Forex

Bitcoin rises to record high above $23,000

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The dollar fell to its lowest in over two years against major currencies on Thursday after the Federal Reserve stuck to its current policy guns while hopes for more U.S. stimulus and a post-Brexit trade deal boosted appetite for riskier currencies.

Congressional negotiators were closing in on a $900 billion COVID-19 aid bill in the United States, according to lawmakers and aides, boosting stock markets across the globe.

The dollar index =USD continued to retreat during morning trading in Europe, falling at one point to a new low of 89.867 against a basket of currencies after breaking below 90 for the first time since April 2018.

“While we expect stocks to benefit further from positive news on vaccine rollouts and U.S. fiscal support, the same cannot be said for the U.S. dollar”, said Mark Haefele, chief investment officer at UBS GWM. “Safe-haven demand for the dollar is being eroded by a broadening global recovery.”

The Federal Reserve on Wednesday said it would keep funnelling cash into financial markets until the U.S. economic recovery is secure. The promise of long-term help fell short of some investors’ hopes of an immediate move.

The dollar index rose after the Fed’s announcement, but the respite was short-lived. Meanwhile, optimism the European Union and the UK will finally reach a post-Brexit trade deal boosted the pound, which rose to $1.3615 GBP=, its highest level since May 2018.

EU Brexit negotiator Michel Barnier reported “good progress” in the talks but cautioned “last stumbling blocks” stood in the way of sealing a new trade pact.

The pound didn’t make any significant moves and kept trading above $1.36 after the Bank of England kept its stimulus programme unchanged as it awaited for the outcome of the Brexit trade talks. The euro traded as high as $1.2244 EUR=EBS, its highest since April 2018, before giving up some of its gains.

It Crossed the boarder of $23,000

The Swiss franc also gained against the dollar and hit a six-year high of $0.8823 after the Swiss National Bank stuck to its readiness to intervene in currency markets despite being labelled a currency manipulator by the United States.

The U.S. Treasury said that through June 2020 both Switzerland and Vietnam had intervened in currency markets to prevent effective balance of payments adjustments.

Analysts expect the SNB to remain undeterred by U.S. pressure and plough ahead with currency purchases. “An independent central bank should not have to justify its monetary policy decision,” said Karsten Junius, chief economist at J.Safra Sarasin.

Norway’s currency, the crown, also strengthened to a 17-month high against the dollar, up over 1% after the country’s central bank kept its policy interest rate at zero percent but warned that a rate increase may come earlier than it had expected.

But it was not only European currencies which hammered the greenback. The Australian dollar touched 0.7639 U.S. cents AUD=, the highest since June 2018 while the dollar slid to 103.04 yen JPY=EBS, it’s lowest level since March.

China’s onshore yuan CNY=CFXS traded at 6.5333 per dollar and its offshore counterpart CNH=EBS handed at 6.5124, both close to mid-2018 highs. Also, Bitcoin BTC=BTSP set yet again a new record high on Thursday, rising briefly over $23,000 just a day after passing the $20,000 milestone for the first time.

GBP/USD HEADS TOWARDS 1.36 LEVEL

GBP/USD traders seem to have the 1.36 level in sight as a possible target after this week’s advance in the pair. That strength has been due largely to growing optimism that the EU and the UK can reach an agreement on trade before the new year, when the Brexit implementation period ends.

However, the pair remains vulnerable to news headlines suggesting the gap between the two sides is narrowing or widening – and any suggestion that it’s widening could send GBP/USD back towards 1.35 in short order.

Source: https://www.forexnewsnow.com/brexit/bitcoin-rises-to-record-high-above-23000/

Blockchain

Bank Cartels Might Have Used 200 Chat Rooms for FX Rigging

The new evidence shows the market manipulation was even bigger than previously anticipated.

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The on-going lawsuit against the forex rigging cartel of seven banks has taken a massive turn as the defendants’ lawyer told a London court that the traders might have used up to 200 chat rooms to co-ordinate forex price manipulation, according to a Bloomberg report.

Marie Demetriou is representing the investment funds, including Allianz, PIMCO, Brevan Howard, BlueCrest and some pension funds. They have sued big banks, like Barclays, Citigroup and JPMorgan Chase, over allegations of losing money due to price rigging.

Demetriou revealed that some of the traders communicated on some of the instant chat rooms that lasted for hours. However, some of the messaging groups were permanent.

