User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Tuesday February 22, 2005 - 22:29:07 GMT -

Share This Story:
| | Email

Forex: Dollar Collapses As The Koreans Look To Diversify

DailyFX Fundamentals 02-22-05

By Kathy Lien, Chief Strategist of

· Dollar Collapses As The Koreans Look To Diversify
· Oil Prices Trade Back Above $50 a barrel
· Japan Drops Currency Comment From February Outlook Report


The euro has strengthened significantly against the US dollar following a fresh round of talks about plans for diversifying reserve allocations. Today, Korea joined the chorus of central banks who have already signaled that they will need to diversify their reserves more appropriately to reflect their changing trade activities. As early as last year, we had talked about the emergence of the euro and the retreat of the dollar as a major reserve currency and how this will be a big theme for the currency markets in 2005 and beyond. Although Korea said that they would probably be diversifying to higher yielding currencies such as the Australian dollar, the US dollar’s status as the world’s premiere currency is still at risk. Russia, South Africa, India and other Middle East oil exporters have already been gradually diversifying their reserves. Even George Soros confirmed in an interview this morning that this major trend is mounting. Diversification needs to happen as central banks look to minimize the volatility of their portfolios. The Eurozone as a whole is a major trade partner for many countries. Even China, who has their currency pegged to the dollar, conducts 19% of all of their exporting activities with the Eurozone, which is only marginally less than the 21% of total exporting activities that is conducted with the US. Japan, who is the largest holder of US treasuries, is already exhibiting waning demand for dollar denominated assets. We expect this trend to continue and for it to be another thorn in the side of the US dollar, much like the country’s twin deficits are at the moment.


The dollar weakened against the majors as a stronger than expected Conference Board consumer confidence report got lost in the wake of all of the excitement generated by Korea and the sharp rise in oil prices. According to a study conducted by a Professor at the University of Rochester, the weaker significance of confidence reports could be tied to the report’s inaccuracy in predicting the spending patterns of consumers. Meanwhile, crude oil prices surged back above $51 a barrel on colder weather in both the US and Europe. We are now only 8% shy of the previous $55.85 per barrel high that was hit last October. If you recall, the surge in oil prices through the second half of last year was the catalyst that led to a significant slowdown in global growth and tipped Japan back into recession during the fourth quarter. With oil prices rising 15% over the past two weeks, there is once again renewed fear that higher energy costs could take another stab at the global recovery. Tomorrow we are expecting CPI, which is the first piece of key economic data due from the US this week. Fed President Poole was the latest Federal Reserve President to echo the sentiments of Alan Greenspan on inflation. Like his peer Pianalto said yesterday, Poole, who tends to lean more towards hawkish monetary policy, also believes that inflation is “well contained for the time being.” This suggests that tomorrow’s CPI report could be tamer than the market may expect and that any upside surprises would be only temporary.


With no economic data releases today, the remnants of upside momentum from yesterday’s upbeat Rightmove house data and climbing bullish sentiment looks to have contributed to the move higher by the British pound. Breaking through key psychological resistance at $1.90 and $1.91, the hard currency ended up hovering at the $1.91 price level ahead of the anticipated release of the Bank of England policy meeting minutes and CBI industrial trends survey tomorrow. Already expected to include less hawkish undertones, market players will be scrutinizing rhetoric issued by policy makers in gaining any foresight into the possibility of interest rate increases in the short term. Furthermore, topics on tepid industrial and manufacturing sectors will also be contemplated in light of higher earnings and a tight labor market before jumping to any conclusions. Additionally, participants will also be reviewing the CBI survey, a measure of overall manufacturing sentiment. With a pickup in manufacturing experienced last month, the survey may confirm increased optimism for the sector if released better than expected.


Dollar yen was the biggest mover in the currency markets today falling 1.5% or 150 pips. South Korea’s decision to diversify took significance over the Japanese government’s downgrade of the outlook for consumer spending. The government did however maintain their cautiously optimistic outlook for the Japanese economy, but more importantly dropped the line that said that the currency markets will need to be watched with caution. It is actually very significant given the lack of intervention by the Japanese government since the first quarter of 2004 and the gradual slowdown of US treasury purchases by the Japanese. Although Japan has been very quiet about this, it is a trend that we are monitoring very closely. Especially since South Korea is one of the first countries in the Asian region to announce their plans for diversification. We believe that the volatility and weakness of the US dollar is also a problem that is making many other countries in Asian region equally uncomfortable.


Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Mon 23 July 2018
A 14:00 US- Existing Homes Sales
Tue 24 July 2018
AFlash PMIs
Wed 25 July 2018
A 08:00 DE- IFO Survey
A 14:00 US- New Homes Sales
A 14:30 US- EIA Crude
Thu 26 July 2018
AA 11:45 EZ- European Central Bank Decision
A 12:30 US- Weekly Jobless
A 12:30 US- Durable Goods
Fri 27 July 2018
AA 12:30 US- GDP
A 14:00 US- Final University of Michigan

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map

Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105