimacy of one of London’s most dominant industries. It should, ultimately, come as no surprise that these attempts at regulation are now occurring.

A political move, or perhaps an honest attempt at repairing a fractured industry, Osborne is nonetheless making bold moves into a well-established, highly organised industry that has relied upon its decentralized nature to exchange trillions of pounds of currency to companies around the world over the past decade. It will be interesting to see what, if any, “progress” Osborne can make.

Gold Enjoys Reprieve Around $1240

Although gold prices have fluctuated significantly over the past week, a small margin of confidence has been restored following the stability that this precious metal seems to exhibiting. Falling sharply from a well-established $1275, gold reached a four-month low near $1240, a move which, for many, was as disappointing as it was financially painful. That being said, it seems that this particular price point may signal the full extent of the ‘damage’, as further losses have not been seen. Given the relative stable nature of the precious metals marketplace, significant fluctuations in gold price are bound to quickly draw attention.

That being said, this new pricing base is markedly lower than the recent high of $1315. Although many believed that market volatility around gold was largely reducing, the fast drop to $1240 has caused some to rethink their original predictions and quickly adopt new tactics in this particular niche of the precious metals marketplace.

The price of gold is, essentially, determined by a variety of factors. The health of national currencies is one of the most significantly influential forces when assessing the overall strength of a commodity. With this in mind, it becomes much easier to understand the relationships between the price of gold and the economic health of the world’s prominent economies during the 2008 financial crisis: as markets plummeted, the price of gold soared. Gold is, due to this ‘sovereignty’ often thought of as a “safe haven” during periods of economic turmoil.

With a number of important policy decisions soon to be announced, including the ECB’s potential disclosure of new policy options and the U.S. non-farm payrolls data, gold traders are waiting with somewhat bated breath to see what exactly may happen to the price of gold in the coming weeks. Were the ECB to announce new, looser regulations, many believe that the price of gold would inevitably rise. That being said, the loss of value in the Euro may also serve as a prominent factor in assessing the value of gold in the coming weeks. Volatility, it seems, may be returning to the precious metals marketplace after all.

GBP EUR USD AUD Foreign Exchange Rate Forecasts & Predictions June 2014

The world of foreign exchange (forex) trading is arguably one of the most complex and nuanced financial marketplaces on the planet. Featuring an array of finely tuned pricing mechanisms and intricate arrangements, the process by which currencies lose or gain value relative to one another has become a trillion dollar industry.

Market analysts have released their exchange rate predictions for the month of June, and their assertions seem to coincide directly with recent announcements in key nations around the world.

The British Pound Sterling has made further gains, expanding its competitive edge on international currencies due in large part to recent announcements that manufacturing data has demonstrated healthy growth. Although the Bank of England’s recent statements on monetary policy are causing some to worry that the price rally being experienced by the Pound Sterling is only temporary, analysts are recommended a neutral to positive outlook on this particular currency.

Similar successes cannot be claimed by the Euro Dollar, which has suffered slightly due to recent revelations that the ECB might continue to reduce interest rates, further driving down the value of this already beleaguered currency. Combined with disappointing manufacturing news, the Euro is believed to currently be in a period of decline. Analysts have adopted a negative outlook on this particular currency.

The US Dollar’s positive manufacturing reports will most likely keep this currency within previously established ranges compared to the Pound Sterling. That being said, the recent Michigan sentiment index is largely negative, potentially undercutting any positive outlook nurtured by the overall manufacturing report. Analysts currently believe that the US Dollar sits at a neutral to positive outlook.

The Australian Dollar has been impaired slightly by recent reports illustrating weak domestic building numbers. Because of this, it is unlikely that the Reserve Bank of Australia will move to strengthen the national currency using an interest rate hike. According to analysts, the Australian dollar currently sits at a neutral to negative outlook.

Overall, the assertion could be made that the “threat” of volatility in the forex marketplace will be greatly enhanced or reduced by policies currently being decided upon in Europe and Australia. That being said, many of the world’s major currencies stand to benefit from any sign of weakness in these aforementioned economies.

Foreign Exchange Latest – Dollar gains as GBP nears 9-month lows

Although tensions remain high in the Middle East and Ukraine, the US Dollar is slowly pushing back, regaining critical lost ground against the British Sterling and Euro Dollar. Although a variety of 2014 peaks have already been met and exceeded, many experts are in agreement that the US Dollar will need a fresh and compelling impetus to continue its ascent. That being said, an increased in value of USD may comes as a result of international pressure on the EU as opposed to substantive gains on a domestic level.

The US is currently enmeshed in a variety of international conflicts that are causing many to re-assess their investments in the national currency. As Iraq continues to slip further into conflict and the ISIS militant group increases their volume of highly visible, violent demonstrations, many are left wondering what the full extent of US involvement in this conflict will be.

