Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.
Written on February 19, 2024 at 7:29 am, by anakin
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.
Written on February 19, 2024 at 7:29 am, by anakin
As we delve into the economic calendar for the upcoming week, several pivotal events and data releases promise to provide insight into the global economic landscape. From inflation figures to central bank deliberations and purchasing managers’ indices (PMIs), market participants will keenly watch these developments for signals regarding the direction of key economies. Here’s what to expect in the week ahead:
February 20, 2024: Canadian Inflation Rate
Canada’s annual inflation rate surged to 3.4% in December 2023, surpassing expectations and underscoring the persistent pressures on prices. The Bank of Canada had anticipated such an uptick, aligning with its outlook on inflation. Analysts now await the release of January 2024 data, scheduled for February 20, with expectations of a slight moderation to 3.2%.
February 21, 2024: Australia Wage Price Index
In Australia, the wage price index witnessed robust growth, reaching 4.0% year-on-year in Q3 2023, the highest level since Q1 2009. As data for Q4 2023 is set for release on February 21, analysts anticipate another uptick to 4.1%, indicative of sustained wage pressures.
February 22, 2024: FOMC Meeting Minutes
The minutes from the Federal Open Market Committee (FOMC) meeting in January 2024 will be scrutinized for insights into the Federal Reserve’s monetary policy stance. Despite maintaining the Fed funds rate at a 23-year peak of 5.25%-5.5% for the fourth consecutive meeting, Chair Powell hinted at the possibility of a rate reduction later in the year. However, the decision remains contingent upon evolving economic conditions, suggesting a cautious approach to policy adjustments.
February 22, 2024: Flash Manufacturing PMI
On the same day, flash manufacturing PMI figures for Germany, the UK, and the US will provide a snapshot of industrial activity. In January 2024, while Germany recorded a PMI of 45.5, the UK and the US posted figures of 47 and 50.7, respectively. Analysts anticipate slight improvements in the January 24, 2024, readings, with forecasts at 46.1 for Germany, 47.5 for the UK, and 50.1 for the US.
February 22, 2024: Flash Services PMI
Simultaneously, attention will be on the flash services PMI for the same countries. In January 2024, Germany witnessed a decline to 47.7, while the UK and the US saw expansions to 54.3 and 52.5, respectively. Projections for February 22, 2024, point to readings of 48 for Germany, 54.5 for the UK, and 52 for the US.
As markets await these critical releases and events, investors and analysts alike remain vigilant, poised to interpret the data and its implications for economic trajectories and financial markets. The week ahead promises to offer valuable insights into the ongoing dynamics shaping the global economy.
Written on February 19, 2024 at 1:49 am, by anakin
Navigating Inflation with Effective Forex Trading Strategies
Hyper-inflation source: The Wall Street Journal
Imagine a time when a loaf of bread cost just a few cents, and a gallon of gas was a pocket-change purchase. Now, fast forward to today, where those same items can often dent our wallets significantly.
This gradual increase in the price of goods and services over time is what economists term as inflation. It is a phenomenon that has been shaping economies and markets for centuries, and understanding its nuances is crucial for anyone looking to thrive in the world of forex trading.
Understanding inflation
Inflation, often dubbed the silent thief of purchasing power, is a widespread economic phenomenon impacting individuals, businesses, and entire nations.
At its core, it denotes a sustained increase in the general price level of goods and services over time, resulting in a gradual rise in the cost of living and a decrease in the purchasing power of currency.
While moderate inflation is deemed a natural aspect of healthy economic growth, excessive inflation can undermine purchasing power, disrupt economic stability, and impede long-term prosperity.
Understanding the drivers behind inflation is crucial. They include:
Demand-pull inflation: results from demand exceeding supply due to factors like consumer spending and policy changes.
Cost-push inflation: arises from increased production costs passed on to consumers.
Monetary factors: central bank actions, such as interest rate adjustments, impacting inflation.
Supply chain disruptions: global issues causing shortages and price hikes.
Expectations and psychology: influence behaviour, affecting inflation outcomes.
Types of inflation source: Oscar Education
Types of inflation
Inflation manifests in various forms, each with distinct characteristics and underlying causes:
1. Creeping inflation: Characterised by a slow and gradual rise in prices, creeping inflation is typically associated with stable economic conditions and moderate inflation rates.
