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Foreign exchange market 
IUFT: Forex Brokers Offer Spread-Back
EURUSD: Eurozone’s External Trade Boosts
Lower Oil Prices Contribute To Stronger Dollar
Westpac: New Zealand Dollar Keeps Losing Value
NAB: Australian Dollar Will Continue Weakening
Barclays: Swiss Franc Will Continue Weakening
IUFT: Forex Brokers Offer Spread-Back
EURUSD: Eurozone’s External Trade Boosts
Lower Oil Prices Contribute To Stronger Dollar
Westpac: New Zealand Dollar Keeps Losing Value
NAB: Australian Dollar Will Continue Weakening
Barclays: Swiss Franc Will Continue Weakening
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Business And Politics News
Cyprus gets it credit rating cut: possible consequences for investors
04 August 06:36 AM
Over the last year international rating agencies have been depriving some EU countries of their investment attractiveness by cutting their credit ratings. Among those countries are Greece, Ireland, Spain , Portugal and Italy.
Another wave of panic among investors was raised by Moody’s as this rating agency had downgraded Cyprus’s sovereign rating by 2 levels at a time – form A2 down to Baa1. It means that the country’s T-bonds and other securities instantly turned into risky assets for investors.
Which EU countries are currently in the “credit risk zone’ and why?
The common European currency keeps losing its value while the yields of the risky bonds issued by Italy and Spain are growing. According to the experts of Masterforex-V Academy, such processes can be explained by the fears that the EU and global economy cannot solve the existing debt problems.
· Italy. Its economy is estimated at $2 trillion. Its sovereign debt has reached $2,45 trillion. Obviously Italy will be saved at the expense of other EU countries because it plays one of the key roles in the EU and eurozone’s economy.
· Ireland, Spain , Portugal , Greece. A couple of weeks ago the Irish T-bond yield grew up to 13,5%, which is a historical record. The Spanish T-bond yield also hit the record. On July 11th it reached the level of 5.8%, the highest level since 1997. In Portugal the 10-year T-bond yield rose to 13.2%. Greece is the frontrunner. Its bond yield is 17.2%.
Now it is Cyprus that has joined the company of risky economies. What is happening with the global economy? What country is next? These days credit ratings are only downgraded, thus affecting the investment attractiveness of the economies. The reasons for a rating cut can be different but the consequences are often the same – growing market uncertainty.
On July 27th Moody’s Investors Service downgraded Cyprus’s rating by 2 levels – from А2 down to Ваа1. The country’s short-term bond rating was also cut from Р-1 down to Р-2, with a negative forecast. The rating agency also made a negative forecast for Cyprus’s economy. According to Moody’s, in 2011 the country’s GDP is expected to show no growth while in 2012 it is expected to grow only by 0.1%.
According to the experts of Masterforex-V Academy, there is a game played in the market of the derivatives issued by Cyprus:
1. In Feb 2011 Moody’s cut Cyprus’s sovereign rating by 2 levels – from Aa3 down A2
2. In March 2011 Standard and Poor’s (S&P) deprived Cyprus of its “А” long-term rating by dropping it down to “A-”.
3. In May 2011 Fitch Ratings cut the country’s long-term rating from AA- down A-
4. Rating forecasts. All the forecasts were negative (a negative forecast means that the rating may be downgraded further).
The reasons for the latest rating cut
1. According to the official statement released by Moody’s, concerns over the consequences of the explosion at the country’s military explosive storage, which took place on July 11th, was the main reason for the rating cut. It should be noted that the devastating explosion killed 13 people and damaged the biggest local electric power plant, which satisfies 60% of the country’s demand for electricity, thus causing a real energy crisis in Cyprus. The president of the country’s central bank reported that after the explosion the economy was in a state of emergency and called on the authorities to take emergency action in order to avoid asking for external financial aid. The recovery work alone is said to cost €1B or 5.6% of the national GDP. Moreover, the energy crisis hit the island at the height of the tourist season, which will inevitably bring major losses to the island’s tourist industry and the entire economy of Cyprus.
