The Bank of Canada announced that it is keeping its target overnight interest rate at 3%.
The bank stated that the 3 major reasons for keeping interest rates steady in July remained in August, namely:
- the course of the U.S. economy
- ongoing turbulence in global financial markets
- sharp increases in commodity prices, the risk identified in
July that these prices could be weaker than assumed has materialized.
Other major points include:
- In Canada, domestic demand has slowed modestly but remains strong
- While total CPI inflation has moved above 3 per cent, core inflation has stayed at 1.5 per cent as expected
- the Bank continues to expectthat total and core inflation will converge on 2 per cent in the second half of 2009
As the value of the USD goes down the EUR/USD and GBP/USD go up. Many people coidsner these good plays against a falling dollar.Leverage is definetely one of the benefits in investing in the forex market (it can also be a curse if someone doesn’t know what they are doing). I actually use a leverage as high as 400-1 on many of my long term hedge positions. I am able to earn a daily interest (7 days a week) on these positions.There are longer term strategies that do not require the constant monitoring and active trading that is mentioned in the previous posts. I have one hedged position that I have not touched for over 6 months and it is doing quite well. There are also no hidden fees and costs when participating in the spot Forex marketplace. You simply pay the difference between the asking price and the bid price when you enter your position. This is called the spread and it is the upfront fee that you pay when purchasing a currency pair. There is no spread charged when you closeout your position.Best wishes for your success.paul