subject: World Financial Markets Boosted by Chinese Monetary Policy [print this page] World Financial Markets Boosted by Chinese Monetary Policy
The Chinese have recently announced that they would ease their currency peg to the US Dollar. The immediate reaction in the world markets was positive. If the Chinese Renminbi was allowed to ease then this would reduce Chinese exports and increase imports. That should help the many key world economies.
The news was also been taken positively in the forex spread trading markets. South-east Asian currencies appreciated accordingly. Majors like the Japanese Yen and Australian Dollar also benefited.
Looking at the UK Stock Market, it looks like investors are speculating that the FTSE 100 will return to the 5250 mark sooner rather than later.
The FTSE seems to be oscillating around this 5250 median level, occasionally attempting a move to the upside around 5290/5300 and likewise to the downside. However neither direction appears to have much follow-through. At the moment, those trading CFDs are reading this situation as glass-half-full and are putting pressure on the market to rise.
As Simon Denham of Capital Spreads recently commented, "In Germany, the DAX 30 is consolidating at the higher levels having given up the new highs for the year. The pull back does not seem aggressive though and the fall seems to have been mainly inspired by the US Markets. Financial spread traders are speculating that the DAX will make a swift return above the 6200 level".
The small falls from recent highs in the global stock market indices are bringing out the buyers. Nevertheless, traders must be cautious, the buying behaviour is not being seen across the whole market. If too many short/medium term investors are seen to be buying there may be pressure to force the market lower. This could create a short-term panic and a classic bear-squeeze.
Investing in the markets can be exciting, particularly when thinking about the amount of money you might make. Profits are rarely seen as a bad thing. Nevertheless, we should all understand that we can lose money as well.
If you speculate on the traditional areas, such as shares, or if you should trade via some of the more modern products, like Contacts for Difference, the risks remain.
There is a whole range of trading options for those who want to invest in the markets. ETFs? FX? CFDs? Stocks and shares? Across the international community, investors are increasingly making use of financial spread betting. Spread betting offers a convenient trading option for both experienced traders and smaller investors.
When talking about investments though, as mentioned above, there are risks. With spread bets you need to be careful because you can lose more than you initially invested.
The following notice covers a couple of pointers that you should note, Spread betting does carry a high level of risk to your capital. Before trading, ensure that spread betting matches your investment objectives. Familiarise yourself with the risks. Seek independent advice if necessary'.
The simple range of markets makes spread betting an option that investors should consider. Spread betting firms generally offer thousands of markets that can span from the popular forex and indices markets all the way to soft commodities like Coffee and individual equities. Naturally you can speculate on markets like the FTSE 100 and the Dow.
And do not forget that Spread trades are not subject to tax*. You are not buying or selling any assets; you are simply speculating on the future market value (based on UK tax law. Tax laws can change from time to time).
