Spread Trading

by Roger Wilkison

Football Betting Spread European Union finance ministers are calling for the United States to shore up the sagging dollar by bringing its trade and budget deficits under control.If you would like to receive late breaking news on stocks covered by AXcess News then you need to subscribe. By joining, you can stay ahead of the pack and receive the latest news in your email in-box first.Print This Page

When trading currencies, the trade is always done in pairs – currency Pair. One currency is bought and the other sold. For example, you buy Euros with Dollars, anticipating, the Euro to increase in value relative to the Dollar. If the Euro rises relative to the Dollar, you sell the position and have made a profit. Most Commonly Traded Currencies (the “Majors”):

Commodity Spread Trading Nov 17, 2004 (AXcess News) Brussels - European Union finance ministers are calling for the United States to shore up the sagging dollar by bringing its trade and budget deficits under control. The ministers are worried that, if the European single currency continues to gain against the dollar, the bloc's nascent economic recovery will be thwarted.

The nominal bilateral dollar to euro exchange is the exchange rate that attracts the most attention. Notwithstanding the comparative importance of euro to US dollar bilateral trade links, trade with the UK is, to some extent, more important for the Euro zone than is trade with the US. The dollar and the euro have a strong predisposition to run together in the very short run, but sometimes there can be significant discrepancies. The very strong appreciation of the dollar against the euro in 2003 is one example of these discrepancies.

Nfl Betting Spread The euro, which is shared by 12 EU nations, has risen nearly seven percent against the dollar in the past two months amid signs that the Bush administration is prepared to tolerate prolonged weakness in the U.S. currency. On Tuesday, the euro was hovering between $1.29 and $1.30 on exchange markets, nearing last week's record low.

Copper futures fell 3.2 percent on Monday under pressure from gains in the dollar, rising London Metal Exchange stocks and worries about demand.

Advanced Commodity Spread A strengthening euro is bad news for European exporters. In Germany, where consumer spending is moribund, exports supply what little growth the country has registered.The Europeans blame the dollar's slide on a swelling U.S. budget deficit, caused in part by increased spending on the war in Iraq and the war on terror, as well as tax cuts implemented by the Bush administration. They also cite Washington's huge trade deficit as a reason for the dollar's decline.

The unpopularity of the US dollar continues and the euro is beginning to look comfortable above 1.58, meaning a rise to above 1.60 now appears more probable than not.

Betting Exchange Spread Some European economists also say that the reluctance of Asian countries to let their currencies rise in value against the dollar means that the euro will continue to absorb the bulk of the pressure from a weakened U.S. currency.Dutch Finance Minister Gerrit Zalm, whose country holds the EU rotating presidency, told reporters that the euro's record-breaking appreciation against the dollar is starting to undermine the bloc's already struggling economy.Advertisement"As far as the exchange rate is concerned, ministers agreed that excess volatility and disorderly movements in exchange rates are undesirable for economic growth and, in this context, the recent sharp moves of exchange rates are unwelcome," he said.

Yesterday the Euro continued to rise higher against the U.S. dollar although the sentiment remained mixed that a worldwide credit difficulty will still trigger an interest rate rise in the 13 nation zone. Central banks worldwide have injected billions of dollars into money markets this month in efforts to calm nervous investors. On Wednesday, month funds valued at 40 billion EUR ($54 billion) hungry markets. But despite this hug money supply the ECB failed to bring a cure to the lending market which was still hit by many credit worries.

Stock Spread Trading But EU officials say there are no signs that Washington is listening to European pleas.

Online Spread Betting Treasury Secretary John Snow, who is visiting Europe, says the United States supports a strong dollar, but that it is up to financial markets to set exchange rates. And even though he acknowledged that the U.S. budget deficit is too big, many analysts say that further weakening of the dollar is one way for Washington to boost U.S. exports, spur economic growth at home, and help reduce America's trade deficit.Some German economists see a silver lining in the euro's rise. They say a strong euro raises European purchasing power and could help spur lackluster consumer spending. Under that scenario, a country like Germany could switch from relying on export-led growth to domestic-led growth. But they also warn that, if the euro rises to $1.40, that could dampen economic activity across the continent.

Complete Guide Spread Trading Source: Voice of America

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