Garlic Attractive to Speculators

To some, it is nothing more than a strong-smelling vegetable that is best avoided before an important date or meeting.  To others it is an essential cooking ingredient.  To many, it is now an interesting investment opportunity: Garlic.

Yes, garlic has increased in value up to 40-fold in China, where the largest proportion of the world’s garlic is produced.  No-one is quite sure what the exact reason for the sudden boom is – it has risen sharply since March – but there are a few reasons possible:

- Garlic is viewed as an important health-giving ingredient in China.  Many believe it could ward off swine flu and are therefore stockpiling it

- Producers planted less crops this year in anticipation of the great recession.  Meanwhile, banks pumped the economy with extra cash.  Along came speculators who bought great quantities of the vegetable before it had ripened, in anticipation of a growth in demand.

So, if you are thinking of entering the CFD derivatives or commodity trading market, why not consider garlic?

GDP revised Upwards

GDP, the Pound is up…but not quite as much as they’d hoped and well it wasn’t that great but still a gain is always good.

This seems to be the general feeling coming from the foreign exchange market about yesterday’s revised UK GDP numbers for the third quarter.  They did go up – but to the forecast of -0.3 per cent.  Many had hoped that the revision would show much better growth – in the Middle East, investors had been pushing the pound up and up thanks to their hope for better results.

One foreign exchange insider even said “the figures aren’t great…we are waiting for third quarter GDP to get better” – they may be waiting a while.

The pound therefore had its winning streak dampened slightly.  Gaining against the US dollar is not the hardest task for a currency at the moment.  The dollar saw its lowest level for the year yesterday and overall sentiment around it is lower than ever.

Traders Look to the Shape of Recovery

The British economy has so far had 200 billion pounds into it through the Bank of England’s quantitative easing (QE) programme.

Investment traders are now speculating as to the next phase for the economy – when QE comes to a close and interest rates begin to rise again, due to happen next year.  Many wonder how the nation will cope without the large scale support system its economy has had in place – far more aggressive than those in its European counterparts and in the USA.

The Bank itself is predicting one of the strongest recoveries ever seen in Britain.  Futures traders, market analysts, foreign exchange experts and City bodies are all divided in their outlook.

Gold up to New Record Price

The upward rise of Gold continues – this morning it rose by $15 to over $1,167 an ounce – a new record for the precious metal.  Here are three reasons why:

- the continuing weakness of the US dollar pushes investors to Gold

- Growing demand from China and other Asian nations

- good sentiment for Gold in general

It is widely expected by market experts that the metal will reach $1,200 and beyond in the near future.  Other metals also rose in early trading in London this morning.  Look out commodity investors!

The continuing speculation over the central US interest rate is keeping the dollar low – it is expected that it will be kept low for some time.

Investor Confidence Low around the Pound

The British pound has hit its one-week low against the US dolllar, falling by 0.4 per cent in early trading this morning.

Foreign exchange investors are shying away from the pound as its struggles amidst poor economic data from the UK – public debts have been announced, showing a sharp increase. Investor confidence in the British economy is certainly at a tough junction – overall economists predict that the pound will continue to struggle for now.

Over in Japan, the government has announced that the economy is in a state of deflation – the first time such an announcement has been made since 2006.  The Bank of Japan decided to keep the central interest rate there at its low of 0.1 per cent.

Inflation Rises

UK households are gearing up for another tough period as inflation rises again.  The Office for National Statistics has released its latest figures, showing that the CPI (Consumer Prices Index) has risen by 1.5 per cent in the year to October.

Higher fuel costs have been seen as a key factor in the inflation level – compared with this time last year, the price of commodities like oil are quite different.

The Bank of England uses the CPI as its target index, and the high inflation rate is now making many analysts wonder whether now might be a good time to slow the current QE programme.  Others argue that halting the cash-injection-scheme could put the economy’s recovery into serious jeopardy.

The sterling rose by around 0.6 per cent against the euro and advanced against the US dollar on the news, as many investors headed back to the pound.  They wonder whether the central interest rate may be raised on the inflation threat.

Payday Loans Online

Payday loans – would you apply for one?  If you are one of thousands of UK people who are considering one of these fast cash loans, you might be concerned about how safe it is to apply online.

The things to remember are that -

• Payday loan lenders take personal security very seriously – if they didn’t, they wouldn’t do very much business
• Payday loan lenders generally have tight Policies in place to protect your data
• You can check this easily on their websites or request personally
• Payday loan lenders would probably face criminal charges if they were negligent

Still concerned?  You needn’t be; but having a good read of the lender’s (or broker’s) Privacy Policy and Terms should set your mind at ease.  Before you go ahead and apply though, make sure you fit the bill – are you over 18 and a full UK resident?  Do you have regular income?  Can you afford to pay the loan back?

