Wednesday, September 30, 2009
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Thursday, September 24, 2009
The following theories explain the fluctuations in FX rates in a floating exchange rate regime (In a fixed exchange rate regime, FX rates are decided by its government):
(a) International parity conditions viz; purchasing power parity, interest rate parity, Domestic Fisher effect, International Fisher effect. Though to some extent the above theories provide logical explanation for the fluctuations in exchange rates, yet these theories falter as they are based on challengeable assumptions [e.g., free flow of goods, services and capital] which seldom hold true in the real world.
(b) Balance of payments model (see exchange rate). This model, however, focuses largely on tradable goods and services, ignoring the increasing role of global capital flows. It failed to provide any explanation for continuous appreciation of dollar during 1980s and most part of 1990s in face of soaring US current account deficit.
(c) Asset market model (see exchange rate) views currencies as an important asset class for constructing investment portfolios. Assets prices are influenced mostly by people’s willingness to hold the existing quantities of assets, which in turn depends on their expectations on the future worth of these assets. The asset market model of exchange rate determination states that “the exchange rate between two currencies represents the price that just balances the relative supplies of, and demand for, assets denominated in those currencies.”
None of the models developed so far succeed to explain FX rates levels and volatility in the longer time frames. For shorter time frames (less than a few days) algorithm can be devised to predict prices. Large and small institutions and professional individual traders have made consistent profits from it. It is understood from above models that many macroeconomic factors affect the exchange rates and in the end currency prices are a result of dual forces of demand and supply. The world's currency markets can be viewed as a huge melting pot: in a large and ever-changing mix of current events, supply and demand factors are constantly shifting, and the price of one currency in relation to another shifts accordingly. No other market encompasses (and distills) as much of what is going on in the world at any given time as foreign exchange.
Supply and demand for any given currency, and thus its value, are not influenced by any single element, but rather by several. These elements generally fall into three categories: economic factors, political conditions and market psychology.
Sunday, September 20, 2009
The automotive industry was weakened by a substantial increase in the prices of automotive fuels linked to the 2003-2008 energy crisis which discouraged purchases of sport utility vehicles (SUVs) and pickup trucks which have low fuel economy. The popularity and relatively high profit margins of these vehicles had encouraged American "Big Three" automakers, General Motors, Ford, and Chrysler to make them their primary focus. With few fuel-efficient models to offer to consumers, sales began to slide. By 2008, the situation had turned critical, as the global financial crisis and the related credit crunch  placed pressure on the prices of raw materials.
Car companies from Asia, Europe, North America, and elsewhere have implemented creative marketing strategies to entice reluctant consumers as most experienced double-digit percentage declines in sales. Major manufacturers, including the Big Three and Toyota offered substantial discounts across their lineups. The Big Three faced criticism for their lineups, which were seen to be irresponsible in light of rising fuel prices. North American consumers turned to higher-quality and more fuel-efficient product of Japanese and European automakers. However, many of the vehicles perceived to be foreign were actually "transplants," foreign cars manufactured or assembled in the United States, at lower cost than true imports.
Thursday, September 17, 2009
USD continues to weaken, but are we approaching a turning point?
MAJOR HEADLINES – PREVIOUS SESSION
US Aug. CPI out at +0.4% m/m, -1.5% y/y vs. +0.3%/-1.7% expected and flat/-2.1% prior
US Q2 Current Account Balance out at -$98.8 bln vs. -$92.0 bln expected and -$104.5 bln prior
US Jul. Net long-term TIC flows out at +$15.3 bln vs. +$60 bln expected and +$90.2 bln prior
US Aug. Industrial production out at +0.8% vs. +0.6% expected and revised +1.0% prior
US Aug. Capacity Utilization out at 69.6% vs. 69.0% expected and revised 69.0% prior
US Sep. NAHB Housing market Index out at 19, as expected, vs. 18 prior
NZ Aug. Business PMI out at 48.7 vs. revised 49.6 prior
JP Q3 BSI Large All Industry Index out at 0.3 vs. -22.4 prior
JP Q3 BSI Large Manufacturing Index out at 15.5 vs. -13.2 prior
JP Jul. Tertiary Industry Index out at 0.6% vs. 0.5% expected and 0.2% prior
JP BOJ leaves rates unchanged at 0.1%
SI Aug. Non-oil Domestic Exports out at -7.1% y/y vs. -5.0% expected and revised -8.7% prior
THEMES TO WATCH – UPCOMING SESSION
(All times GMT)
UK Retail Sales (0830)
EU Euro-zone Trade Balance (0900)
EU Construction Output (0900)
UK CBI Sep. Industrial Trends (1000)
CA CPI (1100)
Swiss SNB Rate Decision (1200)
CA Leading Indicators (1230)
US Housing Starts (1230)
US Building Permits (1230)
US Initial Jobless Claims (1230)
US Philadelphia Fed Index (1400)
A session of sharp swings yesterday but the dollar finished the session still with a weaker bias as risk sentiment remained intact. US bond markets took a hit amid reports that a leading think-tank suggested 2 senior Fed officials were turning more hawkish and that markets jumped to the conclusion thast they could advocate a rate hike as early as next week, and look for an early exit strategy. The kneejerk reaction was to buy the dollar as US yields rose with USDJPY staging the smartest turnaround from the low 90’s to head back to mid 91’s. Earlier the pair had gravitated towards the 90.0 mark after Japan’s new finance minister Fujii had said he supported a strong JPY and was against intervention if markets moves were not too rapid.