2. Walking inflation: Walking inflation refers to a slightly faster pace of price increases compared to creeping inflation but remains manageable and does not pose significant economic risks.
3. Galloping inflation: Galloping inflation represents a rapid acceleration in price levels, often reaching double-digit or triple-digit inflation rates. It can erode purchasing power rapidly, disrupt economic stability, and undermine confidence in the currency.
4. Hyperinflation: Hyperinflation is the most extreme form of inflation, characterised by astronomical inflation rates, often exceeding 50% per month. It results in the complete breakdown of the monetary system, rendering the currency worthless and causing severe social and economic upheaval.
How inflation affects currency values
Understanding how inflation affects currency values is essential for forex traders.
Purchasing power of the US Dollar source: Visual Capitalist
As inflation rises, a currency’s value typically decreases due to the erosion of its purchasing power. This decreased attractiveness prompts investors to seek higher returns, leading to a decline in the currency’s value.
Conversely, currencies from nations with low inflation or stable prices often see increased demand, which strengthens their value against others.
However, this relationship is not always straightforward, as a range of factors like interest rates, economic growth prospects, geopolitical events, and market sentiment can also influence exchange rates.
Role of Central Banks in managing inflation
Central banks play a vital role in managing inflation through monetary policy tools like interest rates, open market operations, and forward guidance.
Inflation targeting frameworks, where central banks set explicit targets, are widespread in many countries.
US Fed inflation targeting vs real inflation rate source: The Real Economy Blog
For forex traders, monitoring central bank decisions is crucial; using tools like the Economic calendar helps anticipate and react to actions swiftly.
Hawkish policies, like interest rate hikes, strengthen a currency, while dovish measures, aiming to stimulate growth, may lead to depreciation as investors seek higher returns elsewhere.
Indicators and metrics to monitor inflation
Inflation serves as a vital gauge of economic health, influencing policy decisions and investment strategies.
US inflation indicators source: Euromonitor
Consumer Price Index (CPI)
CPI tracks changes in household goods and services prices, indicating consumer inflation. Higher CPI signals rising inflationary pressures, potentially leading to currency depreciation.
Producer Price Index (PPI)
PPI tracks changes in producer prices, reflecting upstream inflation trends. Rising production costs may translate into consumer price hikes and inflationary pressures.
Core vs Headline Inflation
Core inflation excludes volatile items like food and energy, offering a stable measure of underlying inflation trends. Comparing core to headline inflation helps filter out temporary fluctuations.
Other Economic Indicators
Monitoring unemployment rates and GDP (Gross Domestic Product) growth provides insights into inflationary pressures and broader economic conditions. High unemployment may dampen wage pressures and inflation, while strong GDP growth may signal inflationary tendencies.
By analysing these indicators, forex traders gain a comprehensive view of inflation trends and their impact on currency values.
Strategies for Trading in an Inflationary Environment
Adapting to inflationary shifts in the forex market requires strategic manoeuvres. Here are concise strategies for traders:
Stay informed about inflation across economies, analysing data releases and central bank announcements for accurate trend anticipation.
Incorporate CPI, PPI, and core inflation into fundamental analysis for insights into economic health and currency values.
Mitigate risks by adapting strategies: adjust position sizes, set stop-loss levels, and diversify portfolios for effective risk management.
Hedge against inflation by strategically positioning in currencies and assets poised to appreciate, such as those from countries with strong inflation-fighting policies or inflation-resistant currencies like gold.
Implementing these streamlined strategies enables forex traders to navigate the complexities of an inflationary market with precision and confidence.
In conclusion, navigating forex trading in an inflationary landscape requires a nuanced understanding of how inflation impacts currency values.
By recognising the relationship between inflation and currency dynamics, utilising key indicators, and implementing strategic approaches, traders can effectively navigate the challenges and opportunities presented by inflation in the forex market.
Stay informed, stay adaptable, and integrate inflation analysis into your trading strategies to enhance your chances of success in the dynamic world of forex trading.
Written on February 16, 2024 at 9:54 am, by anakin
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.
Written on February 16, 2024 at 7:54 am, by anakin
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.
