Fortunately currency trading can be learned fairly quickly and easily. Most forex brokers will provide new investors with demo accounts where they can trade virtual currencies in real time and get a feel for forex markets.  New traders can also learn about leverage which is widely available in forex markets. Leverage of 100:1 and even 400:1 are common in currency markets but must be used wisely and with caution. While leverage can lead to huge profits market volatility can also lead to huge losses if a trade goes south. Since trades can take place in seconds market shifts can take place rapidly leading to unexpected exchange rate shifts.

New forex traders must also educate themselves on the factors that affect currency markets. Political conditions, economic reports and market psychology all play a very important part in the life of those who trade forex currencies. As an example fiscal and political difficulties in Greece sent the multi nation euro plummeting on global currency exchanges. In addition credit downgrades in Spain and Portugal added to the worries about the stability of the Euro Zone. Fortunately swift and severe austerity programs caused resumed investor confidence in the euro as a currency. Currency traders must learn to follow political and economic news and interpret the results and the affect current events will have on forex markets.

All that is needed to enter this exciting market is some capital, an internet connection and an account at a forex broker. Finding a reputable forex broker is not difficult and the implementation of stricter regulations in 2009 eliminated marginal forex brokers. Increased consumer protections have made currency trading much more attractive and safer for the average small investor.

There are many participants in the currency market. Central banks and large financial institutions have a long history in currency markets. Until the 1980’s forex markets were dominated by large and central banks and very wealthy individuals. To trade forex markets took millions of dollars but now forex markets have been opened to the average investor. Currency traders can take advantage of the large amounts of leverage provided to investors. Leverage of 100:1 and even 400:1 are commonly offered to investors who want to trade forex markets. Since currency movements are measured in ‘pips’ which are fractions of a cent the use of large amounts of leverage allows investors to realize decent profits from their trades.

There are many factors that affect currency exchange rates and those who want to trade forex markets should be familiar with them. Economic factors are probably the most important in determining the value of a currency. A nation’s fiscal and monetary policies can have a profound effect in its currency. Balance of trades and economic growth and health are all important factors for investors to watch. Employment reports, leading economic indicators, housing and retail sales reports can all quickly affect currency markets.

Political conditions can also affect exchange rates. Political instability and unrest can adversely affect the value of any currency. Many investors watch national elections very closely and investors watch for signs of changes in domestic and monetary policy that a new administration may bring. Market psychology can have a profound effect on currency and other markets. As an example unsettling economic events can cause a flight to ‘safe haven’ assets which usually include the US dollar and the Japanese yen. Those who want to trade forex markets would be well advised to keep abreast of current political and economic events. Thanks to the internet just about anyone with an internet connection can join this exciting market and take advantage of the lucrative opportunities it can provide for investors.

In January of 2002 the euro traded at 1.13226 vs. the US dollar and by September 2002 had fallen to 1.01924. Since then the euro has gained considerably and now trades at about $1.4000 vs. the dollar. Euro currency trading requires a lot of research and investors must keep track of economic information from the twelve member nations. The economy of just one nation can affect the euro’s exchange rate.  In 2010 political uncertainty and deficit concerns about Greece caused the euro to fall considerably in global forex markets. The euro was further pressured by concerns about the economies of Italy, Spain and Portugal. Many euro currency traders feared that Greece would default on its obligations but swift and severe austerity measures saved the euro from further declines.

Euro currency trading is easy and can be done anywhere there is an internet connection. The first step is to open an account at a forex broker and download the trading platform. Many forex brokers provide new traders with free training and demo accounts and most experts recommend that new traders spend a few months trading with demo accounts before investing real money. Learning how to use and interpret the economic indicators in the Euro Zone will help euro currency trading clients to determine the mood affecting the euro’s exchange rates. There are many websites that specialize in providing daily reports related to euro currency trading and these can be a very valuable source of information.

Euro currency trading is done in currency pairs, for example the euro/US dollar. If the euro is bought and the dollar is sold then the investor is betting against the dollar. Essentially the investor bets on which currency he or she perceives as the stronger. Euro currency trading can be exciting and very lucrative for investors who have done their homework.

