Articles

The AUD vs USD Currency Pair

The AUD vs USD is the abbreviation for the Australian Dollar (AUD) and U.S. Dollar (USD) currency pair. This signifies how many US Dollars (the quote currency) are needed to purchase one Australian Dollar (the base currency). In trading jargons, the AUD/USD currency pair is also known as the “Aussie”. What Affects the Aussie? AUD vs USD is considered to be a commodity pairing. It involves currencies from countries that possess large quantities of raw materials. In the AUD/USD currency pair, the commodity that serves as the catalyst for exchange rate valuation is gold. Both Australia and the United States play a key role in the global production of gold, ranking third and second respectively. Furthermore, The United States is the world’s fourth-largest exporter of gold (US$ 19.3 billion annually), while Australia is the world’s seventh-largest global exporter (US$ 10.7 billion annually). Gold has a positive correlation with AUD vs USD. When the gold goes up, this currency pair goes up. But when the gold goes down, this currency pair also goes down. Historically, the AUD/USD currency pair has had a whopping 80% correlation to the price of gold. Trading the Aussie The AUD vs USD currency pair is one of the most commonly traded currency pairs on the forex market. In a volume-traded perspective, both are classified as major global currencies. The United States Dollar is ranked as the most frequently traded currency in the world, while the Australian Dollar ranks fifth. Here are some of the reasons why investors and traders are attracted to the AUD/USD currency pair. The liquidity of the pair attracts intraday traders who are looking to implement strategies aimed at profiting from short-term exchange rate fluctuations. The goal of achieving a long-term capital appreciation is one of the reasons why investors commonly take positions in AUD/USD. No Matter which style of market participation is preferable, AUD/USD is one of the best candidate for active trade. Trade Forex Using the USD/AUD With its undeniable potential, there is no doubt that the AUD vs USD currency pair is a good option for forex trading. If you are interested in trading this pair, you should contact Financials Trading Online (XFT) today. We offer a wide variety of currency pairs and the best forex trading tools and services in the industry.

The Singapore Dollar as a Profitable Investment Channel

The Singapore dollar is the official currency of the island state of Singapore. It is divided into 100 cents and is coded as SGD. The Singapore dollar is commonly abbreviated with the dollar sign $, or S$ to distinguish it from other dollar-denominated currencies. In Singapore, the dollar is also known as “Sing”. All Singapore dollars and coins are issued by the Monetary Authority of Singapore. The first set of Singapore coins were introduced in denominations 1, 5, 10, 20, and 50 cents and 1 dollar. Brief History Singapore used the Straits dollar from 1845 to 1939. It was ten replaced by the Malayan dollar, which in turn was replaced by the Malaya and British Borneo dollar in 1953. Singapore used this common currency until the Malaysia, Singapore and Brunei monetary union broke down in 1965. Singapore became independent in 1963, and issued and issued its first coins and notes on April 7, 1967. Singapore pegged its dollar to British Pound Sterling until the early 1970s, then to the US Dollar for a short period of time. Singapore pegged its currency against a fixed and undisclosed trade-weighted basket of currencies from 1973 to 1985, reflecting its diversified trade links. From 1985 onwards, the Singapore Dollar has floated within an undisclosed bandwidth, closely monitored by the Monetary Authority of Singapore (MAS) to guard against imported inflation and ensure that Singapore's exports remain competitive. Economy As of 2012, the total currency in circulation was S$29.1 billion. All issued Singapore currency in circulation (notes and coins) are fully backed by external assets in its Currency Fund to maintain public confidence. The Singapore government announced that the Currency Fund will be merged with other funds of the MAS in the second reading of the Monetary Authority of Singapore (Amendment) Bill 2017 because the currency in circulation is effectively backed by the full financial strength and assets of MAS, which is much larger than the Currency Fund. After the financial crisis, the SGD became one of the top-performing currencies. The Singapore dollar is the twelfth most traded currency in the world, and the third most in Asia, next to Japanese yen and the Renminbi. Trade Forex Using SGD With its continuous growth, the Singapore dollar is definitely worth investing into. If you are into Forex trading, you should consider trading with Financials Trading Online (XFT) today. They offer a wide variety of currency pairs and the best forex trading service in the market.

