Euro

The forex rates euro returned to the $1.3400 area but the indications are that the downward move is likely to continue to even lower levels with the first target to be at $1.2970 or even lower.

Dollar

The forex trading prices of the dollar have formed a strong rise against the forex trading prices of the euro, benefiting from the weakness of the stocks and precious metals, thus managing to recover against major currencies. The shift of investors to going long in dollars is clear while the decline that was recorded in recent days didn’t produce any concerns to investors and was used as an opportunity for new market positions. Also a possible risk aversion on the markets and a possible corrective movement of stock indices and commodities after yesterday’s signs of reversal would also acted positively on the dollar since the capital from the close out positions would return again to dollars.

Oil Trading

The rising price of oil found strong resistance at $90,50-00 dollars and led intense pressures therefore the oil closed at $88.25. Increased volatility may be due to the announcement of the U.S. reserves. In medium term, however, the trend is upward and is still unaffected.

Gold Trading

At $1401 closed Gold yesterday after the new record high of $1431 which was recorded. The strong fluctuations, especially downwards, is normal in such bull markets and may cause losses on short-term strategies.

Silver Trading

Silver continues to record impressive growth as it is negotiating at a new record high of $29.80. The trend is strongly upward in each time horizon and the odds are in favor of continuation.

One feature of the market, which needs special attention to its management as it is not easy to crosscheck, is that there are rumors that a large investment bank records significant losses from the sale of the metal and there is the possibility to act on the so-called short covering (ie the closure of loss-making positions) or the actual purchase of physical quantity. Both will have as a result the very large increase of the price of the silver.

We are dealing with the forex trading value of two weak currencies, the Euro with Europe’s problems and debts, and the Dollar with the weak economy and the FED to provide liquidity into the markets in order to stimulate the economic recovery. When the market focuses on the problems of one it automatically strengthens the other. On short term period, Europe’s problems are greater than the problems of United States therefore the pressures on Euro are expected to continue.

Officials of the largest oil-producing nations in the world have repeatedly stressed that the status of the association rate with the dollar is serving their economies, provided that the inflation remains under control. As the major economies of the Gulf are recovering the inflation is increasing. In Saudi Arabia, Kuwait and United Arab Emirates, inflation has soared to an 18-month high, although is still below the record levels of 2008.

“The Gulf countries should maintain the link with the dollar in the near future”, says Robert Mundell, Nobel laureate economist at Columbia University. “The only strong argument for changing the monetary system would be an unstable dollar or the loss of the “validity” as an investment haven”, said Mr. Mundell, who recently took over as director of the Central Bank of the United Arab Emirates.

Some economists have warned that the “package” of quantitative easing measures announced by the Fed could trigger inflation and jeopardize the credibility of the forex trading value of the USD.

However, as long as the weakening dollar is offset by the “shocks” on the Euro and the price of oil (whose value is measured in dollars) it remains a key source of revenue for the Gulf countries. It is also important to note that the rates which are associated with the dollar have also significant political importance to the allies of the United States.

Furthermore, despite the inflationary risks, the “scenarios” for the abrogation of the association in conjunction with a depreciation in the forex charts of the US Dollar may prove detrimental to the Gulf countries which investing much of their foreign reserves in U.S. assets.

“This is the largest-ever agreement that has been achieved”, stated today the Brazilian Minister of Economy, Mantegka Guido, to reporters. According to Petrobras announcement, approximately 3.1 billion barrels reserves will come from Franco oil rig off the coast of Brazil, 600 million barrels of oil well Iara , 467 million barrels of oil well Florim and 428 million barrels from Taupo Northgouest. Additionally, 319 million barrels will come from Guara East and 128 million barrels from Taupo Sula oil rigs.

Mantegka announced the value of the agreement to 42.5 billion dollars which equals to 8.50 dollars a barrel. The value is higher than the estimations of the UBS AG and Frost Investment Advisors analysts who anticipated the price per barrel reserved to $7.50.

We should note here that billionaire George Soros sold during the second quarter all the shares held of Petrobras. BlackRock Inc. and Banco BTG Pactual SA also sold their shares of Petrobras during the previous quarter.

