Archive for November 2009

Dubai stocks Fall

November 30, 2009

Dubai shares have plunged as a result of fears over the future of the economy there.  Last Wednesday, the large company Dubai World (which is also responsible for the massive island-building project to create a group of islands in the shape of the world) requested for a six-month extension to pay back its $60 billion debts.

Investors around the world reacted with a distinct lack of confidence in the Arab nation.

Dubai has been hit hard by recession – it was once known as a booming centre for commerce and key to the Gulf nations’ success.  Now, it is facing ruin as shares and stocks tumble.

 

Garlic Attractive to Speculators

November 27, 2009

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

November 26, 2009

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

November 24, 2009

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

November 23, 2009

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

November 20, 2009

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

November 18, 2009

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.