Unfortunately the FX markets, which seemed to be selling the Pound and Euro in anticipation of a rate cut from both the ECB and MPC only reversed for the Euro and not for the Pound. Sterling is now weakening again against all the majors and yet another attack on the $1.95 level vs the dollar is going on as I write. Sentiment on currencies can be a fickle master with the ugly duckling turning into the beautiful swan almost in the blink of an eye. Until June last year nobody wanted Yen as the ‘carry trade’ worked its magic but since the 22nd of that month suddenly the Dollar and Pound became the smelly socks in the drawer. When you read of this or that guru talking about ‘long term’ trends just remember how few were forecasting the last nine months of correction.
FX Spread Betting, 8 May 08
For today, dealers will take their lead from the rate decisions due at 12.00 (BOE) and 12.45 (ECB). This should make for a peaceful morning. My indication yesterday that currencies might be moribund until today was a little wide of the mark as the pound and euro decided to react to today’s expected cuts as though they had already happened. Both currencies had a tough time of it and the Euro continues to do so this morning, falling through the $1.5350 support level overnight before bouncing off the $1.5280 support in early European action.
The pound is holding above $1.9500 having hit the level yesterday afternoon and several times in the small hours this morning. The currency is building a volume support at just above $1.95 and bulls will be hoping that the effects of any rate cut will have been factored into the market before it happens. If this occurs then there could very easily be a relief rally on the actual announcement. And, of course, there is always the chance that the BOE will do nothing.
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FX Spread Betting, 7 May 08
On the forex spread betting front the pound is battling to maintain its strength against a host of crosses. Cable is drifting below $1.9600 in early action. Whilst we have had innumerable failed attempts to go lower over the past few months, you do get the feeling that the battering ram will at some point break through. With the Bank of England decision to be made tomorrow it would be surprising if a move were to be successful today. That means we may find short term buyers coming in at these prices merely for today’s session.
FX Spread Betting, 6 May 08
Looking at the FX spread betting market last week the slide in the Euro gathered momentum, partly due to demand for the Dollar. The Euro ended the week at EUR USD $1.5410 and EUR GBP £0.7800. Sterling weakened marginally against the Dollar to $1.9720.
FX Spread Betting, 2 May 08
Enthusiasm around the US economy was behind the drive of the currency markets yesterday with the dollar making substantial gains against sterling and in particular the euro. Today’s non-farm payroll figures may put a halt to that if they come out much worse than expected.
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FX Spread Betting, 1 May 08
In the FX spread trading markets the pound regained it trading range with some ease yesterday afternoon and we are back in the $1.9700 to $2.000 region once again. With the current GBP / USD spread at $1.9906 - $1.9909 I can see Financial Spreads clients, who bought the move below $1.9700 in large numbers yesterday, taking profits very soon. That’s on the reasonable basis of “let somebody else take us above $2 if they can, I don’t want to risk it with my money!”.
The announcement by the Fed of another 25bps off the base rate was not a surprise but it rather reinforces the worldwide impression that the US is following a policy of dollar devaluation (notwithstanding statements made by politicians). With Europe and the UK unlikely to follow with such dramatic rate reductions foreign currency players have only a poor return to contemplate when buying into the Greenback. This would not matter too much if the economy was perceived as being reasonably robust or if the trade balance was close to parity. Unfortunately the opposite is the actuality and so the dollar bears will continue to circle the markets for some considerable time.
This does not mean that the dollar will necessarily decline, as much world business outside of the US takes place in dollars, but it does make a serious rally less likely in the short to medium term. If the US does drift into a recession (we are not in one yet no matter what you read) then the prospects (as with the pound) do not look rosy.
Spread Betting on FX, 30 Apr 08
On the currency, front the pound finally broke out of the $1.97 to $2.00 range and we have slipped to a GBP / USD spread of $1.9646 - $1.9649 in early action today. FinancialSpreads.com clients are buying into this weakness (and have been buying since the $1.9750 level) so they must be hoping for a regaining of the aforesaid range soon. If we can close down here for a few days then the probability starts to switch towards a concerted move lower. The pound has had a truly awful time for quite a period and, unfortunately, this shows no signs of halting just yet.
Spread Betting on FX, 29 Apr 08
The markets today look to be going over the same ground as yesterday with the pound dropping back to yesterday mornings level around £1.9800 and Gold and Oil reversing some of the recent gains.
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Spread Betting on FX, 28 Apr 08
Sterling is back in the mid range of the $1.9700 to $2.0000 region (I get tired of writing this) with current GBP USD spread at $1.9797 - $1.9800. We had several attempts on Thursday and Friday to break below the $1.97 mark but all were defeated. The Capital Spreads clients continue to trade the range and have been good buyers on weakness and sellers on strength which has proved very profitable over the past three or four weeks. For longer term traders there is some need for a break out but in all honesty it is difficult to see which way this is likely to be. The trend appears to be for a weaker pound but we really need a confirmation of a move lower for the bigger players to join in.