2. While making a decision to cut Cyprus’s rating, Moody’s expressed doubt about the ability of the country’s financial system to withstand the escalating crisis in neighboring Greece. If Greece defaults on its debt, numerous Cyprus banks will find themselves on the verge of bankruptcy and will have to ask for governmental support. About 30% of the bank assets (€5B) belong to Greek banks or their affiliates. Besides, the country’s banks are some of the major holder of Greek bonds - €14B. On July 25th Moody's cut Greece’s rating to junk – 3 levels down - Caa1 to Ca, which is one step away from the minimal level C.
3. Another consequence of the explosion was a major political crisis in Cyprus. The opposition instantly started a series of protests, blaming the president and the government for being negligent and asking them to leave.
Rating cut: possible threats for Cyprus.
First of all any loans will be costlier for Cyprus:
1. The rating agencies will force the government to implement a series of structural reforms in the country’s social system and public sector. In other words, it’s about austerity.
2. Probably, the authorities will have to bail out several banks in order to make them less dependent on the Greek crisis.
3. There probably won’t be any major changes in the country’s taxation system because the authorities won’t ever want Cyprus to lose its status of “offshore heaven”, especially as rating cuts usually have almost no impact on the offshore business.
Market Leader and Masterforex-V Academy would appreciate it if you could participate in a survey. Please, visit the Academy’s forum and answer the question given below:
Should US rating agencies be trusted?
· Yes, they should. They perform an in-depth analysis for any certain country.
· No, they shouldn’t. They only aggravate the situation.
· Your own opinion
You are free to discuss this article here: forum for traders and investors
Freedom House Releases “Freedom of the Press 2012”
Not so long ago Freedom House published its report called “Freedom of the Press 2012”. According to it, 197 countries of the world are divided into 3 groups: free, partially free and not free. Lets’ find out how objective this rating is.
Publication date: 11 May 06:40 AM
US Government Bonds Traded Within Flat
Stock exchange news. US Treasury has published a report about Small Business Lending Fund (SBLF) program for the 4th quarter of 2011. Lending has risen for over a third in comparison to the 3rd quarter and has amounted to 4.8 bln. dollars.
Publication date: 13 April 09:48 AM
Croatia: Economic And Investment Outlook.
The global financial crisis, which started in 2007 as the collapse of the US housing market, destabilized the global economy, thus diminishing the inflow of foreign investments in numerous countries around the world and affecting numerous industries, including tourism.
As for Croatia, tourism was a major “breadwinner” for the country’s economy until the breakup of Yugoslavia in 1990. The civil war almost destroyed Croatia’s tourist infrastructure. It has been recovering since 1997. Croatia is getting more and more popular with tourists…
Publication date: 05 April 03:17 PM
Tips For Investors: Is It Worth Investing In Vietnam?
As investors keep withdrawing their capital from Greece, Italy, Spain and other eurozone economies, a natural question arises: Where to invest the money?
There must be some countries around the world where a favorable investment environment is being formed, thus leading to an unexpected and powerful economic breakthrough like in Japan (1960s-1970s), China (1980s), or in Brazil, Turkey and Indonesia (1990s). One of such countries is Vietnam .
80% of Vietnam ’s territory is occupied by mountains. This is an agricultural country, with urban citizens constituting 30% of the country’s population. This is a big but relatively poor state. The GDP per capita is as low as $3100, which makes Vietnam occupy the 166th place in the global rating.
However, not everything is that gloomy. According to the Asian Association of Traders and Investors under Masterforex-V Academy, Vietnam has made a powerful economic breakthrough over the last decade, thus increasing its influence in the region. According to Bloomberg, the Vietnam economy is Asia’s 3rd most promising economy after China and India.
It is highly probable that in a couple of decades we will be talking about a “Vietnam ese economic miracle”.
What makes Vietnam so attractive for investors?
