Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

mohsinqureshii

2013 Review: The Year of the Taper

Recommended Posts

The big focus for the forex markets in 2013 was on whether or not the US Federal Reserve was going to start tapering its $85 billion a month bond purchases. It hinted at its meeting in May that it wanted to start reining in its quantitative easing programme unleashing considerable volatility.

 

After some poor communications, volatility and speculation the Fed finally announced in December that it would start tapering at a rate of $10 billion a month. In retrospect it communicated the event well as the markets took it as good news – a sign that conditions are returning to normal.

 

Nonetheless, the run up to the taper saw many emerging market currencies take a hit particularly in countries with large current account deficits, which had become dependent on the Fed's largess.

 

attachment.php?attachmentid=37522&stc=1&d=1388165694

 

The Euro – a surprise winner

 

Surprisingly, the EUR turned out to be one of the best performing currencies in 2013. On Dec 23 the EUR was 103.79 versus a basket of 21 currencies, compared with 99.22 the same time a year ago. And 2013 didn't start particularly well for the single currency.

 

Amid the usual concerns over the state of the peripheral Eurozone economies one them, Cyprus, had to be bailed out to the tune of EUR 10 billion in March. The political furore which accompanied the whole episode reignited concerns over contagion and even a break-up of the EUR. The Eurozone pulled through and as the year wore on it appeared that the leading peripheral Eurozone economies were beginning to stabilise and even show signs of growth.

 

Meanwhile, German chancellor Angela Merkel, considered by many to be the Eurozone's real leader, won a decisive election victory. Also, the Eurozone managed to make some slow progress on a bail-out mechanism for failing banks.

 

USD shrugs of political paralysis

 

USD was also a star performing currency despite a show of very divided politics in the US, which led to a government shut-down in October 1-16. Democrats and Republicans were eventually able to come to a longer-term agreement over the US budget heading off another damaging shut down in the new year. Against a basket of the major currencies USD was 76.33 versus 73.12 the same time a year ago.

 

But while the politicians were busy arguing the US economy was recovering as was the key real estate market. This enabled the Fed to announce the start of its tapering – a very bullish event for the USD. Also, Janet Yellen was nominated to takeover at the Fed from Ben Bernanke on January 31, 2014. It will be her job to see through the end of quantitative easing, which is unlikely to be a smooth process.

 

Abenomics hammers JPY

 

Whilst the Fed was shifting to taper mode the Bank of Japan was just getting started in a bid to banish deflation and restore growth to Japan. The policy became known as Abenomics with the BoJ aiming to double the country's money supply. JPY was also a target for Japanese officials who desired a rate of UJSD/JPY 100. They got their wish. By late December it was flirting with levels of 104 and looks set for further weakness.

 

UK recovery gather pace

 

The UK economy in 2013 looked its best in five years. With an eye on elections in May 2015 the UK government initiated a series policies to stimulate the all important real estate market and eased up a bit on its austerity measures.

 

Towards the end of 2013 the economy was growing at an annualised rate of 1.9% and real estate prices were rising strongly. This led to the Bank of England deciding not to extend its quantitative easing programme beyond GBP 375 billion. In June, former Canadian central bank governor Mark Carney took over at the Bank of England – the first foreigner to do so.

 

Cable is looking to finish slightly higher than this time last year following a rocky performance between March and August.

0ed58beed1d383d5c128c180bf38b27f.jpg.f554dee72e70001be1e0a8fd257bb3d3.jpg

Share this post


Link to post
Share on other sites

The UK economy in 2013 looked its best in five years. With an eye on elections in May 2015 the UK government initiated a series policies to stimulate the all important real estate market and eased up a bit on its austerity measures.

 

Try telling this to anyone here in the UK; the FTSE is at pre-crash levels, property is at an all time high, borrowing money is cheap and getting easier again, retail has picked up . . . But something doesn't quite feel right. There's no 'exhuberance' in the UK economy.

 

Is this as good as it gets nowadays? Are we in clover?

 

BlueHorseshoe

Share this post


Link to post
Share on other sites
Try telling this to anyone here in the UK; the FTSE is at pre-crash levels, property is at an all time high, borrowing money is cheap and getting easier again, retail has picked up . . . But something doesn't quite feel right. There's no 'exhuberance' in the UK economy.

 

Is this as good as it gets nowadays? Are we in clover?

 

BlueHorseshoe

 

It's great and better for some and the same or worse for others. It never feels the same.