Spread Betting on FX, 25 Apr 08
Looking at the Forex Spread Betting markets the Pound actually managed a good day for a change as the Euro and Yen suffered. Of course the real winner was the US Dollar. Cable is now at the bottom of it recent range with dealers probing for any weakness below $1.9700. We have been here many times in recent weeks and each event has seen a bounce back up to $1.9950. The Financial Spreads accounts seem to be expecting a similar response this time and we are seeing buyers creeping into long Sterling positions.
The problem with much of the current currency levels is that there have been huge shifts in recent years and if there is a sea change in favour of the green back then there is a lot of space for it to recover.
Spread Betting on FX, 24 Apr 08
Sterling has also been rather cuddly towards our clients. The Cable range between $1.9700 and $2.0000 was reconfirmed yet again with yesterdays rejection of the highs around $1.9975. The GBP / USD spread is now down at $1.9750 - $1.9753 and shorts are quietly taking their profits and looking for an indication that the reverse might happen today.
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Spread Betting on FX, 23 Apr 08
Looking at the FX markets the pound continues to oscillate between £1.9700 and £2.0000. This morning Sterling is showing weakness from the yesterdays attempt to get back above the 2 dollar mark. With little information to go on at the moment short-term punters are playing the aforementioned range with the position takers sitting on their hands awaiting, as with the FTSE, a break out.
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Where can I Spread Bet on Forex / FX markets?
You can currently spread bet on Forex markets like GBP/USD:
It depends upon what you mean by free. If you're looking for a free Demo Account where you can practice spread trading see below.
Tax Free. If you are looking for a free spread betting platform then don't forget that in the UK spread betting is tax free*
You can also spread bet on FX commission free and with no brokers fees at:
Free Demo Account
If you're looking for a free Practice Account / Test Account where you can trial spread betting, including Forex markets like GBP / USD, EUR / GBP etc. then you can you can always try:
Each of the above currently offers a free demo account.
How to Spread Trade Forex?
As with many markets, you can spread bet on the value of Forex markets, like the GBP / USD currency pair, going up or down.
At the time of writing the GBP / USD (March) market is 2.0604 - 2.0612 with Financial Spreads. This price expires on 14-Mar-08.
Therefore you can spread bet on GBP / USD settling:
Above 2.0612, or
Below 2.0604
By the market expiry date of 14-Mar-08.
Note that for the GBP / USD currency pair, you trade in £X per pip, where a pip is 0.0001 units of GBP / USD movement. For example, if your stake was £6 per pip and the GBP / USD moves 0.0007 points (7 pips) then that would be a £42 difference to your profits.
GBP / USD Financial Spread Betting Example
Let's say, you think that Sterling is holding it’s own against the Dollar and the Dollar is looking a little weak. Therefore taking the above spread of 2.0604 - 2.0612 you think that the GBP / USD cross rate will close above 2.0612 by 14-Mar-08.
Therefore you buy at 2.0612 for a stake of £2 per pip.
If by the settlement date the market closes 2.0682, then:
Your profit is worked out by taking the difference between the closing level of 2.0682 and the price you bought the spread at, ie 2.0612, and then multiplying that by the stake per pip.
Profit and loss = ((2.0682 - 2.0612) / 0.0001) x £2 per pip stake.
Profit and loss = (0.0070 / 0.0001) x £2 per pip stake.
Profit and loss = 70 pips x £2 per pip stake.
Profit and loss = £140 profit.
But if the market did not move as expected and had Dollar strengthened then the GBP / USD cross rate could have finished lower at 2.0554. If so, would have made a loss on this spread bet.
Loss = ((2.0554 - 2.0612) / 0.0001) x £2 per pip stake.
Loss = (-0.0058 / 0.0001) x £2 per pip stake.
Loss = -58 pips x £2 per pip stake.
= -£116 loss.
Where can I Find Free FX Live Prices?
If you want to access quick live market information then you could do worse than opening an account with a firm like Financial Spreads.
Also, you don't have to trade with them, if you just open an account (which is free to do) then their data is free. The catch? You'll get the odd email or letter from them. In the example below you can also see that their free charts are also useful.
As mentioned above, you can get free charts with spread betting companies like Financial Spreads.
You can alter the charts to see market data by the minute, by the hour, by the week etc, plus many other settings to help you analyse the charts.
As you can see the charts show how the market's are not perfect and how you can expect the prices to "gap".
FinancialSpreads.com also have another pretty handy tool in their free Demo account (mentioned above). You can open a Demo account and place demo trades whilst you practice with no risk or cost attached.
Where can I find Free FX Trading Platforms / FX Software?
Some of the trading firms offer software / trading platforms you have to download but most offer free web based platforms that allow easier access from home, the office and most other places with Internet Access.
The following also offer free live prices and charts:
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'Forex Spread Betting' by DB, updated 09-May-08
For related pages also see:
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Q) Average Trading Results?
A) Get free spread betting tips, offers, price updates, important news and more! All Free? Click here!
Risk Warning: Spread betting carries a high level of risk to your capital and you may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
* Tax law is subject to change or may differ if you pay tax in a jurisdiction other than the UK.
