Euro Gains On U.S. Dollar as China Soothes EU Holdings Fears

After China denied it was going to divest of its huge holdings in the euro, the euro had a rare day in making gains against the U.S. dollar, at least in the recent weeks.

The U.S. dollar skyrocketed when news China was going to take measures to shrink its exposure to European debt. Once the reports were denied, the dollar went backwards while euro rebounded.

Currencies have been fluctuating wildly on the forex recently, and every bit of news related to the sovereign debt crisis in Europe moves them up and down, depending on what is the flavor of the hour.

Currency traders of course love this; at least those that know what they're doing, as volatility is the friend of the expert, and that's when they make the most money in their currency bets.

The story of the Forex is the euro, and the story of the euro is the sovereign debt crisis. As the sovereign debt crisis goes, so will go the euro, U.S. dollar and the yen.

The U.S. dollar and the yen are joined to the action because they are the currencies of choice investors go to when fears pervade the markets.

Gold is a wiser choice, but some, unbelievably, haven't caught on to that yet.

Other currencies play a part of course, but these three will always be in the euro and EU debt crisis story as it continues to unfold, along with gold, which a growing number of investors are treating like an alternative currency.

US Dollar Mixed Against Currencies

US Dollar Mixed

The U.S. dollar today was mixed and without much movement, as relatively little news of significance emerged to effect the greenback.

Other currencies were similar, other than the British pound which continues to be hammered by the numerous events and pressures it's undergoing.

Neither currency is particularly appetizing at this time, neither will the be over the long term.

The U.S. dollar seems to have a chance to strengthen based on perhaps nothing else than contrarian investing, as most people have been dollar bears for a long time, and little positive is leaking out about the currency.

US Dollar Mixed

Jim Rogers: Dollar Collapse Long-term

Most people that understand the cause and effect of the disastrous policies of the Obama administration and how it will continue to damage the U.S. dollar, are rightly very pessimistic about its long term future.

But because people run in packs and follow the crowd, and most at this time see the U.S. dollar as a disaster, over the short term it wouldn't be a surprise to see it rally, and Jim Rogers concurs with that assessment, saying many investors have sold the dollar short, so that could result in a short term rally, which while not being a true measure of the U.S. dollar strength, would benefit those on the right side of the trade.

Even so, over the long term Jim Rogers continues to believe the U.S. dollar will remain a disaster and will continue to collapse.

Long term there is no doubt about the U.S. dollar continuing to lose its value. But there will be times when the dollar will temporarily shoot up in response to the ongoing negative feeling toward it, so it's something to keep in mind when making your plays on the dollar.

Investing in ETFs to Take Advantage of Weak US Dollar

With the U.S. dollar continuing to collapse in value, one way to play that ongoing trend would be to invest in an Exchange-traded fund which provides you targeted exposure to foreign currencies.

Foreign exchange trading is nothing more or less than investiing in one currency versus another. Do your homework, find solid currency performers against the U.S. dollar, and invest in an ETF that caters to those circumstances and currencies.

One thing to understand about currencies in general; when one is going up another is coming down, and the U.S. dollar will be coming down for some time to come, so it'll be a good play for quite a while when choosing the opposite currencies correctly.

U.S. Dollar and FOREX in 2009

This year promises to be a very interesting year for the FOREX in connection with the U.S. dollar, as everyone is expecting the collapse of the dollar, but the obvious question is when that process begins, and which currency will exploit that weakness, to the benefit of those participating in foreign currency trading. Now that online currency trading has made it so much easier to trade the U.S. dollar against other currencies, many more traders are doing their forex trading online, making it a very busy business, even more thant currency trading of the past. As far as the forex goes in 2009, it promises to be a wild year this year, and there are probably a lot of opportunities to make a lot of money on the coming collapse of the U.S. dollar if we're patient and willing to wait. Eventually we'll benefit from the fall of the U.S. dollar and U.S. Treasury bond market if we watch things closely and enter the foreign exchange in a timely manner.

2009 should be a good year to put our money in the forex, and the online forex should help those of you who are looking to move in and out of the market with little difficulty, by using the software offered by a number of online forex trading companies.

We may see more currency fluctuation this year on the forex market, and so while their could be more risk, there'll also be more reward for those trading the dollar on the forex. If you're not too familiar with currency trading, the forex market, or even online forex trading, you should probably get yourself a good commodities broker while you learn about forex trading strategy and how to even trade currency in the forex market.

To me, the greatest thing to know this year for trading foreign currency, is simply watching how the currencies interact with the U.S. dollar, and simply watch and wait until the downward trend of the dollar begins. We're probably already at the beginning stage of this, so getting familiar with the forex exchange or if you know what you're doing, getting ready for your 2009 currency trading, because it's going to be a whoper this year, and a lot of money will be lost and made by trading the forex.

Other than tracking the strength of the U.S. dollar, also watching the interest rates other nations set for their currency will partly determine how they may fall or rise against the dollar, and currencies will respond strongly to what nations determine there. Build your forex trading strategy aroudn that this year, as it simplifies things, and unless you're completely in the forex market, and immersed in how it operates, that should be the determining factors going forward for investing in currencies via currency trading.