Former IMF economist and Harvard professor Kenneth Rogoff said that Greece will in all likelihood not be the last EU member to need a bailout. Rogoff said that Ireland, Spain and Portugal are “conspicuously vulnerable.” Rogoff told Bloomberg, “It’s more likely than not that we’ll need an IMF program in at least one more country in the euro area over the next two to three year. The budget cuts needed in Europe in many countries are profound.” Irish, Spanish and Portuguese bond yields rose and investors remained concerned about massive deficits in the three EU member nations. Last Friday Greece requested the activation of a 45 billion-euro ($60 billion) EU/IMF rescue package. All three EU countries have the highest debt to GDP ratios in the euro zone. Ireland’s deficit was 14.3% of GDP followed by Spain at 11.2% and Portugal at 9.4%. Currently Greece’s debt to GDP is 13.6%, the second highest in the euro zone.  Rogoff said that the chances of other EU members needing a bailout is, “better than 50-50” and expects Greece to need more money than the original aid package provides.

Greece Needs More Austerity Measures says German Chancellor

The euro fell against most major currencies on investor concerns that the Greek bailout will not prevent Greece from defaulting. The euro fell to its lowest level since January after German Chancellor Angela Merkel said that Greece will have to adopt even more austerity measures to obtain German approval for the EU aid package. Alan Ruskin of Royal Bank of Scotland Group Plc stated, “The market doesn’t like the way the Germans are talking. There’s a complete lack of confidence in Greece. Worse and more worrisome from a euro standpoint is that contagion is continuing afoot.” Greek bonds were hammered and the premium investors are demanding to hold Greek debt exceeded 12%. The dollar advanced on the yen as investors speculate that the US Federal Reserve will withdraw stimulus measures as US recovery gathers steam.

Euro May Fall Below $1.30

According to some analysts the euro will fall below $1.30 this year if the Federal Reserve raises interest rates sooner than European policymakers. Mansoor Mohi-uddin, a Singapore currency strategist stated, “If the Fed does hike before the European Central Bank and the banks of Japan and England, the dollar will become a growth currency again rather than a safe haven. This suggests euro-dollar and pound-dollar remain at risk in 2010 of falling well below our three-month targets of $1.30 and $1.48, respectively.”

Quick Forex Tip: The forex market offers investors the opportunity to profit even during a recession. If one currency rises another must fall creating constant opportunities for savvy investors to profit from currency moves. It is not difficult to learn how to trade forex currency and there are many very well written and user friendly learning programs and training courses available for free on the internet.  Besides training, the most important thing those who trade forex currencies must learn to follow political and economic news and interpret the results and the affect current events will have on forex markets.

Greece could face pressure to implement even more austerity measures when representatives of the EU, ECB and the IMF meet with the Athens government on Wednesday. The meeting was rescheduled due to disruptions in air travel caused by the massive ash cloud from an Icelandic volcano eruption. Eurogroup Chairman Jean-Claude Juncker told the Greek financial website Euro2day that 2010’s austerity measures are “pretty ambitious and look credible.” Juncker further stated, “During our talks with the troika (European Central Bank/European Commission/International Monetary Fund) on the Greek package, the possibility of new measures will be discussed.” The head of Greece’s employers’ association said he expects more cuts and newspapers predicted that tens of thousands of state contractors will find themselves without work. Most experts say that the IMF will demand further austerity measures as a condition for aid. Vassilis Korkidis, president of Greek Confederation of Trade, stated, “The IMF will certainly demand new measures for 2010, effectively proving that the current stability plan is not sufficient. The strategy of domestic deflation will plunge us further into recession.”

Greek Bond Spreads at Record Levels

Should the ash cloud continue to disrupt air travel a spokesman for the European Commission said that participants may hold a video conference. The IMF said the talks should last about fifteen days and any agreement reached would be finalized in a matter of days. On Monday Greek Finance Minister George Papaconstantinou said, “These talks are very important because they will make it possible for us to move very fast if the Greek government decides on the activation of the mechanism.” Juncker said the aid package provided by the EU and IMF would be on common terms. Juncker stated, “In no way will there be different terms from the euro zone and other ones from the IMF.” High borrowing costs are hampering Greece’s ability to finance its debt in a sustainable manner. On Monday the premium investors are demanding to hold Greek debt instead of German Bunds hit a record 482 basis points, up 40 points from Friday’s close. Juncker tried to reassure investors and stated, “What I must say is that the euro zone will assume its responsibilities. We have said it many times, there is European money when it becomes necessary.”

Borrowing Costs Driven by Speculation

Billionaire investor George Soros said that Greece’s high borrowing costs are being driven by speculation. On a news show Soros said that it will probably be necessary for Greece to tap the loan package. Soros stated, “I think it is necessary because the market interest rate is really far too high to make it possible for Greece to meet the conditions that are required of it.”

