• June 20, 2009

Top 5 Middle East rapports for fundamental analysis

The Middle East is one of the most volatile regions of all, as well as being a major player in the crude. It is one market that a savvy business man needs to always keep on monitoring. As crude oil moves out of the Middle East in large quantities, the foreign exchange market in that particular region is quite dynamic and it goes on to influence other world markets.

* Major foreign currency traders in the Middle East foreign currency market trade in the Euro/US Dollar currency pair, and this is therefore a significant activity to look out for. In the third quarter of 2008 for example, the Euro/US Dollar currency pair accounted for 58% of the currency volume traded through the dbFX. This was majorly influenced by the global financial crisis hitting the US and the European markets. These currency volumes were an indication of traders trying to take advantage of the volatility of the market. During the same period, the Sterling/Japanese Yen was third placed recording in the neighborhood of 9.5% of overall volumes.

* According to dbFX Global Director for the Deutsche Bank, this observation leads to the indication that the Middle East Forex clients are attracted to currency pairs with a tight spread. This seem to offer the best trading strategy prospects. Since many Middle East traders have investments in Europe, they are quite comfortable trading in the Euro. More investors in the Middle East are entering the foreign exchange markets as the global equity and bond markets continue to experience negative growth.

* Investors are able to trade in an asset class with a large liquidity, as can be shown by parallels drawn with the NYSE Euronext $156 billion turnover and the world’s currency markets $3.2 trillion day (in turnover).Another benefit of the forex markets is that they’re open 24 hours a day, 7 days a week giving the investor a consistency in accessing the market. They are an easy and cost effective investment method with online platforms for access to the market.

* One always has to check out for entities trading against them as this could put a major drag on your daily revenue and with people and organizations wanting to influence the crude prices in order to satisfy the shareholders and take care of the bottom line, this is a frequent scenario. Currencies often face resistance in the markets because of this phenomenon.

* Traders mostly work on their intuition, and as long as one wants to keep up with the game, you always have to check the right combination of indicators as well as rely on their gut instinct. This includes checking the values at which the currencies are trading against each other on the market as well as the sentiments of major players. It is also nice to keep to the fundamentals. This way the trader can always check with the technical details given and be able to pull off a profitable trade. Hiring a professional who is familiar with the market is also a prudent move.