After the announcement for the agreement, company’s shares increased by 97 centavos, or 3.7%, reaching the 27.03 real in the Sao Paulo Stock Exchange(1 Brazilian real = 0.573066 U.S. dollars).
Petrobras, which plans to sale the shares by the end of this month, announced today that the terms of the share offer will be announced on September 3rd. The company plans to issue enough shares to allow both government and other investors to retain their shares. The sale was scheduled for June but it was postponed as both the company and the government were expecting the estimations for the oil reserves by independent agents.

The new way of share exchange is part of the new rules issued last year, by the country’s president Luís Inacio Lula da Silva in order to increase the government control over the company, following the discovery of the biggest oil reserves of the company during the last three decades. Lula asked the calculation of oil reserves by two separate and independent authorities on 19th of August. In June, Petrobras announced that the management of the shares sale will be handled by “Banco Bradesco SA”, “Citigroup Inc.”, “Unibanco Itau Holding SA”, “Bank of America Corp.”, “Morgan Stanley” and “Banco Santander SA” while “Banco do Brasil SA” will manage the sale of shares to the investors in the domestic market.

On August 13th, the financial director of the company, Almira Barbasa said that “the sale of shares is required in order to replenish the capital after the increase in the deficit”. Debt, as shares percentage increased to 34 % in the second quarter from 32% which was in the first quarter and 28% in the corresponding period last year, according to the Petrobras report. The financial credibility ability of the company downgraded to BBB- by S&P, Fitch Ratings Ltd classified it a level higher to BBB while Moody’s Investors Service ranks the company two levels higher at Baa1.

“The big battle to stop the leak and contain the oil is close to an end”, he added. The U.S. president referred also to a survey of scientists which shows that the majority of the oil that leaked out has been severed or removed from the water. The U.S. president also noted that the government will not forgive those responsible for the worst oil spill in history.

Although the U.S. government announced that half the 4.9 million barrels of oil leaked from the oil rig in the Gulf of Mexico in April has disappeared, there remain more than one million barrels which is four times more than the oil slick caused the Exxon Valdez in Alaska back in 1989.

Concerns about long-term effects

The U.S. government is “very optimistic about the fact that now there will be no more oil spills in nature”, said retired Coast Guard Admiral Thant Allen, who oversees the cleaning efforts. From the same step, the director of the White House on energy Carroll Braouner give a warning however that there are still more that must be done to remedy the effects of leakage. The U.S. authorities say they remain concerned regarding the long term effects of oil in the environment, despite the successful sealing of the leakage from BP . She concluded by saying that “The effects of oil pollution on the environment will be visible for many years, perhaps decades”.

According to figures made public Friday, the U.S. consumer confidence fell slightly in March as Americans appear less optimistic about prospects in the labor market. The market will focus later in the figures for industrial production in the U.S. in February, which will provide further evidence for the health of the economy, while Wednesday’s attention will turn to the Federal Reserve statement on interest rates and the path of economic recovery.

Futures

As a new trader it is important to understand that in terms of trading futures describe agreements to buy or sell commodities for delivery in the future based on predetermined rates which in most cases are federally regulated. The majority of trustworthy sites offering forex trade make available future agreements for currency features, stock futures including Nasdaq, Dow Jones and S&P 500 plus plus commodity features including gasoline, oil and natural gas. The total range of offering are best described as forex products or as commodity reading and are all offered for trading 24/5 under the same timetable the online forex market operates. Online traders have the opportunity to benefit from immediate executions desks and in depth live market feeds which will allow users to get an update of the worldwide markets all around the clock. In addition to the benefits of commodity trading online traders have the opportunity to enjoy increased leverage and potentials to trade in long term and short term positions which can prove to be beneficiary for maximizing profit by taking advantage of rising or falling markets.

CFD

The acronym stand out for contract for differences and ranks amongst the top offerings of the online forex market as it enhnaces opportunities for trading of US major corporation stokcs including banking institutions, software providers, telecom providers and electronics providers with absolutely no stamp duties therefore making trades available in an efficient and effective manner. The majority of respected forex brokers offer opportunities for CFD trading with both long term and short term positioning, increased leverage and instant execution cost.

At 10:45 GMT light crude rose 49 cents to $82.60 a barrel. On Wednesday it had strengthened up to $83.03 a barrel the highest since Jan. 11.In London, the price of Brent oil type was modulated at $ 80.76 a barrel, increased by 48 cents. The higher prices also contribute to today’s report by the International Energy Agency (IEA), which has revised its forecast for global oil demand upwards.