You can of course trade outside the U.S. dollar as coupled with other currencies, but even if you have knowledge of other currencies and their strengths or weaknesses against one another, the U.S. dollar, for now, will continue to have an impact on currency trading, whether its online currency trading or directly through a commodities broker. So trading the forex doesn't have to be complicated, but you do have to keep up with trends and the general economic and financial states of the nations' currency you're looking to invest in. How they specifically relate to the dollar in that context is the key to foreign currency trading.

If you're comfortable with it, I would definitely look at the way you can formulate an online currency trading strategy on the forex market. Forex trading online is pretty simple, fast, and you can get immediate feedback on the market and currency you're trading in, and many times you can get a dummy account to trade the forex and practice before committing your cash to it. I've seen a number of these online forex software programs and websites, and many of them do a great job. You do have to watch to make sure you close you online forex trades, as forex trading online doesn't ensure those things, and you could make a trade thinking you've locked in profits, and then forgot to close it with the software. Trading the forex online means you're dealing with something mechanical and not human, so you've got to realize it's dumb, and online currency trading can be risky if you forget the proper steps to take that you would otherwise simply tell a currency broker to do. The best thing in that case for forex trading online is to make a cheat sheet list and have it right beside your computer. Once you learn the process of online forex currency trading, you can then put them in a list and just follow it step by step as you make the proper currency trade inputs on your computer.

This year, in spite of the economic turndown, promises to be exciting, and as gold and silver start to move upward, and the U.S. dollar starts to collapse along with U.S Treasurey bonds, we'll see all sorts of opportunities to partcipate in foreign exchange trading. The forex and the dollar will do a lot of business this year, and we need to get a basket of currencies to watch as the story of the collapse of the U.S. dollar unfolds, and we are ready with a forex exchange trading strategy that can be very profitable for us in 2009.

U.S. Dollar Continues as Safe-Haven Choice

With many gold funds needing cash, along with ongoing deleveraging, the U.S. dollar continues to be the refuge of choice for many jittery investors.

With the dollar and the yen basically mirroring the movement of the equities market, they have been the cheif beneficiaries of current market conditions.

The yen is still playing its customary role of measuring risk, and the dollar is moving pretty closely in step, playing a similar role as well.

For the yen, when stocks strengthen - investors sell, when stocks plummet, they're quickly buying the Japanese currency.

The yen continues to be pressured because risk-adverse investors are abandoning carry trades at this time; that has helped the U.S. dollar hold its strength. It'll continue to be difficult to guage risk while the market seesaws back and forth.

Those currencies which will be most negatively impacted by the continuing strength of the dollar will be the British pound and euro.

How Long Can U.S. Dollar Resurgence Last?

Some people have been caught off guard by the continuing strength of the U.S. dollar, as most that understand the source of its weakness have predicted its continual plunge, especially after the trillions in obligations the U.S. government has committed itself to recently.

A couple of major factors have been responsible for its current strength, although it's only a matter of time before the piper will have to be paid.

One major reason for retaining its strength has been the countries that had lagged behind the U.S. in economic disaster have now come around full circle and are beginning to participate in the global economic tsunami. That has made some other currencies struggle as well.

This week the International Monetary Fund (IMF) said the economies of the UK and Europe will sputter during 2009, along with the U.S.

The other key to a stronger dollar has been investors deleveraging the investments in dollar-denominated commodities, as well as dollars being sold to acquire stocks. Related to this is institutional investors ridding their funds of positions in emerging markets. This has been going on since about the middle of September.

Investors are now in the position of having to buy U.S. dollars so they can unwind those trades.

All of this is simply suspending the day of reckoning for the dollar. The question isn't whether it will happen, the question is when and how deep the shattering of the greenback will go.

Nothing has really changed in the positive for the dollar since its 6-year decline began against its major trading partners. Only lagging behind the economic disaster in America, and now fully partaking in it, has saved the dollar as its trading partners struggle.

Once this changes and demand for goods and services begin to rise again, all bets are off as to how the dollar will respond. The bursting of the commodities bubble is only temporary, as nations will once again start building and need a variety of goods to grow their economies. At that time we'll begin to learn how deep the disease of the troubled U.S. dollar will really be.

Great Advice For New Forex Traders

I wanted to take the time to share some great advice for new forex traders. This can be quite an intimidating market to get into. I know when I first heard there was three trillion dollars moving around each day, and huge banks were going to compete along side me, I was very intimidated. Don't be. You're really not competing against anyone. Most traders are willing to share with each other because we are all looking to ride the waves of the market and profit. I'm going to share a little with you that should help you out.

News is a pivotal source of forex information, it just isn't directed to forex traders. You'll never hear something directly informative to a trader, but you will hear the information that inevitably gets the market moving in new directions; the economy. Economic news is the stuff that causes currencies to rise and fall, so it is important to make sure you're on top of that. Good news, is good for currency and bad news is bad for currency.


You need to keep your trading strategy very simple. The people that end up losing in this game are the ones that have these very long strung out strategies that are very conflicting and hard to understand. There is no need to reinvent the wheel here. There are a very simple strategies you can follow everyday and make a profit.

You also need to learn to be a logical creature. Emotion in this business can be deadly because it makes you make bad trades, it makes you hold onto unprofitable currency and in the long run leads you into the red. Being logical makes you a cold calculated machine that makes trades on one characteristic, profit.

Lastly, get yourself automated software like Forex Killer. It saves you a lot of time and headaches since it will go through the avalanche of currency data and search for profitable trends that you can use to your advantage.

By: Charley Nash

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