Written on February 16, 2024 at 7:51 am, by anakin
Recent Surge: Gold prices climbed back above the crucial $2,000 mark, driven by a weaker U.S. dollar and lower Treasury yields following disappointing U.S. economic data.
Economic Data Impact
Retail Sales Data: January’s U.S. retail sales showed a 0.8% decrease, signaling a potential slowdown in household consumption, contrary to the expected 0.1% decline.
Federal Reserve’s Policy Dilemma
Inflation Concerns: Despite weak consumer spending, the Fed’s decision-making is complicated by inflation rates exceeding the 2.0% target, showing significant persistence.
Upcoming PPI Report
Key Indicator: The U.S. Producer Price Index (PPI) for January is anticipated, with expectations of a decrease to 0.6% year-on-year. This data is crucial for forecasting the Fed’s moves and gold’s future price direction.
Implications for Gold Prices
Potential Outcomes: A subdued PPI may favor gold prices, while an unexpected increase, similar to recent CPI data, could lead to higher yields and a stronger dollar, negatively impacting gold.
STOCK MARKET:
Record-Breaking S&P 500: The S&P 500 hit a new all-time high, showcasing the market’s strong recovery from recent setbacks, with a notable increase of nearly 0.6%.
Dow Jones and Nasdaq Gains: The Dow Jones Industrial Average rose by 0.9%, adding almost 350 points, while the Nasdaq Composite grew by 0.3%, indicating widespread market optimism.
Overcoming Inflation Concerns: Despite initial market turbulence following a report of higher-than-expected inflation, comments from Federal Reserve officials have helped to calm market fears, contributing to the recovery.
Retail Sales Impact: January’s retail sales dropped by 0.8%, sparking debates about consumer spending resilience and the possibility of the U.S. economy achieving a “soft landing” amidst inflationary pressures.
Market Resilience: The recent market rebound, following a sharp drop, underscores the underlying strength and resilience of the stock market, despite concerns about potential economic slowdowns and the effects of inflation.
The above data is for reference only, please refer to the MT4 and MT5 software for specific data.
Friendly reminders:
1. All specifications for Shares stay the same except leverage during the mentioned period.
2. The margin requirement of the trade may be affected by this adjustment. Please make sure the funds in your account are sufficient to hold the position before this adjustment.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.
Written on February 16, 2024 at 3:15 am, by anakin
The U.S. dollar stabilizes after its surge post-CPI data, with the DXY index fluctuating near the break-even point.
A lack of further gains does not imply a weakening of the bullish sentiment.
Focus on technical analysis for EUR/USD and USD/CAD pairs.
Insights on Trading Dynamics
Post-Tuesday’s rally, the U.S. dollar displays hesitation, oscillating slightly but remaining steady around the 104.80 mark.
The continuation pause in the uptrend suggests a normal breath after significant gains, rather than a shift in market belief.
Considering broader economic indicators, persistent inflation could influence the Federal Reserve to postpone or minimize rate cuts, potentially supporting the dollar’s upward momentum.
STOCK MARKET:
Stock Market Analysis
Despite a significant sell-off, the stock market displayed resilience, hinting at underlying strength.
The Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) experienced sharp declines, yet signals of market fortitude were evident.
Market Insights
The market’s reaction to a higher-than-anticipated inflation report led to one of the worst trading days of 2024, yet not without signs of resilience.
Strategists noted the pullback could be a natural correction following a sustained period of gains.
Investors actively sought opportunities to buy the dip, indicating confidence amidst volatility.
Technical and Strategic Perspectives
The S&P 500 avoided a significant daily drop, showcasing its stability.
The Russell 2000’s performance above its 50-day moving average underscores market resilience.
Market strategists suggest the sell-off might reflect profit-taking rather than a fundamental shift in market dynamics.
Federal Reserve and Inflation Outlook
A Fed official emphasized the importance of not overreacting to a single month’s inflation data, highlighting a trend of decreasing inflation.
Adjustments in Fed rate cut expectations reflect shifting market sentiments, yet some analysts maintain a cautious outlook on immediate policy changes.
Economic and Market Narratives
Despite inflation concerns, positive earnings reports and economic resilience continue to underpin market optimism.
Analysts suggest the market’s foundational story remains unchanged, with expectations for continued soft-landing dynamics in the economy.
VT 