 

 

 

Europe Emerges

The Eurozone has left the recession if latest figures are anything to go by.  As usual, there were mixed opinions over the level of recovery, what had been hoped for and what it all really means.

First, there were the analysts who said that the results were worse than expected: the entire Eurozone (plus countries which don’t use the Euro like Britain and Sweden) reported a total growth of 0.2 per cent.

Next were those that said that growth (and therefore recession-exiting) was occurring earlier than expected.

Finally, there were the analysts who reiterated the question – why is the UK having so much more trouble than the rest the large European economies?  Why are UK consumers so much more sluggish than their German counterparts at returning to the shops?  The answer lies in Britain’s credit issues and the size of its financial sector which left the country far more exposed to crash than France or Germany

Festive Shopping Season

Christmas – it has hit us already thanks to the adverts, lights and shop promotions.  Those that love the festive season are gearing up for mulled wine and mince pies – those that are less keen will be rolling their eyes…surely it isn’t that time already?

Well, in 42 days to be precise  – so that’s about a month left to get all the shopping done: presents, food and various drinks all need to be stocked up on.  Whether you are a die-hard turkey fan or into a more unusual roast such as pheasant, there is much to plan!

Not surprisingly, consumers will be relying on their plastic to see them through the shopping hit.  But all card users – be it credit cards or debit cards – must remain vigilent as fraud criminals will be on the prowl too.

The Financial Services Authority has recently enforced new regulations stemming from the formerly voluntary Banking Code.  This has changed a few of the ways in which card users and providers deal with fraud.  Card holders are now able to ask the bank exactly why they have refused a fraud claim – make sure you know your rights!

Budget Deficit means Possible Downgrade for UK

Britain’s Government has faced embarrassment once again.  This time, the country stands at risk of losing its AAA sovereign rating from rating agency Fitch.

Earlier this year in May, another of the main agencies, Standard & Poor’s, changed the UK’s status from “stable” to “negative”.  This was already a blow to the country but losing an A would mean bad news overall.

Currently, Britain is the only of the AAA economies which faces a downgrade – Ireland and Spain were lowered earlier in 2009.  The main reason for Britain’s poor reputation is thanks to the soaring budget deficit, set to reach close to 13 per cent of GDP in the coming months.  Rating agencies want to be sure that the country’s deficit will be brought to balance within 5 years – something which is not so certain at the moment.

The pound, which had been enjoying a relatively good stance against the weak  US dollar, tumbled on the Fitch warning but rallied later when PM Gordon Brown reiterated that the Government will make efforts to improve the situation.

Forex Demo Accounts

Prospective forex traders!

By now you probably know a bit (or a lot) about how the FX market works – it’s ‘decentralised’ nature and the many platforms to choose from.  But don’t forget that aside from the many complex factors affecting the market itself, each platform works in varying ways and degrees.

Therfore, it is key that you consider downloading the free demo accounts offered by most good forex dealers.  These usually last around two weeks and allow you to test the way in which that platform and software works.

Once you have tested a fair amount of platforms you may find you prefer one above the others – now you could be ready to use real money to trade!

Shares, Gold Up and Unemployment stagnant

The FTSE 100 and mining stocks were up this morning as the price of gold reached over $1,000.  This was mainly due to a weaker US dollar which enticed investors to gold as an alternative asset.

Meanwhile the unemployment situation in the UK is not likely to improve much in the remaining months of 2009.  Employers are largely expected to continue job cuts but overall the trend is slowing down.  Will the unemployment situation slow down enough to prevent it from reaching 3 million?

Over in the G20, it is said that nations are divided as to their recession-tackling tactics.  The official G20 statement runs as follows:  “The recovery is uneven and remains dependent on policy support, and high unemployment is a major concern.  To restore the global economy and financial system to health, we agreed to maintain support for the recovery until it is assured.”  But within the meetings, it is said that cracks are beginning to show as to the right way to solve the many issues.

US Hedge Fund: 20 Arrested for Insider Trading

Before you get involved in a hedge fund or any kind of fund and place your investments in the hands of a fund manager – make sure you understand what you are getting involved in.

This golden rule can always be applied but unfortunately crime does penetrate the investment world – and the latest case is one that reads like a crime thriller novel.  Galleon Group, a large hedge fund based in the US, is at the centre of a huge criminal case of insider trading.