Financial Assets Know About - The irony of having more in less

Financial assets are liquid assets prized through their represented contractual claims. Bank deposits, stocks, bonds, loans and the likes are financial asset examples.  Physical assets such as land, equipment, gold and commodities are different from these because financial assets have no tangible elements.  Financial assets, in simpler terms, are legal claims to future cash. These assets are usually expected to be converted to cash at a defined time of maturity. Counterparties such as banks which came to an agreement with a holder will then pay the future cash.  A FINANCIAL ASSET POSSESSES THE FOLLOWING CHARACTERISTICS:  It can be owned It has monetary value Its monetary value is derived from a contractual claim  Benefits of Owning Financial Assets  Low Maintenance                         Since they have no physical aspect, financial assets obviously do not need space for storage and regular maintenance and insurance efforts. They can usually be checked through institutional statements, automated machines and even online. Easier to Spend                         Majority of the market at present accepts liquid assets in financial transactions such as making large investments. Physical assets need ample time to be converted to monetary form. Lower Loss Risk                         Financial assets carry a lower risk of loss compared to physical assets since they can be quickly sold at a full value. When market forecasts become unstable or financial crises take place, liquid assets can immediately be sold with minimal or no loss at all. These bring less Better Trade Opportunities                         Daily financial exchanges are constantly taking place. Financial assets have the fastest and most convenient ways to trade with a great deal of opportunities and platforms. You don’t have to look for a buyer and pitch your asset with the chance to get rejected. Stronger Financial Profile                         Owning financial assets adds up to your chances to avail other liquid asset offers such as loans and mortgages. Some institutions actually require liquid assets and savings accounts for mortgages.  Types of Financial Assets Stocks These are assets within companies and corporations have no ownership time limit. Investors purchasing stocks from companies became shareholders, sharing even the businesses’ profits and losses. Stocks can be owned as desired but can also be sold to other investors. Certificate of Deposit                         This certificate of deposit (CD) lets an investor deposit money to a bank for a set time frame, with a certain monthly interest rate. Bonds                         Governments and companies use bonds to finance short-term projects. These are paid at the maturity date including interest rates. They contain a declaration of the owed amount of money.

Things you Should Know About the Hong Kong Dollar

The Hong Kong dollar is the eight-most traded in the currency in the forex markets today and the third in terms of the most active currencies in Asia but isn’t a notable reserve currency despite of the facts stated above.  Hong Kong’s Economy   Hong Kong is an autonomous region but is still a part of China. While its economy is small, it is free according to the Index of Economic Freedom’s standards.  Services are what drives Hong Kong’s economy with 85 percent of workers involved in any kind of service. The major services employers include financial services, hospitality, retailing and trade.  The region's GDP has been quite erratic for the past 20 years usually between around 5 percent and 10 percent. Inflation has shown irregular movements as well with it going as high as 10 percent around 1995 and lowering to the negative territory the time the 20th century came around.  Hong Kong doesn’t have a lot when it comes to barriers to business. Couple that with the fact that Hong Kong has low taxes, it doesn’t take much to see how it has become an integral center for finance and trading in Asia.  Characteristics   The Hong Kong dollar is overseen by the Hong Kong Monetary Authority and is not allowed to be traded freely. The currency trades within a currency band that is very tight thanks to the current exchange rate regime called a “linked exchange system”.  While data such as inflation, GDP, trade balances and more are still a factor, the Hong Kong dollar has other factors that affect it. It is fixed to the U.S. dollar so whatever effects that the economic data mentioned above are minimal.  The Hong Kong dollar drives most traders away due to how miniscule price movements are but major baking institutions try to conduct trades with the assistance of computers that can capitalize on the small price movements. A lot of the transactions that use the currency are mostly for carry trading due to its low interest rates. Investors can buy Hong Kong dollars which they can use to buy bonds in countries like Australia.

Japan’s Economy in 2017

Japan’s growth has been stable but is considered to be slow in the last few years. This article will discuss a few details about Japan’s market and macro-economic performance in the last year such as the country’s Gross Domestic Product (GDP) Growth, inflation, manufacturing and more.   GDP Growth   Japan had a strong international trade and a productive fiscal activity in 2017. This resulted in an estimated 1.5% growth. The economy has shown an uninterrupted growth for over seven quarters. The country’s healthy global growth and indulgent financial conditions positively affects the Japanese Economy. However, the conditions that pushed its growth this year are beginning to taper off affecting economic activity.   Wage growth has been on the weaker side which limits private consumption. It is unclear how long this growth will continue to rise, because the economy’s main driver which is consumer spending, remains weak.   Inflation   Japan’s inflation is high in 2017 despite weak consumer spending. Inflation rate is measured based on the Consumer Price Index (CPI). Japan’s economy rose in terms of inflation rate (CPI) in 2017 compared to 2016. Japan’s Inflation rate shot up 0.50% in 2017 in comparison to 2016.   Export and Employment Rate   Japan’s exports rose in 2017 despite the decline in international trade since 2016 which contributes to a slowdown in business investments.   Residential investments are also booming with very low long term interest rates. Gains from employment has helped bring up the growth of private consumption to the highest state since 2014. However, the wage worth remains low regardless of the drop in the unemployment rate and the highest job opening since 1976.   Economic Prospect   It is expected that growth will slow down because fiscal consolidation will resume in 2018. Wages are estimated to slowly rise because of the labor market tightening which will damage private consumption. The economy’s fiscal sustainability will be more easily assessed when the more detailed fiscal consolidation plan is officially announced later in 2018.