Quick Forex Tip: There are many factors that affect currency exchange rates and those who want to trade forex markets should be familiar with them. Economic factors are probably the most important in determining the value of a currency. Political conditions can also affect exchange rates. Those who want to trade forex markets would be well advised to keep abreast of current political and economic events. Thanks to the internet, those with the right knowledge and an internet connection can join this exciting market and take advantage of the lucrative opportunities it can provide for investors.

Greece will decide sometime during the next few weeks whether to activate the loan mechanism agreed on by EU finance ministers last Sunday. On Monday the Athens government will begin talks with EU, ECB and IMF officials to clarify details of the agreement. Greek Prime Minister Papandreou told reporters, “We will have to make a decision about whether we activate this mechanism in the next few weeks.” Most investors believe Greece will seek outside aid as high borrowing costs are hampering Greek efforts to solve its fiscal crisis. The ambiguity surrounding the loan mechanism has caused investor concern and some are worried that the parliamentary approval required in some euro zone nations could prompt delays in the implementation of the loan mechanism. Some are worried that Germany, where political opposition to the aid package is widespread, could delay approval unnecessarily. Greek Finance Minister George Papaconstantinou indicated that it would take “one week, two weeks maximum” for the implementation of the loan mechanism. Papaconstantinou stated, “We are quite comfortable that once the framework is in place, meaning the program together with the financing elements, we will be able to move very fast.”

Loan Package Not a ‘Bailout’ Says Papandreou

In March the Athens government cut the pay of about 600,000 public sector workers raised taxes and cut pensions. The austerity moves prompted widespread unrest throughout Greece complete with strikes, protests and demonstrations. The European Commission said that Greece should not need to implement more austerity measures if the country taps the aid package. Greece’s central bank governor said the country should speed up deficit cuts by closing several “loss-making and spendthrift” government agencies. Bank of Greece Governor George Provopoulos told reporters, “This is how we will manage to positively please the markets by ourselves, by reducing the deficit by 5 percent (of GDP), instead of the 4 percent we have pledged for in the Stability and Growth Plan.”Prime Minister Papandreou said the loan package was not a bailout and but would give Greece time to solve its problems. Papandreou stated, “It gives us the room to maneuver to make the necessary changes to make our economy a viable one.”

Risk Aversion Pushes Dollar Higher

Concerns about how Greece will resolve its debt crisis has pressured the euro since late last year. The crisis has prompted a rise in risk aversion which has benefitted the US dollar and the yen. On Friday the euro fell 0.3% vs. the US dollar to $1.3533 and the euro fell 0.8% against the yen. Markets are closely watching this weekend’s EU conference in Madrid and will be monitoring Monday’s talks between Greece and EU/IMF officials.

Quick Forex Tip: Political conditions play a major role in global currency trading. Political instability can cause a currency to lose value. Recently political problems and deficit concerns in Greece caused the euro to fall in global currency trading centers. Market psychology although difficult to define can also affect market perceptions and can either help or pressure currencies.

The euro fell on Thursday (April 15th) as Greece’s borrowing costs rose prompting concerns that Greece will have trouble servicing its debt. The Greek/German bond spread widened to near record levels putting the troubled euro on track for the largest fall vs. the US dollar in three weeks. EU finance ministers agreed last Sunday on a loan package of 30 billion Euros from the EU and an additional 15 billion Euros from the IMF. Boris Schlossberg of GFT in New York stated, “Markets are not pacified by the bailout package agreed upon last weekend and still consider Greece to be a high default risk.” Recent news reports state that Greece has asked for talks with the EU and the IMF. In a letter sent to the European Union, the European Central Bank and the IMF, Greek Finance Minister George Papaconstantinou asked for talks on “a multi-year program of economic policies.” Papaconstantinou also said that the multi year program “could be supported with financial assistance from the euro-area member states and the IMF, if the Greek authorities were to decide to request such assistance.”

IMF, European Central Bank, European Commission to Meet in Athens

The International Monetary Fund said it will send representatives to Athens on Monday and would be joined by representatives from the European Commission and the European Central Bank. Representatives of the Athens government and IMF officials said that Greece has not decided whether to ask for emergency loans. IMF spokeswoman Caroline Atkinson said that the IMF will focus on Greek policies that could prompt a request for outside aid. Atkinson stated, “When we’re discussing with them the policies that could form the basis, at a certain point that could mutate into a discussion for the (financial) arrangement.”Some analysts say that borrowing costs faced by Greece are unsustainable and that Greece may have no choice but to seek outside aid. Ben May of Capital Economics stated, “The fact that they are asking for clarification on various issues about the mechanism suggests that they are seriously considering activating the package.”

