USD

Yep catnip, I use the currency strength meters, a lot of ingredients go into entry decision making.

My last post made an error on the link. "Bank of International Settlements website at www.bis.com."

The site link should read www.bis.org

And the link for the pdf ishttp://www.bis.org/publ/rpfx10.pdf

This is quite interesting:-


One tends to read a lot of rubbish about Forex market statistics on the internet. However, the one key definitive source to the real facts and figures is the triennial report by the Bank of International Settlements which was last produced a few months ago in December 2010.

Some interesting key facts are as follows.

The total forex market activity has now grown to a daily turnover of $3.98 trillion per day, with spot FX trading accounting for $1.5 trillion turnover per day (spot was $1 trillion per day in 2007).

London remains as the key global Forex financial centre accounting for 37% of global foreign exchange market turnover (up from 36% in 2007), followed by the United States (18%), Japan (6%), Singapore (5%), Switzerland (5%), Hong Kong (5%) and Australia (4%). Trading activity in Germany has dropped to just 2% from 5% a few years ago (I expect because the main German banks such as Deutsche Bank now concentrate their FX trading operations in London).

Interestingly the UK has seen its spot FX trading activites increase by over 100% during the past three years from $335bn to $697bn per day (USA from $311 bn to $473 bn)!

The 20% increase in forex market turnover over the past three years to $3.98 trillion has been mainly accounted for by trading activites by the increased trading activity of other financial institutions which includes activities by hedge funds, pension funds, etc. The increase in global trading activities of the retail investor has also been cited as a significant contributor to growth in spot FX over the past three years, but no specific figures for the retail market have been produced.

It is estimated that High Frquency Trading (HFT) activities by many of the major market players (banks, hedge funds, etc) now account for c.25% of all spot FX transactions.

Some other interesting facts (from the following table) show that the EURUSD remains the dominant traded currency pair increasing its share of daily trading activity by 1% to currently 28% of all Forex transactions. The USDJPY comes in a far second place with a 14% of daily trading activity, whilst the GBPUSD however, has seen a major 25% drop in its market share from 12% in 2007 to just 9% now. The EURGBP however has increased by 60% over the past 3 years, now accounting for 3% of daily global trading activity.

In respect of global FX market turnover the US dollar remains the dominant currency with 84.9% of all currency transactions involving the USD, 39.1% involves the EUR, 19% involves the JPY and 12.9% involves the GBP. The Australian dollar has edged up to 5th place ahead of the Swiss Franc with a 7.6% share in 2010. Regarding the non-major currencies, the Chinese renminbi has seen its share almost double over the last three years to almost 1% of global turnover, on a par with the Indian rupee and the Russian rouble.


If you are interested in reading the c.100 page report in full it can be obtained as a PDF document directly from the Bank of International Settlements website at www.bis.com.

ASHRAF.... What do i do with the usd/chf? Dieing to get long.

New Pip, the US is Canada's biggest trading partner. I doubt the loonie will be allowed to fall too fast, regardless of oil prices. Of course, the SNB couldn't fight the markets forever, so there's only so much a central banker can do.

What's up with risk aversion and the USD declining? Are new dynamics developing? Or is this just QE3 rumors?
Threw in the towel and went long USD/CHF - hoping for a triple bottom, bitter SNB, and a broad rebound in the USD. In retrospect, USD should have been bought against something else - but sometimes it's fun to play with fire when you know you can put it out at some point.