During the global financial crisis, one might question whether currency markets followed traditional patterns. Now according to the Guardian U.S. dollar slides as other currencies strengthen.
The dollar hit its lowest level in more than four months against a basket of major currencies on Wednesday, continuing its slide as investors stuck to the view that the worst of the global financial crisis had passed. That reduced safe-haven demand for the dollar and bolstered assets perceived to have higher risk, such as emerging market currencies, including commodity-based units such as the Australian and New Zealand dollars.
This view that the Fundamentals Are Returning to Currency Trading was a widely held view:
Not only did the currencies rally versus the dollar yesterday, but gold and silver took part in the proceedings too! It’s been a long time since we’ve seen this happen. For the most part, whenever the currencies (minus yen) rallied, gold would back off, and vice versa… Not yesterday! For the first time in a long time, the negativity toward the dollar was front and center.
A return to more normal currency markets does not reduce the risk involved in currency trading. Trading foreign currencies on margin carries a high level of risk, and may not be suitable for all investors. Before investing in forex currency trading you should carefully consider your investment objectives, your level of experience, and your appetite for risk. You should not invest money that you cannot afford to lose. You should seek advice from an independent financial advisor if you are in two minds about this.
If you do want to get involved in currency trading, then you may well wish to use forex trading software, which can provide all the background knowledge you wish to have and analysis of your trading actions.
With the right forex charts, you can better analyse trading patterns and spot trends and deviations. This ongoing analysis of what is happening in the foreign exchange currency markets is essential if you are to manage the risk that is involved in currency trading.