Share this post


Link to post
Share on other sites

yes, the focus was on the taper, equity markets tumbling even on the mention of a taper.........and the taper came.........and the stocks went up some more

 

the beauty of trading fundamentals I guess.....as at any one time an explanation can be found

 

TW

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Similar Content

    • By sergio
      Hi,
      We are doing a university job where we must investigate how banks manage their financial products that require trading, for example, they offer a fund, as they manage capital internally. Could you help me?
      Thank you!
    • By millonmethod
      Hello everyone!
      I am an advanced trader, with many years of experience (about 15 years - 10 living exclusively from this)
      I am going to give you some tips that you must know:
      There are going to be many people who tell you that trade is easy, that with only crossiing a line  with another one you will win a lot of money.... and that´s not true.  No, Sir, reality is far away from that. Many people who start arrive here with the hope that someone "gives them" a free method, they watch youtube videos thinking that this will give them the "strategy" and in a few days they realize that it does not work for them - they lose money - and then They go looking for a new one ... and so on. YES, IT´S TRUE YOU EARN IN TRADING, A LOT. BUT THINK: for a few to win (10% + any BROKER) many others must lose (90% people). YOU MUST HAVE A MONEY MANAGMENT FORMULA ( you can email me) People study so many years to live on this, not because they are dumb, but to know what they do, when, and have absolute effectiveness. It´s very easy to get lost here: do not disperse, jumping from one to another strategy WILL NEVER give you money, it will only waste your time and make you nervous when trading. PEOPLE WHO CHANGE THEIR METHOD CONSTANTLY : LOOOOSE ALWAYS.   If you have the knowledge to develop it, take your time and do it.  Always try it first on DEMO for at least 2 weeks! If not: search to buy a solid strategy (no you tube videos pleassse ! Avoid losing money! ) This is like any business, it requires some capital to start (capital = money in the broker + solid made /purchased strategy) If you are lost: I RECOMMEND YOU NOT TO WASTE TIME IN YOUTUBE, JOIN PEOPLE WHO HAVE EXPERIENCE AND IF YOU ARE GOING TO BUY A METHOD ... PLEASE !!!! DO NOT BUY 10 BAD AND CHEAP METHODS, SAVE MONEY AND BUY ONLY 1 BUT EXCLUSIVE AND MUST ALLWAYS HAVE SUPPORT !!!!!  Do not buy Signals! They never keep up with constant profits! One week will win and the next will lose. Nothing that does not depend absolutely on you will give you the money you are looking for. And if you do not have a strategy (made or purchased) do not even try PLEASE PLEASE PLEASE: DO NOT USE REAL MONEY! AT LEAST 2 WEEK DEMO FREE HELP HERE!!!!!  IF YOU FOLLOW MY ADVICE YOU WILL BE PART OF THAT 10% WINNER, email me.
      Have a nice trading day
       
       
    • By Georgebro8
      So I've been 18 for about 4 months, since I turned 18 I started up an account, and basically thought I was doing amazing because of beginners luck, put in some of my savings and managed to do well, some days I would make £200, one day I even made £900, after time I lost my profits and made a loss as well. I've realised I need to spend the time analysing the market and making technical judgments. I'm trying to read more and spend a lot of my time looking at the charts. is there any advice people can give me. and is making 5% a week a realistic goal to set myself? before anyone assumes that im looking for a get rich quick scheme, im certainly not, I see every loss ive made as a lesson and ensure that I learn from each mistake I make. 
      any advice about indicators, strategies, how to analyse the market, or even analysing earning reports would help me.
    • By jason.lee
      Does it mean that you are an expert just because you make a lot of profit? The amount of profit cannot be used to measure the value of a trader. Yes, you must be doing something right if you are making a frequent profit. However, that does not determine if you are an expert or not just by your profit. This is quite a common misunderstanding in the forex industry.
      Making a large profit is only one side of the forex market. Majority of forex traders tend to lose most of the time after they have experienced profit. But why?
      So many traders fall into a fantasy land where they make an endless amount of money at the beginning. Many beginner traders tend to gain profit at the start not knowing the importance of technical analysis of the market.
      The experts on the other hand who stayed became wealthy and stayed that way, continue gaining profit, are all knowledgeable when it comes to the basics. Experts have dialed many ways to control their minds to be set right to be a trader.
      Understanding of the market is a must know anyway. Expert traders wait patiently until the right opportunity comes. Opportunity comes to everyone.
      What differentiates the experts and the beginners is that experts know when the opportunity has come and knows to take advantage of it. Making profit by luck is possible, and yes luck is also very important. But can you profit with luck every time?
      How an expert trader is determined is not by how much the person gained, it’s about the precision and the frequency of results. Profit can’t be maintained by luck. It is maintained and is a result of precision and strategical execution. You shouldn’t worry because you’re not gaining any profit right now.
      You should be building your skill sets to be a better trader by experiencing many trading situations of losses and wins. If you invest in your time to improve, your results are guaranteed to increase more frequently and will become more stable.
    • By mattz
      OEC Trader is now called Gain Trader and the Gain API now allows you to have simultaneous connection to mobile and web. 
      Thanks, 
      Matt Z 
      Optimus Futures www.optimusfutures.com 
      There is a substantial risk of loss in futures trading. Past performance is not indicative of future results. 
  • Topics