The Group’s founder Mr Rajaratnam, born in Sri Lanka, is at the core of the case though denies wrongdoing.  The total of illegally-gained profits currently stands at around $50 million dollars and involves mangers, lawyers, traders and executives from all around the US.

Around 20 people have been charged in the case and Mr Rajaratnam is on $100 million bail.

Gold to Record High

The foreign exchange market is set for a shift …. the IMF is preparing to sell off around 400 tonnes of its gold reserves in a bid to boost the market and aid developing nations.  India’s central bank has already announced that it will buy around 200 tonnes for a cool $6.7 billion.

The news has caused the price of an ounce of gold to reach record highs at $1.092.60 an ounce.  It is widely expected that the price could reach $1,100 in the coming months.

China is the country tipped to be the purchaser of the remaining 200 or so tonnes from the IMF – it already holds some the world’s largest gold reserves at 1,054 tonnes worth around $40 billion.

The UK holds just 310 tonnes after around a half of the total reserves were sold off in the 1990s – when the price of an ounce was around a quarter of today’s price.

US dollar drops and European Shares too

The foreign exchange market is waiting for the US Federal Reserve’s latest decision on the US interest rates.  It is expected that they will keep them near zero, where they have been for about a year.  So far the Fed has indicated that it has no intention of raising the rate despite the fact that the US economy is clearly recovering from the recession.

In early trading, the US dollar retreated against a basket of currencies.  This is expected to continue and stocks are set to receive a boost.

European shares sank this morning as confidence in the banking sector of Europe is definitely seeing a low point.  European banks have reported more quarterly losses while the UK banking sector is apparently in as bad a state as it was a year ago.  Wholly- and partly-state owned banks are set to receive yet more taxpayer money – to a total that exceeds the amount they received just over a year ago.

 

Forex Market – Always Active

Growing numbers of people are entering the world of trade for investment – whether they choose to invest large or small amounts of capital.  But one thing to bear in mind for all prospective investors is that risk is ever-present.

Forex trading – trading on currencies is one of the best-loved ways to invest.  The foreign exchange market is one of the largest in the world and while the UK resident sleeps, the Australian is wide awake and busy trading – and vice versa.  In other words, the market never sleeps (well, except for Sundays when everyone has a rest).

But there are so many factors affecting the market and currency movements – just think of the size of the world and the amount of events happening every minute…politics, natural disasters, economies, finance, terrorism…all of these affect the value of currencies as traders increase and decrease their interest in a currency.

Risks are ever-present but the wise trader takes steps to lower these including by signing up with a good broker (obvious but vital), taking training, practising, research, employing stop losses and so on.

USA back to Growth

The US economy is, as predicted, back to growth.  In the latest published quarterly results, the GDP there grew an annualised 3.5 per cent.  This growth was better than expected and share markets reacted well – both the Dow Jones and FTSE 100 jumped up.

The USA has had a rollercoaster year – the first quarter GDP sharply contracing by a whopping 6.4 per cent, while unemployment rose and consumers panicked about the steady decline.

Now things are heading back to better times and President Obama says that the “recession is abating”.

 

 

Is your Credit File correct?

We might see them as mysterious institutions that hold key information on our financial past, present and possibly future…credit reference agencies are becoming ever stronger as lending criteria in the UK tightens.

Many people have been turned down for a loan but there are ways to improve your rating – aside from being a good boy/girl with your borrowing habits.  You can view your report and check that it is correct.

A growing number of people are finding that their report is filled with inaccuracies such as age-old address details, unpaid debts which have long been paid and so on.  Therefore, it is crucial to make sure your file is up to date – as it has also been complained that the agencies can take a long time to correct mistakes.

 

Tougher Credit Card Rules

Credit card companies are in the firing line from the government and consumer watchdogs.  A new set of proposals is set to be assessed which would change some of the ways in which credit card companies operate.

For instance, they may be forced to inform customers clearly of any interest rate changes and may not be allowed to change an existing cardholder’s credit limit without consent from the cardholder.

Overall, it is felt that card customers are being unfairly treated with confusing information and a lack of clarity.  Many card customers end up spending decades just paying off their card.

Euro up but not to Monday’s Highs

The US dollar has retreated a bit against the Euro after the Euro experienced 14-month highs on Monday at over $1.50.

It is widely expected within the forex markets that the dollar is poised for a stronger period after a sustained period of weakness.  However, no-one seems to know what exactly the catalyst will be for the foreign exchange market!

Some say that the data release later this week in the USA – of third quarter results, expected to signal the end of recession in the US – will provide a boost for the currency.

The Euro is now hovering around $1.48.