Warning, Currency Consolidation Ahead

Wall Street advanced sharply last week asBear Bet: You would buy a bear bet if you believe
investors interpreted minutes from the Federalthe underlying security/index/currency pair will be
Reserve's last meeting, as an indication that thelower than a certain level (also referred to as the
central bank is going to keep cutting interest ratesbarrier level) on the maturity date. Example: [Pays
in order to boost the economy. The Dow Jones100 if the FTSE closes lower than X on date T]
industrial average, and Standard & Poor's 500Expiry Range Bet: You believe that the market
index, reached new record highs. Leading thewill be between two distinct levels (high and low)
charge has been the high tech Nasdaq 100, withon the expiry date. Example: [Pays 100 if the
companies such as Google, Apple and RIMFTSE closes between X and Y on date T]
(Blackberry) powering to record levels. ManyBarrier Range Bet: You believe that the market
questioned Google's IPO price of $100 per share,will never touch two pre-determined barrier levels
but with a share price above $600, Google(high and low) before or on the date the bet
continues to grow at an astonishing pace saysexpires. In other words, when you buy a barrier
Michael Wright ofrange you will win only if the market never
The minutes from the Federal Open Markettouches the two barrier levels you have chosen.
Committee's September 18th meeting revealedExample: [Pays 100 if the FTSE never touches X
that Fed governors voted unanimously for aand Y between today and date T]
half-point cut. The minutes also showed thatDouble Touch Bet: You believe that the market
officials were concerned that weakness in thewill touch two pre-determined barrier levels (high
dollar, could lead to higher inflation. Balancedand low) before or on the date the bet expires. In
against this were fears that the summer's creditother words, when you buy a barrier range you
crisis could still pose a significant risk to economicwill win only if the market touches both of the
growth. The market interpreted this as meaningtwo barrier levels you have chosen. Example:
that the Fed is willing to intervene with a rate cut.[Pays 100 if the FTSE touches both X and Y
Many believe the likelihood of a second cut eitherbetween today and date T]
in October or at the December meeting seemsUp or Down Bet: You win if the market touches
greater than before the minutes were released.either of two pre-determined barriers before or
Furthermore, the president of The Federalon the date the bet expires. Example: [Pays 100 if
Reserve Bank of St. Louis, William Poole saidthe FTSE touches either X or Y between today
during a speech on Tuesday, that he believes theand date T]
financial markets are "still fragile" from weakeningDouble Up Bet: A Double Up bet pays two times
credit conditions, but that they do appear to bethe premium if the market rises above a given
stabilising. San Francisco Federal Reserve Banklevel between the time of purchase and the close
President Janet Yellen, said in a speech, the centralof trading. It expires at the close of business on
bank must focus on "how financial marketthe day of purchase of the bet. Example: [Pays
developments are likely to affect employment,100 if the FTSE closes above X between now
output and inflation."and the close of trading today]
All this doesn't look good for the US dollar, whichDouble Down Bet: A Double Down Bet pays two
has lately suffered major losses against all majortimes the premium if the market drops below a
currencies. As of writing, the Canadian dollar isgiven level between the time of purchase and the
worth more then the USD, for the first time inclose of trading. It expires at the close of
more then 30 years.business on the day of purchase of the bet.
The Euro/USD is currently in consolidation modeExample: [Pays 100 if the FTSE closes below X
after breaking the 1.40 barrier in August of thisbetween now and the close of trading today]
year, and Sterling is trading above two dollars to11.10.07, Svetlana I
the pound.;л(а):
This time a rate cut, if it comes, may not be as
unexpected, and so might not create as volatile aсынок!
move as it did after the last one. After theЯ так и
excitement of September, and with the next USне
rate cut potentially already priced in, it may be,
time for some consolidation on the currency; нужно
markets.;ь за
With the ECB widely expected to keep rates the;, если у
same going into the New Year, the best point ofтебя
attack may be the EURO/USD exchange rate,есть
which has been consolidating over the past month.на
With the average trader can take advantage ofсчете,
this possible situation with a 'barrier range' bet,; я
which compensates a trader, if a trade doesn't; дать
touch either of two predetermined levels for the;ке эти
duration of the bet. You are predicting that theили
market will remain within two higher and lowerбанк
barrier levels.может
A no touch on the EURO/USD with a 30-day; с
term, and a 500 pip spread either side, yields; счета
around 10%.;ь что
- THE END -там
Contact Details:;я?
Email: Tel: +44 1624 678 883;ю ему и
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Douglas, Isle of Manя моя
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BetOnMarkets Bet Types:;,
One Touch Bet: You would buy a one-touch bet if;? Как
you believe the market will touch a given point at;ь - так и
least once before the bet expires. In other words,,
a one-touch pays out, if at any time prior to; очень
expiration, the market touches or trades throughточно
the specified barrier. Example: [Pays 100 if the;, а не
FTSE touches X between today and date T]так:
No Touch Bet: A no-touch bet is the opposite of"если
the one-touch bet. You would buy a no-touch betне
if you think the market will never reach a certain;им
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[Pays 100 if the FTSE does not touch X betweenаться
today and date T]не
Bull Bet: You would buy a bull bet if you believeнадо".
the underlying security/index/currency pair will beЦелую.
higher than a certain level (also referred to as theТвоя
barrier level) on the maturity date. Example: [Paysмама.
100 if the FTSE closes higher than X on date T]