All About ASEAN Countries

What are ASEAN countries? The Association of Southeast Asian Nations, also known as ASEAN, consisting of ten Southeast Asian states, is an intergovernmental and economic organization primarily aims to promote growth and stability within the economy of its members.  ASEAN was founded about fifty years ago in 1967 by five of the Southeast Asian countries, Philippines, Indonesia, Malaysia, Singapore and Thailand namely. The goal was to advocate stability in the region while also work on economic growth. Brunei, Cambodia, Laos, Myanmar and Vietnam were later on added to the organization.  The Importance of the Region   Economically, how important are the ASEAN countries? The ASEAN economy together is the seventh largest economy globally with a combined GDP of 2.6 Trillion Dollars in 2014. The combined ASEAN countries possess the third largest workforce in the planet. In addition to that, they also consist of roughly 640 million people which means it is around 9% of the world’s population.  Does Investing In ASEAN Countries Have Potential?   There is great potential in investing in these countries. There are a number reasons why and the following are a few:  Potent Market - The ASEAN’s market comprises 9% of the planet’s total population and its combined income per capita has only been rising in the last 6 years and as of 2011 it has come to an average of $3,600. Labor Force - The ASEAN countries’ workforce is one of the aspects that attract investors. It consists of efficient and productive human resources with highly skilled professionals. The ASEAN labor force is placed at a 70% participation rate. Positive Investment Practices - ASEAN is devoted to giving an excellent investment environment for investors. ASEAN’s initiative focuses on a captivating investment framework that attract investors and help those who are looking to do business in the region. Economic Growth -  The states that are members of the ASEAN have been pursuing and participating macroeconomic policies that helped the economic growth of the region. The region has managed to sustain a 5.3% GDP growth since 2006. From a US$1.8 trillion in 2010, it’s GDP rose to about US$2.2 trillion in 2011.

All About Index Funds

Investing in index funds is known to be a sensible investment strategy. Though this information is well known, many are not completely aware of how it actually works. Understanding the effect of index funds investments will be beneficial to the investors.   Definition of Index Funds  Index fund is a form of mutual fund designed to match or track a constituent or the return of a market index. It is recognized as a type of mutual fund that provides a large market exposure. The operating cost and portfolio turnover is also known to be low.   A simple way to put it is, if investors purchased  shares of an index fund, they are buying shares from a portfolio that consists of the securities in an underlying index. The securities and the index funds are held proportionally in a way that when the index decreases, the fund for that share decreases as well and vice versa.   Index funds sometimes mirror comprehensive market indices while other forms of index funds replicate indexes with specific characteristics such as those that participate in a specific industry or geography.   Advantages   There are a number of advantages in index funds instead of direct ownership of the underlying securities. The following are a few examples:   Low Cost - The cost of buying and selling index fund shares is a lot lower than direct underlying shares. The index will be the determining factor to deciding which security to invest in instead of the active management. Liquidity - Buying and selling index funds is a lot faster than that of underlying shares due to the fact that index funds are bought and sold in large exchanges daily and numerous funds trade hundreds if not thousands of shares daily. Diversity - It is easy for investors to get exposed to a big group of companies because the interest of the underlying shares of securities is represented in each index fund. Because of this, index funds are also made less unstable compared to individual securities. Returns - Broad indices are proven to have outmatched typical mutual funds overtime which makes index funds a great way to better market returns.