Loans at Below Market Rates

Greek Prime Minister George Papandreou told his cabinet that the nation’s debt crisis, “has created psychological terrorism in our economy and among Greek citizens and we have to deal with that. We must ensure safety and confidence.”EU governments have said that they would provide Greece with three year emergency loans at a rate of 5% which is less than the 7% demanded by investors to hold Greek debt. The EU decision to provide loans would have to be a unanimous decision by all 16 EU nations and markets are concerned that Germany may block or delay the loans.

Quick Forex Tip: Euro currency trading requires a lot of research and investors must keep track of economic information from the twelve member nations. The economy of just one nation can affect the euro’s exchange rate.  In 2010 political uncertainty and deficit concerns about Greece caused the euro to fall considerably in global forex markets. Euro currency trading can be exciting and very lucrative for investors who have done their homework.

Some economists believe that the EU/IMF aid package for Greece only offers a short term solution for Greece’s massive debt problems. Financial markets had a positive reaction to last Sunday’s teleconference of EU finance ministers and the euro gained slightly on Monday. The agreement has reduced investor fears of a Greek default which would put the euro under even more pressure and could easily undermine the credibility of the multi nation currency. Some economists say the euro zone remains divided and point out that Sunday’s conference was the third attempt by the EU to boost investor confidence in Greece but that the conference did not address slow European growth and other economic problems in the euro zone. Simon Tilford of the Center for European Reform stated, “This is not a defining moment for the euro zone. What is concerning is that at every stage in recent weeks the EU has been resisting the inevitable and has been forced into action by financial markets. The immediate danger is averted but very little has been done to address longer-term problems. This is not a blueprint for additional crises. It might work for another small country like Portugal but not a big country like Italy or Spain.”

Euro Zone Image Damaged

Should Greece request aid the EU has agreed to a 30-billion-euro ($41 billion USD) three year loan package at 5% interest and the International Monetary Fund would provide 15 billion Euros during the first year. The credibility of the euro zone has already been damaged say several economists by the EU disagreement on how to solve Greece’s debt problems. Some economists fear the debt crisis could spread to other vulnerable EU members. Cinzia Alcidi of the Brussels based European Policy Studies think tank stated, “The image of the monetary union is weakening. The way the Greek crisis is managed and resolved will be crucial to the future of the euro zone and, if the euro survives, to the EU’s future.”

Germany Drops Opposition

The result of Sunday’s conference was a compromise by EU members that Germany would drop objections to Greece receiving loans at below market rates. Previously German Chancellor Angela Merkel had voiced strong objections to any bailout for Greece due to widespread opposition to any Greek bailout by the German public. Merkel is wary of offering any loans in advance of German elections on May 9th. Of Merkel’s previous objections Ulrike Guerot of the European Council on Foreign Relations stated, “I don’t see how she could do a U-turn on what she has been saying until now and release aid before the May 9 election.”  In addition to massive deficits Greece also faces falling tax revenues and growth contraction which may make it difficult for Greece to rely solely on market based solutions.

Quick Forex Tip: The forex market offers investors the opportunity to profit even during a recession. If one currency rises another must fall creating constant opportunities for savvy investors to profit from currency moves. It is not difficult to learn how to trade forex currency and there are many very well written and user friendly learning programs and training courses available for free on the internet.  Besides training, the most important thing those who trade forex currencies must learn to follow political and economic news and interpret the results and the affect current events will have on forex markets.

Sunday European finance ministers will hold a teleconference to detail how the rescue mechanism for Greece will work. The Finance ministers will be joined by the European Central Bank and the European Commission. At the present time Greek leaders have not asked the EU to activate the rescue mechanism but consider Sunday’s teleconference important. Greek spokesman George Petalotis said, “Greece has not asked (for) the activation of the mechanism. “ He added” It is an important step to detail the terms of the mechanism.” Markets have viewed the EU/IMF agreement as opaque and short on details. Although Greece has not asked for aid and has said repeatedly that it prefers a market based solution the teleconference is meant to insure the safety net will be ready if needed. A spokesman for Eurogroup President Jean-Claude Juncker stated, “There will be a teleconference on Sunday on Greece in the usual Eurogroup composition. Greece has not asked for help, but you have to be ready if they do”.

