The interest rate is an index to measure the profitability of the savings or of some investment. This word shows an amount of money and which will be the percentage that we will obtain, or in case that you have taken a credit, when will we have to pay it.
The forex interests are related to the pair of foreign currencies that you choose for investing. What do we want to say with this?. In all the continents the interest rates vary. In forex the foreign currencies are commercialised in pairs from different continents and so the forex interests vary significantly.
Each foreign currency has what is called stoppage cost at the forex world, this cost varies according to the difference of the interest rates between the 2 foreign currencies.
For example, in the pair EUR/Dollar the difference of the rates is the difference between the short European rates and the short American rates.
Actually the forex interests that can be taken from this pair are not very much, as the European rate is in 4% and the American one in 4,25% , but as an example it will be useful to understand. That means that the profitability will be of 0,25% annual, according to the values of the reference rates.
The forex interests are the profit margin that gets the investor, any news about interest rates can affect directly the foreign currencies market. If a country raises the interest rate, the currency of this country will become stronger in front of other currencies of the world and investors will invest on the currency of this country to obtain more profits.
Variations in forex interests are for you to take advantage of and that’s why you should pay attention to variations that there are in the different continents to know where to invest.
What is what we call fundamental analysis forex? Which are the characteristics of this kind of project that makes it become impossible whenever you want to take a decision?
The fundamental analysis at forex is basically a more complete observation of the actual situation of a company or country in economic issues.
The fundamental analysis includes the analysis of economic indicators, markets and the political environment to evaluate the currency of a nation, and its incidence according to other. The growing rates given by the numbers of the GIP (Gross Internal Product), the inflation, the interest rates, the unemployment, the reserves, the circulating asset, and the productivity levels, they represent the most considered economic indicators that are the key of the fundamental analysis.
Not only at the foreign currencies market a fundamental analysis can be done, the Stock market is also used for seeing under which conditions is the company from which you want to buy assets.
The fundamental analysis is used after compiling all the available information with the aim of getting a wide valuation of this. The end of this method is knowing if a company is cheap or expensive according to the information that we have.
With the fundamental analysis strenghs and weaknesses of a company, for example financial strength, liquidity, expenditure and profitability, since the analysis of these variables is determined the future behaviour that we will get in case of buying assets of that entity.
How to operate with a forex account? The first thing that you have to know is that in Internet there are accounts that are available for you to do practices without using real money.
The forex account is a panel that has on the left top corner the quotations window where you can find the eight currencies with which forex operates divided in 22 pairs. Quotations that appear there are updated in real time so knowing the price of each foreign currency will not be a problem.
Once you have chosen the pair of foreign currencies on which you are going to invest, a window will be opened, that is the order of market, we will talk about an order of market as a tool that is used to enter and go out of a position.
In the order of the market, you will have to verify your number account in case of having more than one, if the foreign currencies on which we are investing are right, if you are going to sell or buy those foreign currencies and confirm the amount of the operation that is shown in thousands.
Once all these steps are done, you should do a click on the button that says “advanced” and automatically there will appear an order of stop where you will have to put your price limit in case the foreign currency quotation changes and that generates problems.
You can also put the price level in which you want to achieve your profits, when doing it you will establish a limit to your profits.
Which foreign currencies are advisable to acquire in those moments in which the fluctuation of these is very abrupt? ?. The acquisition of foreign currencies these days is an activity that is usually very profitable in some cases and not that much in others.
For example, one week ago there was not operator that recomended to buy Reales (Brasilian currency), even if these last days this currency reduced its value. Since 20th november until today the currency reduced its value in 8 cents or 4,4% turning from 1,758 Reales per dollar to 1.836.
The risk aversion made the investors sell the active in the emerging markets and in that context the Real was punished.
The foreign currency that had the greatest acquisition in these last days was the dollar that increased its value in front of the Euro. The european currency lost a 0,4% to turn to be negotiated at 1.4825 more than a cent under the maximum of the last week.
According to analysts, the reasons of the lows are because, for example, the dollar raised in front of various currencies of the world, after the Citigroup informed that it will sell a participation of USD 7.500 millions the government of Abu Dhabi (the biggest of the seven emirates that compose the Arabian emirates of the Persian Gulf), which helped to the confidence of the American banks punished.
We will have to see in these next days how does the trend in the acquisition of foreign currencies continue, if this direction continues the American currency could gain ground in not very much time.
Which is the analysis that we should do about the actual situation of the markets?. In the 90’s in a movie called “Jerry Maguire”, the player (Cuba Gooding Jr.) shouted to Tom Cruise (his manager) “show me the money”. The analogy seems to be at the real market as nowadays is the financial market the one that ask the Federal Reserve of the United States to calm down.
The forex analysis that must be done of the situation is very exhaustive as the monetary authority said that they would inject USD 8000 millions to provide of enough liquidity to the market.
The crisis that lives the dollar make many people worry and above all to those that make an analysis of the situation of the foreign currency to bet at forex. The last year a prestigious economist said that the United States made the value of the currency fall so that the European market get mpore expensive, and so protect its history and have no competence. Even if actually the devaluation of the dollar helps the American industry there are many nations that see how, with the dollar, is reducing its value, that’s why some countries have talked in these last days about diversifying their reserves.
All these details must be considered when doing an analysis at forex as the international situation affects the quotation and the movements of the foreign currencies.