EarnForex.com Monthly Newsletter
| | | | Welcome to the latest issue of EarnForex.com newsletter — July 2017. In this issue of EarnForex.com newsletter, I will remind you about the most important Forex-related events of the last month and will also show you the list of the site's latest updates. | | EDITORIAL: Forex Traders Rushing into Cryptocurrencies Ƀ | | With so many Forex brokers adding cryptocurrency trading to their retail accounts, it now appears as some new craze. Should Forex traders jump into cryptocurrency trading? What should they be wary about with these relatively new instruments? The main factor to be cautious about is the high volatility of all cryptocurrencies, including Bitcoin, which despite its age and widespread use can jump up or fall down in price by 30% in a single day. When you add margin here, the results may be quite disastrous. Another thing to worry about is which exchange the broker is using for its reference price. The coin's price can differ substantially across different exchanges. Also, the price dynamics itself may differ significantly as the rate reacts to some exchange-specific news and events. It is a bad idea to analyze the Bitstamp charts on TradingView and then execute the trades on a broker that uses Bitfinex for a reference price. The good thing about trading crypto-CFDs via online brokers is, of course, how simple the whole thing is — you do not need to buy any BTC or ETH, you do not have to deal with the exchanges, you can just short or long the cryptocurrency pair you want and close the position for profit whenever you think it viable. Using the leverage is also a no-brainer when you trade through a broker. With exchanges, it can be quite a complex operation. Another good thing is that shorting is really made easy with CFD products based on cryptocurrencies. Of course, the ability of the cryptos to rally should not be underestimated, but when there is a correction to ride, there is no simpler way to sell the coin short than to use a CFD product offered by your good old Forex broker. Perhaps, it is not the best idea to jump head first into cryptocurrency trading with your FX broker, especially if you are new to the world of the blockchain assets. However, it can be a good opportunity to profit from the short-term but large-scale movements in Bitcoin or altcoins, as well as to temporarily hedge your big investment in some cryptocurrency when there is a panic in the market. | | Overview of the major currency pairs' performance in June | | EUR/USD — fell down during the first half of the month but rallied strongly in the second one. It was at the maximum at 1.1445 on June 29, at its minimum at 1.1118 on June 20, finishing the month at 1.1424. GBP/USD — declined during the first half and recovered during the second half of June. The highest monthly rate was at 1.3029 on June 30, while the lowest — at 1.2589 on June 21. GBP/USD finished June trading at 1.3021. USD/JPY — dropped during the first trading week of the month and then entered a rally. The pair rose to as high as 112.92 on June 29, reaching a bottom at 108.81 on June 14 and closing the month with the 112.27 rate. EUR/JPY — similarly to USD/JPY, fell during the first week to soar high during the rest of the month. The monthly high was at 128.82 on June 29, the monthly low — at 122.39 on June 15. Trading ended at 128.39 for this currency pair. GBP/JPY — behaved just like USD/JPY. The maximum level for this pair was 146.54 on June 30, while the minimum — 138.66 on June 12. The month's trading ended at 146.32 for GBP/JPY. | | Fundamental background of the past month | | June started poorly for the US dollar with underwhelming non-farm payrolls. The long-anticipated testimony of former FBI director James Comey ended with disappointment, revealing nothing particularly interesting about the alleged ties between Donald Trump's election campaign and Russia. Hawkish comments from the Federal Reserve officials gave some support to the dollar, but market participants still doubted that the Fed will be able to continue with its monetary tightening. The European Central Bank sounded dovish in its policy statement released in the first half of the month, sending the euro down. Yet later, hawkish comments from ECB President Mario Draghi made the currency surge. ECB officials tried to downplay the optimism, claiming that Draghi's words were misinterpreted, but that did not bother markets too much. The major event for the Great Britain pound in the first half of June was the snap general election. Prime Minister Theresa May initiated the voting in hopes that it would allow her consolidate power and gain stronger footing in Brexit negotiations, but the actual outcome was completely opposite as the election resulted in a hung parliament and calls for the Prime Minister to step down. Bank of England Governor Mark Carney demonstrated dovishness, saying that it is too early to discuss and interest rate hike. But he changed his tune totally just a week later, signaling that the central bank will likely consider a rate increase in the near future. The Bank of Japan, on the other hand, did not consider dropping extreme monetary stimulus, leading to weakness of the Japanese yen. The Swiss National Bank joined the central banks that signaled about potential stimulus exit. The Bank of Canada followed the trend, closing the doors to the possibility of an interest rate cut. The Australian dollar was getting help from China's positive macroeconomic data, but the currency was hurt as Moody's Investors Services downgraded credit ratings of major Australian banks. The Reserve Bank of New Zealand was yet another central bank that demonstrated hawkishness, which led to speculations about higher borrowing costs in the near future. Gold suffered from a trading error that sent the metal crashing down. The hawkishness of the major central banks was helping bullion initially, driving the US dollar down, but the same optimistic sentiment hurt gold later. | | Interest rate changes in June | | Brazil | 11.25% | -1.00% | 10.25% | | Iceland | 6.50% | -0.25% | 6.25% | | Mexico | 6.75% | +0.25% | 7.00% | | Russian Federation | 9.25% | -0.25% | 9.00% | | United States | 0.75% | +0.25% | 1.00% | You can see the current interest rates by the world's central banks in our interest rate table. | | Two new Forex guides have been published on EarnForex.com since the last issue of the newsletter: You can always browse the previously uploaded guides. | | Three new Forex brokers have been added to EarnForex.com since the last issue of the newsletter: - EverFX — a Cypriot broker that is specializing on big accounts but is also offering standard accounts from $300. 1:500 leverage is available and trading is done via MT4 and with commission per deal.
- ayondo — an FCA-regulated Forex company focusing on social trading. It provides its own proprietary platform and allows trading from $100.
- Ally Invest — a part of GAIN Capital (which also operates Forex.com), it is one of the few Forex brokers available to the US retail traders. TradeKing has been merged with Ally Invest.
You can always view our full list of Forex brokers. | | Top five Forex brokers of the last month | | There were the following important Forex industry news since the last issue of the newsletter: - MetaQuotes Software Corp. announced that the versions of its MetaTrader 4 and MetaTrader 5 platforms released after October 1, 2017, will no longer run on Windows XP, Windows 2003, and Windows Vista. Older builds will continue functioning on those operating systems, but the new builds will require at least Windows 7. The recommended operating system for running MetaTrader is the 64-bit version of Windows 10.
- Turkey bans retail Forex trading with foreign brokers for its residents. Now Turkish citizens may only trade currencies with companies regulated by the country's Capital Markets Board.
| | Until the next newsletter issue! | | That is all for the July issue of the EarnForex.com newsletter. If you have questions, comments or just want to see something else in the next monthly issue, please let us know. | | |
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