Publication date: 04 April 10:51 AM
US Investment Funds: Winners And Losers
US investment funds have always been popular with investors from around the world. Let’s look at their financial performance in Jan-Feb 2012 to determine the winners and losers.
Which US funds showed the highest gains in early 2012?
Obviously, every single investor looks for profitable investment opportunities. Last year wasn’t a good one for investment funds. Some US investment funds reported major losses. The aggregate loss reached $123B. Paulson&Co lost $ 9.6B. This is the biggest fiasco since the collapse of Long Term Capital Management.
All investors are concerned about profitability. Most investors understand that the financial world has changed forever, with super incomes sinking into oblivion. Today’s most popular investments are standard and classic assets with the average ROI of 10-20%.
The biggest winners as of February 2012:
Publication date: 27 March 11:53 AM
US Banks Passed Stress Tests
US bankin gnews. Stress tests for banks may be called one of the key moments of this week. On Tuesday FRS announced the results of stress tests for banks. Reports show that the majority of large-scale US banks are able to fulfill their obligations in extremely non-favourable economic circumstances. The situation may then develop in the following way:
Publication date: 23 March 10:16 AM
Tips For Investors: What Is True And Delusive About China’s Strength And USA’s Weakness?
As numerous economic issues become more evident, investors keep pondering on the struggle between the USA and China for the status of the world’s most powerful economy. The USA has been the most powerful economy in the world for the last 70 years (it succeeded the weakened UK after WWII), adjusting the world for its own needs (from making the US Dollar the global reserve currency to spreading “democratic values” around the world, both in politics and culture).
However, everything changes. More and more experts start questioning the USA’s ability to preserve its global leadership. Maybe it is time for China to take over the initiative?
Publication date: 19 March 04:08 PM
PAMM accounts: Whose Service is Better?
News of forex broker rating. PAMM accounts have entered the lives of traders and investors suddenly and powerfully, as they managed to involve into work at forex market even those who… do not know how to trade here. Due to PAMM accounts, even those investors that are far from technical and fundamental analysis receive a very simple and clear way for their direct and often highly profitable investments: from the long list of best traders they are to choose the ones, whose results they find satisfactory and invest their means into his account. In such a case (provided that such warranty is given by a broker company) gained profit will be automatically distributed between trader and investor on a monthly basis.
Publication date: 13 March 08:09 AM
Why is "Market Leader" Banned by Uzbekistan Government?
Uzbekistannews. For decades much was banned in the USSR, from the books of Solzhenitsyn to "Voice of America" and "Radio Liberty", and the stronger were the appeals of communist ideologists to the party consciousness of Soviet people, the more attentively sensible people were listening to and reading what was banned. No fruit is so highly desired and sweet as the one that is banned.
The government of Muslim Uzbekistan does not seem to understand this biblical truth, having recently followed "the best traditions of former USSR" and banned initially "Radio Liberty", then Wikipedia (in Uzbek), and now the leading CIS portal for traders and investors "Market Leader" after its publication, jointly with "Ozodlik Radiosi" (Radio Liberty in Uzbekistan), of analytical article "For Investors: Who is Dearer to Russia Around CIS? What are the secrets of Russian and Uzbek relationships?" What frightened President Karimov?
Publication date: 10 March 09:07 AM
Islamophobia: Real Enemy Or Western Fiction?
The leading western mass media - The Guardian, The Financial Times, The New York Times, Forbes – revealed the shocking results of the report by Triangle Centre on Terrorism and Homeland Security, which specializes in studying terrorism and national security.
According to the report, it turns out that Islamists present little threat to the US national security. In 2011 only 20 US Muslims were accused of terrorism. Out of 14 000 murders committed in the USA in 2011, none was committed by a terrorism suspect. The bottom line is that the US Islamophobic sentiments are groundless. At least this is what numerous journalists and political scientists say.
Meanwhile, Islamophobia has turned into a major concern in the USA. Muslims are more frequently treated as enemies.
Publication date: 05 March 06:52 AM