The Benefits and Risks of Investing In Developing Countries

Countries that are in its early stages are usually attractive to investors. But is investing in developing countries profitable? What are the benefits of doing so? This article will discuss the major aspects involved in investing in the markets of developing countries.   BRIC  The BRIC is a band of countries consisting of Brazil, Russia, India and China. 10 years ago, Jim O’Neill, Goldman Sachs’ asset manager, coined the term BRIC in relation to his prediction in an economic report stating that if the rate of growth and progress of the said countries continue, they would eventually play a larger role in the global economy.   The optimistic scenario that O’Neill foretold was that the GDP share of these countries together would rise from 8% to 14%. In 2008, the actual rise of the combined share in the BRIC countries was around 22%. These countries showed such rapid growth that attracted the attention of investors. It then seemed that investing in developing countries like the BRIC was a good idea.   Growth and Development  The BRIC, together, accounted for about 30% of the global increase in output from 2000-2008. The rate China’s growth and development to date has outmatched the rest of the other BRIC countries.   China has contributed over half the BRIC’s share and has produced more than 15% of the growth in global economic output during that period. The progress and growth that China and the rest of the BRIC countries have shown is one evidence that investing in developing countries is an attractive option.   Potential Risk  There are a few aspects that make investing in developing countries risky. One of these threats is natural disasters. Years of development and growth may easily come to a halt when a natural disaster hits a country you have invested in.   Conclusion  Since 2000, there has only been improvement and growth coming from the BRIC market and it’s definitely a good investment strategy to invest in developing countries as long as you take into account the potential risks involved in any investment.

Equity Investment and Its Concepts

Equity investment is one of the strategies that investors use to maximize ongoing profits in the form of capital gains. This investment is mostly in the form of stocks. Equity, roughly, is commonly known to be an asset’s value minus its liabilities.   An equity investment in the form of stocks signifies partial ownership of the company. The investor may only gain income upon the company’s decision to distribute its proceeds after asset liquidation or upon selling the shareholdings to other investors.   What to do before carrying out a transaction   It is integral to make sure the investors have a remarkable, detailed and accurate business plan, a superb accomplishment record and portfolio management skills. There are multiple, competitive companies that offer guidance to investors and entrepreneurs alike.   Why it is ideal to invest   Investments in a private equity is relatively beneficial to the economy. Private equity investments commonly attract wealthy people and corporate investors including pension plans, big university donations and family offices.   Equity investment function as a funding source for high-risk projects and early stage establishments. Usually, the money is directed to fresh companies that have potential for considerable growth. These companies may develop and expand using investors’ money.   There is a number of investment banking firms that help and guide the investor appropriately. These investment banking firms examine the stocks with great attention to detail therefore their guidance is of great importance. In most cases, these firms are able to make correct projection as to the future of a stock based on past performances and various analytical tools that assess future trends.   Investors tend to invest in undervalued companies if they shows potential to have substantial growth eventually. This is, in fact, the secret – buy at a low price and sell at a high price. A company growth at a reasonable price will result in an evidently higher returns on the equity investment.

The Evident Effect of Economic Factors on the Value Currency

The value of a nation’s currency fluctuates regularly due to a large scale influence its economy. It is unmistakable that a nation’s economic factors significantly affect its currency’s value. The question is how these factors relate to forex and, therefore, in what way the economy influences currency.   Currency exchange isn’t as prominent in the financial market headlines as the stock market and commodities but its fluctuation affects the stock market and commodities market strongly. The value of a nation’s currency is integral to its capability to purchase goods and its overall wealth.   Taking into account the state of the currency value and trends is a great strategy to keep up with globalization. Economic factors influence the currency market mainly by the concept of demand and supply. A few examples of additional factors that affect currencies are interest rates, inflation and economic growth and political stability.   Interest Rates   The rate of interest of a nation is one of the economic factors that affect currencies. When interest rate increases, demand increases as well, consequently, when interest rates go down, the currency appears less attractive, and therefore demand decreases.   Inflation   Inflation is another economic factor that influences the fluctuation of currencies. Inflation is an apparent rise in prices concerning goods and services. When there is a covert demand for a product, its price will rise. A rise in price of certain goods or services is a substantial increment to a thriving economy. High inflation on the other hand lowers the money’s buying power thus lowering the value of domestic currency.   Economic Growth   Another one on the list of economic factors is the rate of economic growth. The rate of growth of an economy directly correlates with the demand for products and services. Governments always try to create more job possibilities draw in investments and capital.   Economic growth can be measured by focusing on a nation’s GDP. A growth of 3% in GDP is a sign of growth while falling close to zero or a negative may lead to recession. GDP growth allows for low unemployment and higher national income to develop. It also means higher consumer spending.   Political Stability   A very important economic factor that affects the value of a currency is political stability. A decrease in investor and consumer morale is usually what follows political instability. The absence of political stability may negatively affect economic growth, which leads to investors seeking for a stronger currency in exchange.