Meanwhile, the ongoing drama between Russia and the Ukraine is producing worldwide hesitation and fear, particularly in financial circles. Recent sanctions placed against the Russian nation are expected to result in an increase in pressure on the Euro Dollar, which, until recently, has been trading at nine-month lows. Although the EU has officially emerged from the devastating recession of recent years, the economic landscape of this region remains quite fragile. Whether or not the EU will be able to reassert their validity in the FX exchanges in the upcoming days and weeks has yet to be seen. Were the conflict between Russia and Ukraine to continue to escalate, it is highly likely that the EU Dollar will experience large price swings.

The GBP has also been experiencing its fair share of suffering, due largely to its association with the EU. For US travelers, this couldn’t come at a better time, as trips abroad will prove to be much more affordable than they would have been otherwise due to a strong US dollar.

As is common with FX trading, the volatile combination of international events taking place on a regular basis can quickly destabilize and reshape short-term expectations. Depending upon upcoming actions taken by the US Government, many believe that the US dollar is poised for increased volatility.

“To say FX Volatility is Low is an Understatement”

to put the current “tranquil” state of the FX markets in context, it’s necessary to look back in history…way back. The stability of the US Dollar against the Japanese Yen that is being observed in FX exchanges today has not been seen since 1977. Using a variety of proxy modelling techniques, it could also be stated that the Euro Dollar has not been this tame since 1979.

Although many would view these observations as simply part of a larger pattern occurring in the international economy, the actual data points to something else entirely. According to George Saravelos, a currencies analyst at Deutsche Bank, “The decline in currency volatility is unusual compared to other asset classes.”

So, what could be the cause of this unique situation? Analysts agree that current economic conditions would not promote this level of stability. In fact, both the S&P 500 and 10-year US Bonds are experiencing over a 1% increase in volatility when compared to levels witnessed in the early 1990’s. Following the “taper tantrum” that occurred last summer, as well as a variety of unexpected policy surprises coming from the ECB, it seemed reasonable to assume that volatility would shake up for the FX markets for a reasonable amount of time.

One possible explanation for the placid nature of the currency markets could be a shrinking gap between buy and sell prices due to increasing competition and ever more powerful FX trading technology. This year alone, the buy and sell spread for FX exchanges at large was reduced by 20%. As automation and complex algorithms take over the marketplace, some say, it is inevitable that stability will slowly embed itself within the infrastructure of the FX markets.

Another possible theory points to the growing shift towards electronic trading platforms as opposed to traditional inter-bank voice trading. This shift is not just relegated to the FX markets. Following recent changes outlined by Dodd-Frank, many of the asset classes within the US fixed income market are also being transformed and revolutionized by electronic trading systems.

FX traders shouldn’t be overly worried that the glory days of foreign exchange are over. That being said, some experts are saying that the highs experienced earlier this year may not return for quite a while. According to Saravelos, this unheard of stability, “is also a warning shot on the impact that technology and regulation can have on other asset classes as competition and the market mature.”

Global Concerns Eased Surrounding AUD/USD

It’s common knowledge that the volatile dynamics of international politics and conflicts have serious repercussions on the FX markets. In recent months, the upsurge in geopolitical tension between Russia and the Ukraine, as well as US military intervention in Iraq against the ISIS militant group, have resulted in a series of substantial price swings of the US dollar, the EU Dollar and the GBP. The EU Dollar recently retreated to a nine-month low, due largely to its inability to withstand investor scrutiny in light of Russia’s aggressive moves. As could be expected, the GBP shed value in tandem with the EU Dollar.

Optimism, however, isn’t far off. Although the US Dollar declined in value following the initiation of airstrikes in Iraq, prices have not been significantly affected. A recent, temporary ceasefire between Hamas and Israel has also helped provide a small level of comfort and reassurance for those assessing their positions in the US Dollar.

That being said, tensions have yet to fully abate in Easter Europe, where the Russian military remains poised to launch a series of devastating strikes against Ukraine. The sanctions levied against Russia have served as a moderately effective deterrent against Putin’s militaristic endeavours, although no formal withdrawal has occurred as of yet. Although Russian governmental representatives have declared that the military exercises they had undertaken near the border with Ukraine were now over, investors remain somewhat cautious.

The Australian Dollar recently dropped to two-month lows against the US Dollar. This decline is largely due to statements by the Reserve Bank of Australia declaring its intentions to cut growth and inflation forecasts while, simultaneously, keeping interest rates stationary.

As is becoming increasingly common, however, even the most informed of predictions can change substantially when global dynamics are as volatile as they currently are. Although the recent Ebola outbreak has yet to produce any substantial head-waves in the FX markets, any indications that the deadly virus had established its presence in Europe may also exacerbate existing volatility. Yet again, only time will tell if such issues will transform into pressing concerns requiring immediate attention.

It is likely that the vast majority of international investors will remain intently focused on current events until these substantial global conflicts reach some level of long-term resolution.

Banks Set Aside Billions of Pounds for Forex-Rigging Fines

If future preparations can serve as any indication of former crimes, Barclays recent fund allocations may provide enough proof for skeptics who have been convinced “from the beginning” that UK’s banks, as well as those in other countries around the world, have been engaging in illegal activities within the Forex markets. Currently, Barclays has allocated nearly £500m in order to ensure that any costs or fines incurred in the ongoing investigation regarding forex riggings are fully covered.