High Borrowing Costs Hammer Greece

Markets have hammered Greek bonds and bank stocks during the past week driving the heavily indebted nation’s borrowing costs higher. High borrowing costs could easily push Greece to ask for aid. Greek Prime Minister George Papandreou said in a newspaper interview that the Athens government may be forced to ask for a bailout if markets remain skeptical. Papandreou told reporters, “The question remains whether this mechanism will convince markets just as a gun on the table. If it does not convince them, it is a mechanism that is there to be used.” Greek Finance Minister George Papaconstantinou told reporters that clarification about the details of the EU/IMF agreement is needed. Papaconstantinou said, “The aid mechanism is a very important safety net. We have repeatedly said that it was crucial to create and detail it, but we hope and believe that Greece will not use it.”

Greek T Bill Auction Tuesday

EU members have promised to implement a loan package to Greece should market based solutions fail. On Tuesday Greece will auction 1.2 billion Euros ($1.6 billion USD) of 6 and 12 month T Bills but EU officials would not comment on the timing of Sunday’s teleconference. On Friday Papaconstantinou told reporters, “Until now all (bond) issues have been oversubscribed, that shows that despite the turbulence in bond markets there is interest and trust from investors. Our target remains to have better rates and borrowing terms.” To add to Greece’s troubles Fitch ratings agency downgraded Greece’s rating to BBB- , just above ‘junk’ status.

Quick Forex Tip: Electronic currency trading offers many advantages to the average investor. Anyone can learn how to trade currencies by using one of the many excellent training programs available online for free. In addition many retail forex brokers provide potential investors with training programs and demo accounts. Electronic currency trading offers recession proof trading because in the currency market when one currency falls another rises giving the savvy trader the opportunity to profit from the move.

The US dollar was mixed against most major currencies in advance of Friday’s upcoming jobs report and continuing euro jitters. Investors see Greece’s high borrowing costs as evidence that the beleaguered nation’s debt troubles are far from over. Greece was able to raise money from bind sales but financial markets demanded higher interest rates for Greece’s debts despite last week’s agreement between the EU and the International Monetary Fund. The EU has agreed to provide two thirds of funding should Greece need it and the IMF has agreed to provide the other third. The Athens government has repeatedly said that it does not need outside financing and has implemented austerity including tax hikes and a cut in pensions. Investors are waiting to see if the EU IMF agreement can restore euro confidence and erase concerns about Greece’s massive debt crisis. The euro has fallen more than 6.5% so far this year and investors are starting to question the sustainability of the multi nation currency  that combines economically disciplined countries in northern Europe with free spending southern European nations. In addition to Greece’s woes Portugal’s rating was downgraded by three major ratings agencies. Michael O’Sullivan of Credit Suisse stated, “The issue of country indebtedness is going to be with us all year and next year on a kind of revolving basis.”

Bond Issue Fails to Meet Expectations

Greece’s recent bond sale gave the troubled nation little respite due to less demand than previous bond issues. The 7 year, 5 billion euro ($6.72 billion USD) Greek bond issue was the first test of market confidence after last week’s announcement of an EU IMF rescue plan. The Greek bonds carried a coupon of 5.9% twice what Germany pays on 7 year bonds. Fitch ratings agency said in a statement, “The (euro zone) statement was positive for Greece’ credit profile by enhancing its near-term financing options and flexibility as well as reaffirming the support of euro area member states for economic and fiscal reform in Greece.” Fitch continues its negative outlook for Greece and referring to last week’s agreement and cited a “lack of clarity over the fiscal financing strategy”.

No Indications Greece Will Ask For Aid

The head of the International Monetary Fund has not had much to say since the agency was assigned a subordinate role in the Greek rescue plan. Managing Director Dominique Strauss-Kahn said that there are no immediate indications that Greece would need the agency’s help. Strauss-Kahn also said, “We will move and we will say something only when Greece asks us.”

Quick Forex Tip: There are many factors that affect currency exchange rates and those who want to trade forex markets should be familiar with them. Economic factors are probably the most important in determining the value of a currency. Political conditions can also affect exchange rates. Those who want to trade forex markets would be well advised to keep abreast of current political and economic events. Thanks to the internet, those with the right knowledge and an internet connection can join this exciting market and take advantage of the lucrative opportunities it can provide for investors