The accused have used several chat rooms, emails, Whatsapp messages and even telephones to co-ordinate the FX market manipulation. If the evidence can back these claims, this could make the case against them strong.

The investors are now repleading the case, and Demetriou believes that: “further chat rooms and unlawful anticompetitive communications will be identified.”

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A Massive Scandle in the Forex Market

More than a dozen major multinational banking giants were accused of rigging the forex currency benchmark rates between 2003 and 2013. The manipulation is massive as it impacted a market with a daily volume of multi-trillion dollars.

These accused banks are facing multiple lawsuits in several jurisdictions. Last year, a US court allowed institutional investors to pursue a class-action lawsuit against 15 major banks for rigging forex rates.

Meanwhile, many of these banks were fined by regulators for some specific price rigging incidents. Five banks, including Citi, Barclays and JP Morgan, paid 1.07 billion euros ($1.3 billion) in fines to the European Union antitrust regulator as a part of their settlement in 2019 for probes in only two chat rooms.

In total, over a dozen of these banks have paid around $11.8 billion in fines to several global regulators and had to shell out another $2.3 billion as compensation to customers and investors.

Source: https://www.financemagnates.com/institutional-forex/bank-cartels-might-have-used-200-chat-rooms-for-fx-rigging/

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Forex

Admiral Markets ‘punished’ for unexcited price increases

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Last year, April 2020, Admiral Markets changed the terms of financial instruments trading without any prior notice to traders. This happened when the prices of crude oil dropped significantly. At the beginning of the Covid-19 pandemic, because of the ongoing events globally, the price of crude oil dropped so much that its price was negative.

To avoid complications, Admiral Markets decided to change the trading terms, however, no prior statement was made by the broker before the decision. In addition, Admiral Markets also increased commissions for keeping positions open at night.

Because of the steps taken by the broker, the Financial Supervision Authority has decided to ‘punish’ the brokerage, by forcing it to pay a fine of 32,000 Euros. According to the representatives of the regulatory agency, the decision was made because the reasons behind the decision were not disclosed to traders in a timely manner.

Admiral Markets is a very well-known Forex broker, which offers its services to European traders.

The decision of the regulatory agency

Although the step taken by the regulatory body to somehow punish the broker for not taking into account the interest of traders is a fair thing, the amount of fine is basically nothing for a company such as Admiral Markets. Admiral Markets is a giant brokerage, the company has made almost 20 million euros of profit last year. 32,000 Euros of fine is nothing for such a company.

The regulatory body noted that the decision was made because a lot of clients who purchased this trading asset had to restructure their positions, which was almost impossible because the broker didn’t give traders any prior announcement or warning about the step it was planning to make.

How did the public react?

The decision of Admiral Markets was followed by a massive backlash from the public, especially the client of the broker. Many have claimed that it would lead to Admiral Markets losing its clients. admiral markets fined

One of the users wrote that the decision was made ‘out of nowhere,’ while another user wrote that after contacting the broker, he found that the broker ‘switched to the contract to December 2020 futures’.

WTI admiral markets decision

Many others said that if the decision was announced prior, so many traders would not end up losing their money. On the other hand, the representatives of Admiral Markets claim that they have acted in the ‘best interests of its customers’, and the decision was made to ensure that clients would still be able to continue trade in global financial markets. However, it has also noted that not all market-specific circumstances have been taken into account while making the decision.

It still is very much unclear why the company did not make any prior warning or statement about the decision that was made. Most of the traders ended up finding out about the steps taken by the broker only after the decision was executed.

Source: https://www.forexnewsnow.com/top-stories/admiral-markets-punished-for-unexcited-price-increases/

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Forex

USD weakens after Friday’s disappointing jobs data

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The recent movements in the market show that the prices of the USD are down in several pairs. The Dollar Index, which measures and tracks the USD against a basket of six other currencies was down 0.3, at 90.638. The weakness of the Dollar Index continues after the disappointing data about US jobs was released on Friday. Before that, the US Dollar Index was up, standing at around 91.6.

The USD was down in a number of pairs, including USD/JPY, GBP/USD, EUR/USD, and many others. According to the official report published on Friday, which showed the job data for January, showed that fewer jobs were created in the economy than was originally expected. According to the data, only about 49,000 nonfarm payrolls were recorded.