The dollar’s strength proved short-lived however as US data continued to come in on the better side of forecasts (CPI, industrial production and capacity utilization)and we soon hit new 2009 highs for the EUR, CHF AUD and NZD. GBP was again a laggard even though UK employment data was better than expected with the hangover from BOE King’s comments on Tuesday still a threat.
During the Asian session, the BOJ kept the call rate unanimously unchanged at 0.10% and its Lombard rate steady at 0.30%, as had been widely expected. However it's economic assessment was upgraded by saying the economy now showed signs of recovering versus its view in the prior month that the economy had stopped worsening. Otherwise everything else was more or less the same, with the central bank sticking to its stance that the economy would likely pick up in the latter half of the year to March 2010. The BOJ also still saw downside risks but noted financial conditions, though severe, were increasingly showing signs of improvement.
While on the topic of central banks, the Swiss National Bank holds its rate meeting today and, while the market is expecting no change in rates from their current 0.25%, eyes will be glued to the accompanying statement for further comments relating to CHF strength. With a sense that the market is heavily positioned short of CHF, there is a risk that any reaction to weakening the CHF may be muted. Watch for that at 1200GMT.
Elsewhere in Europe, UK retail sales and Euro-zone trade data will grab the attention. While the UK sales data is notoriously fickle and unreliable, markets will pounce on any sign of weakness as another excuse to pound the pound. On the other hand, if US data matches market expectations (initial jobless claims at 555k versus 550k last, housing starts at 598k versus 581k, building permits at 583k (564k prior) and the Philly Fed Index at 8.0 from 4.2 last) then expect to see an extension of the recent trend – Wall Street higher, the USD lower and commodity currencies in demand.
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Tuesday, September 15, 2009
EUR/USD rose initially from 1.4600 to 1.4628 after U.S. data was released, although the pair turned down and dropped to session low at 1.4575 shortly afterwards.
GBP/USD has extended its decline after Retail sales/PPI data was released, and the Sterling broke below its intra.-day low to hit a fresh low at 1.6440.
USD/JPY has extended its recovery from 90.20 low, as the pair broke above intra-day high at 91.25 to hit a fresh hiogh at 91.50.
Thursday, September 3, 2009
The FXdirekt Bank is an independent company with around 90 employees. The company headquarters are located in Krefeld, Germany and the branch office is located in Oberhausen. The FXdirekt Bank is a member of the EdW ("Entschädigungseinrichtung der Wertpapierhandelsunternehmen"), which is an organisation created to secure investor claims and is also registered as a commercial bank with the BaFin (German Federal Institute for Financial Services Supervision).
Tuesday, September 1, 2009
The technological and industrial history of Canada encompases the country's development in the areas of transportation, communication, energy, materials, public works, public services (health care), domestic/consumer and defense technologies. Most technologies diffused in Canada came from other places. Only a small number actually originated in Canada. For more about those with a Canadian origin see Invention in Canada.
The terms chosen for the "age" described below are both literal and metaphorical. They describe the technology that dominated the period of time in question but are also representative of a large number of other technologies introduced during the same period. Also of note is the fact that the period of diffusion of a technology can begin modestly and can extend well beyond the "age" of its introduction. To maintain continuity, the treatment of its diffusion is dealt with in the context of its dominant "age". For example the "Steam Age" here is defined as being from 1840 to 1880. However steam powered boats were introduced in 1809, the CPR was completed in 1885 and railway construction in Canada continued well into the twentieth century. To preserve continuity, the development of steam, in the early and later years, is therefore considered within the "Steam Age".
Epidermal growth factor receptor (erythroblastic leukemia viral (v-erb-b) oncogene homolog, avian)
|Cartoon diagram of the epidermal growth factor receptor (EGFR) (rainbow colored, N-terminus = blue, C-terminus = red) complexed with its ligand epidermal growth factor (magenta) based on the PDB 1NQL crystallographic coordinates.|
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|RNA expression pattern|
The epidermal growth factor receptor (EGFR; ErbB-1; HER1 in humans) is the cell-surface receptor for members of the epidermal growth factor family (EGF-family) of extracellular protein ligands. The epidermal growth factor receptor is a member of the ErbB family of receptors, a subfamily of four closely related receptor tyrosine kinases: EGFR (ErbB-1), HER2/c-neu (ErbB-2), Her 3 (ErbB-3) and Her 4(ErbB-4). Mutations affecting EGFR expression or activity could result in cancer.