Barclays is no stranger to controversy. In 2012, the bank was fined approximately £290m for manipulating Libor, a scandal that pales in comparison to the penalties which may be sustained in upcoming months. Currently, the Financial Conduct Authority is attempting to reach a settlement with six major banking establishments regarding illegal activities in the Forex marketplace, a trading arena that involves over £3.5tn in transactions each and every day.

It is expected that the Financial Conduct Authority will release information regarding their regulatory actions next month. Experts agree that it is quite likely that the FCA will include an exhaustive collection of e-mails and e-chats, all of which point strongly to interest-rate fixing in forex markets among traders with Barclays.

Unfortunately, Barclays continues to soil its reputation with scandals such as this. Shares in Barclays continue to fall as an ever-increasing series of controversies continue to mount. In the third quarter of this year, Barclays’ profits have fallen by nearly £200m when compared to a year ago this time. Almost 8,000 jobs have also disappeared over the course of the last year. That being said, over the course of the past nine months, overall profits for Barclays have risen by approximately 5%.

Although Barclays is currently suffering heavily from some of the costliest scandals the bank has ever experienced, bank leaders have already stated that the bank will continue to pay its 1p quarterly dividend as promised. Whether or not the bank will be able to salvage its reputation after these issues, however, is another matter entirely. More information about this scandal will be available in the following weeks, following pending announcements from the Financial Conduct Authority and Barclays’ leadership.

Forex – Pound Sterling Near 1-Year Lows

Forex traders may be in for a somewhat bumpy ride in upcoming months, as the Pound Sterling has fallen to a near one-year low following news that the UK’s economic growth may be slowing. Recent government reports have shown that the UK’s service sector is expanding at the slowest rate seen in the last 17 months.

Although such news may initially appear to be somewhat grim, business optimism has not fallen as much as may be expected. In fact, the vast majority of firms in London’s financial sector continued hiring staff. These disappointing figures are also serving as a strong prediction that the Bank of England will, at least for the time being, keep interest rates at their current levels in an effort to promote economic stability. From the perspective of GDP, the UK experienced .7% growth in the third quarter of this year, while a .5% expansion is considered the likely outcome of fourth quarter activity.

The rise in the value of the US dollar is not only the byproduct of economic weakness in Europe. The now exclusively Republican-controlled House and Senate are considered to be a huge show of support for the US dollar. Government gridlock has, historically, contributed to currency weakness. Fortunately, the United States no longer has to suffer through the degree of turmoil that had embroiled their government over the last two years.

Investors are currently awaiting the outcome of a European Central Bank meeting that is occurring on the heels of a surprise stimulus move by the Japanese government. Many industry analysts are now predicting that the ECB will engage in a similar strategy, injecting much-needed funds into the Euro zone.

Related data points regarding the economic health of the Eurozone continue to be somewhat disappointing. Retail sales have dropped 1.3% on the monthly charts, which exceeded predictions for a .8% overall decline. Whether or not these factors will strongly influence the value of Pound Sterling remains to be seen. If the ECB were to intercede, it is likely that currency value fluctuations would follow suit. It will be interesting to observe exactly how these scenarios play out in the final month of 2014, and what expectations are established for the opening months of 2015.

Forex Trading for Beginners: Advice from the Experts

The world of foreign exchange holds a special appeal for many novice traders, due in large part to the fact that these markets function in a manner that is entirely unique within the finance industry at large. With less regulation than the traditional securities exchanges, near round-the-clock trading and the ability to acquire (and lose) large sums of money quickly due to leveraging, it should come as no surprise that foreign exchange attracts countless “newbies” on a daily base, many of whom are looking for a quick and effective way to make substantial profits in this dynamic marketplace.

Unfortunately, the world of foreign exchange trading is not an easy nut to crack. In fact, the Forex markets are widely considered to be some of the most sophisticated and, yes, confusing within the financial markets as a whole. There’s no reason to avoid jumping into these markets, however, as a slow, patient introduction to the in’s and outs of these markets may allow traders to adopt a more responsible approach to forex trading which helps to ensure that they won’t break the bank on their first outings.

Experts agree that one of the best tools for novice traders are the Forex simulators that can be found on virtually every major trading platform in existence today. Using these simulators, individuals can test out their specific trading strategies without having to place real money on the line. While these simulators can’t account for trading strategies fueled by fear, greed, superstition and any one of countless other human emotions, they do allow for smart practice and critical observations of how these markets function.

Due to the fact that these markets do behave in a rather volatile fashion, expert traders commonly advice novices to adhere closely to what is commonly coined the “golden trading rules”, which include discipline, patience and money management. As stated previously, the Forex markets often involve substantial leverage, which can prove to be disastrous for those who aren’t completely sure of what they are doing. There are countless stories of individuals who have gotten overly eager in their early days of trading and lost tremendous sums of money due to faulty trading strategies and an overly zealous approach to leverage.

More than anything, the most important tool for any novice trader who is serious about finding their way into the forex markets is extensive practice. The only way to understand the nuances of these markets is to observe how they react to varying international situations.

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