G7 Meets in Rome
The G7 meeting taking place in Rome this weekend is being watched closely by Forex traders seeking new forex investment opportunities in a volatile market. Many forex brokers were betting that the G7 conference will address what many consider to be the excessive strength of the Japanese Yen.
Markets React to US Stimulus Plans
The US dollar was lifted by the announcement by the US government of a plan to subsidize mortgages for homeowners and prevent default by economically troubled homeowners. Stock and commodity markets reacted positively to the news lifting shares on Wall Street and creating forex opportunities for brokers and investors. This weekend forex brokers and investors will shift their attention to the ongoing G7 conference which will undoubtedly affect currency markets and forex investment opportunities.
Japan to React to Excessive Currency Moves
Japanese Finance Minister Shoichi Nakagawa said that the Japanese government would act against excessive currency moves but said that singling out the Yen during the G7 conference would not work due to the spreading global economic crisis. Omer Esiner of Ruesch International stated, “People are selling the yen because I think investors are positioning in case the G7 mentions the currency as being too strong. It may a be a long shot, but I think that what’s keeping the yen weak.”
Investors Seek High Yielding Currencies
UK Chancellor of the Exchequer Alistair Darling indicated that any discussion of foreign exchange by the G7 conference would be “in general terms.” The Yen has fallen 1.4% in 2009 but in 2008 the Yen gained 23% due to the Yen’s safe haven status. Friday’s short lived return to risk taking provided many with forex investment opportunities provided by higher yielding currencies and emerging currencies such as the Brazilian Real.
Lloyds Banking Group Announces 8.5 Billion Pound Loss
The Pound fell after falls in UK bank stocks and after Lloyds Banking Group revealed a large loss related to Lloyds HBOS division. HBOS lost approximately 8.5 billion pounds in 2008 which sent Lloyds shares plummeting putting pressure on the Pound and any forex opportunities it may have provided.
US Markets Closed on Monday
Many analysts believe that currency markets will take their cue from equity markets. Equity markets got a lift last week from the news that the US government is going forward with its plan to subsidize mortgages which in turn benefited forex markets and provided many with forex investment opportunities. Trading is expected to be light on Monday with US markets closed for President’s Day.