  • Posts

    • Thank yyou guys much needed
    • #analysis #forex #followme #socialtrading The #GBPUSD is trading at 1.2410 due to no positive Brexit developments and an on-going Parliament deadlock at the UK. The #UK #PM Boris Johnson’s Luxembourg visit failed to provide any key updates. The EU President criticized the Tory leaders’ depth of details while British Foreign Secretary Dominic Raab reiterated the PM”s pledge to leave on October 31 and also passing the bucket of criticism back to the EU. The #USD stays on the front foot as the recent rise in #safe-haven demand, mainly due to the attacks of Saudi Arabia, joins hands with optimism surrounding the US-China trade talks, up for early October. While the absence of data, except the US Industrial Production for August, is likely in support of carrying the previous move forward, any positive to the UK PM during the first day of hearings at the UK’s Supreme court could help the Cable recover some of its latest losses. #TechnicalAnalysis Unless providing a daily closing beyond 100-day simple moving average (DMA) level near 1.2510, the quote is less likely to rise towards mid-July highs surrounding 1.2580, which in turn highlights the importance of 1.2380 and 50-DMA level of 1.2280 during further declines.  
    • Another Best Broker award for HotForex! Dear Client, We are thrilled to announce that International Finance Awards has named HotForex the Best Forex & Commodities Broker in Latin America! A HotForex spokesman said: “This new award is an excellent addition to our 25+ existing awards and demonstrates our continued success in establishing ourselves as a market leader with global reach, committed to providing our clients with the best possible client-centric trading experience.” Thank you for all your support, and for choosing us as your broker of choice! Kind regards, The HotForex Team
    • #WeekAhead  #forex  #news  #followme  #socialtrading Hey friends! Happy new week. Here are the data highlights for this week: (GMT+8) Monday: 10:00      Chinese industrial production, fixed asset investment and retail sales     Tuesday: 09:30   RBA Meeting Minutes 17:00     German ZEW economic sentiment and 21:15     US industrial production   Wednesday 16:30     UK Consumer Price Index (YoY) (Aug) 20:30     Canada BoC CPI   Thursday: 02:00   US FOMC Economic Projections 02:00   US Fed's Monetary Policy Statement REPORT 02:00   US Fed Interest Rate Decision 02:30   US FOMC Press Conference SPEECH 06:45   AUD Gross Domestic Product (QoQ) (Q2) 09:30   AUD Employment Change s.a. (Aug) 09:30   AUD Unemployment Rate s.a. (Aug) 10:00   JPY BoJ Interest Rate Decision 10:00   JPY BoJ Monetary Policy Statement REPORT 14:00   JPY BoJ Press Conference SPEECH 19:00   UK BoE Asset Purchase Facility 19:00   UK BoE Interest Rate Decision 19:00   UK BoE MPC Vote Hike 19:00   UK Bank of England Minutes REPORT 19:00   UK BoE MPC Vote Cut 19:00   UK BoE MPC Vote Unchanged   Friday: 20:30   Canadian Retail Sales (MoM) (Jul)   #FederalReserve is expected to cut rate about 25-basis point. It would be a major shock if the Fed doesn’t deliver. But some, including Donald Trump, want more than just 25 basis points. In fact, the US President has called for “boneheads” Fed to cut rates to zero or lower in a tweet this week. Understandably, with US data not deteriorating as badly as, say, Germany, the Fed is reluctant to cut aggressively and rightly so. The risk therefore is that the Fed refuses to provide a dovish outlook for interest rates. In this potential scenario, a rate cut might only weigh on the dollar momentarily. With most other major central banks already being or turning dovish, the Fed will also need to be super dovish for the dollar to end its bullish trend. Otherwise, the greenback may find renewed bullish momentum, even if the Fed cuts by 25 basis points.     The #Swiss National Bank will have to say about the #ECB’s decision to resume bond buying, given the recent appreciation of the franc against the shared currency. The #BoJ is unlikely to respond to the #ECB’s resumption of bond buying. It may keep the current policy of controlling the yield curve. For one, the global economy hasn’t deteriorated too significantly to exacerbate deflationary pressures in the export-oriented Japanese economy. For another, the there’s only limited number of policy options left at the BoJ's disposal. Thus, cutting short-term interest rates further into the negative may be an option, but to be used on another occasion.
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.