According to official data, as many as 779,000 unemployment claims were filed only last week in the USA. The number is only slightly lower than the previous week. Some of the experts are claiming that the US might not be able to return to full employment until 2022, however, it needs some type of a robust enough stimulus package for that.

New stimulus and its impact

On the other hand, the current US Stimulus, which is said to easily pass Congress coupled with the massive fiscal spending and ultra-easy Federal Reserve monetary policy might drat the dollar down in the longer term. According to some of the best Forex brokers, investors are very confused about the current ongoing events in the market, with everything changing very fast.

While some are saying that the stimulus is absolutely necessary for the country right now, there are others who claim that it might cause many problems for the economy of the country.

Traders are advised to keep an eye on the ongoing events in the market, while also using different types of indicators before making any decisions. Since the beginning of the pandemic, the market has changed very much. Even the slightest news is proved to have a huge influence on the prices of the currency pairs.

On the other hand, there are some experts who are claiming that the hopes for the stimulus might help the USD. However, it is very much unclear how things are going to develop in the coming weeks. Some are claiming that the stimulus is very much likely to widen the US current account deficit, which, in turn, will weigh on the state of the USD. Also, the Euro is very much likely to continue rising in the coming months as Europe announces to catch up with the vaccination program by summer.

Source: https://www.forexnewsnow.com/forex-analysis/currency/usd-weakens-after-fridays-disappointing-jobs-data/

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Traders claim eToro forced stop loss against their consent

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On eToro, it is mandatory for every position to use Stop Loss, the only exceptions are the non-leveraged buy positions. As traders on Reddit are claiming, the brokerage has forced a stop loss on their trades, which were non-leveraged buy positions. Traders on Reddit are specifically saying that they did not want to use stop loss, and as the brokerage forced it on them, they can’t reverse it.

“This is my money to lose… If I lose my positions, I will take legal actions,” wrote one of the users on Reddit.

Another client of eToro claimed that when you disable the SL, eToro just takes money from the trader’s balance and puts it in the shares. This happened for GameStop traders, which is a company that has been under a great focus from trades globally.

As traders are saying, there was no Stop Loss earlier. As the brokerage added it on multiple accounts, it has forced the traders to close the positions at a loss, bringing down the price of the stock.

The traders are saying that the most unacceptable thing about this is that the brokerage did not even issue a warning. “My position was also forcefully closed on me! This is my money and a non-leveraged trade. This is 100% no fair and should be taken to justice,” wrote another user of eToro.

What is a stop-loss?

EToro forces SL on trades of GameStopStop-loss orders are placed by traders who want to limit their risks. In most cases, it is offered as an option through a trading platform when a trade is placed. It can also be changed at any time. Once the price threshold is reached, the stop loss activates market order.

Every broker has different types of requirements and laws regarding stop-loss. Mostly it is something that the trader has control over. Stop-loss was created to limit the losses of traders, and by forcefully adopting them, Forex broker is creating a lot of problems for traders.

Although it is designed to safeguard traders from higher risks, using it forcefully can be riskier for traders. According to the official information from eToro’s website, a Stop Loss is mandatory in every position. However, there is an exception. For non-leveraged buy positions, stop-loss is not mandatory.

The positions that eToro forced SL onto were non-leveraged buy positions. This goes against the official statements of the broker. What’s worse is that the broker did not make any warning or previous statement regarding the step that it was planning to make.

A huge majority of eToro users are claiming that they were unable to reverse the SL. Some even said that they have ended up losing a certain amount of money because of the forceful SL. One of the users noted that they lost $30. The broker has inserted a -20% Stop Loss on non-leveraged positions.

As one of the clients of eToro wrote, he bought the shares of GameStop at $298. EToro sold it without any previous warning at $232, after which, the trader bought it back at $243. “They created the low of the morning by selling their customers shares without warning in massive volume,” writes one of the clients.

The step comes after the developments in the stock trading market. Redditor traders have previously decided to buy the shares of underperforming companies, that were largely shorted. As a result, the prices of such companies, one of which was GameStop, have skyrocketed.

After such events, leading brokerages online have decided to impose special limitations on trading several companies’ shares. This was followed by a massive backlash online, some traders even filed legal lawsuits. As some of the brokers are trying to limit access to the shares of companies with huge demand, traders of Reddit are saying that they are nowhere close to stopping.

Source: https://www.forexnewsnow.com/top-stories/traders-claim-etoro-forced-stop-loss-against-their-consent/

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