» FXCM

New York, April 15, 2008

FXCM (www.fxcm.com), one of the largest Forex Dealer Members, recently introduced the Enhanced Dollar Index Programs. These programs, which use the DXY Index as a benchmark, let investors take a position based on the direction of the dollar without having to trade the dollar themselves, seeking to outperform the DXY Index.

The difference:

FXCM Enhanced Dollar Index Programs

• Actively adjusted weightings of currencies and leverage to take advantage of market conditions*
• Ability to switch between the Dollar Bull and Dollar Bear programs with no additional fees or commissions

Most ETFs and Currency Index Products

• Passive Investment
• Fixed weightings of currencies and either unleveraged or set leverage.

The FXCM Enhanced Dollar Index Programs were developed by the systems trading desk at FXCM with direction from DailyFX.com analysts. Using proprietary FXCM order flow data, these actively managed programs are exclusively available through FXCM. The FXCM Enhanced Dollar Index Programs use sophisticated, back-tested strategies designed to minimize loss and aim to provide a higher return on investment than just investing in the Index directly.**

The FXCM Enhanced Dollar Index programs are different from other currency ETFs or currency futures indexes, which traditionally do not optimize their positions based on market conditions. The FXCM Dollar-Bull Index Account Program beat the DXY Index 3 out of 5 years, and the FXCM Dollar-Bear Index Account Program beat the DXY Index 4 out of 5 years.***

You choose:

• If you forecast the dollar will rise, you would invest in

   The Dollar Bullish Program: http://www.fxcm.com/enhanced-dollar-bull-index.jsp

• If you forecast the dollar will fall you would invest in

   The Dollar Bearish Program: http://www.fxcm.com/enhanced-dollar-bear-index.jsp

For more information on FXCM Enhanced Dollar Index Programs, and to see past performance, please visit www.FXCM.com

* Without proper risk management, a high degree of leverage can lead to large losses as well as gains.

** The Bull and Bear programs of the FXCM Enhanced Index Programs will perform contrary to each other as they seek to profit from opposing views of the dollar. Through the use of active strategies, the FXCM Enhanced Index Programs aim to bias returns to the upside, i.e., to provide larger gains if the currency in one program moves in its selected direction, while minimizing losses in the counter-program.

*** This claim is based on a comparison between the actual currency index and a retrospective, back-tested analysis of the FXCM Enhanced Index Programs during the relevant time period. Hypothetical performance results may have many inherent limitations, some of which are described in the risk warning. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.

One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk. Variables such as the ability to adhere to a particular trading program in spite of trading losses as well as maintaining adequate liquidity are material points that can adversely affect actual real trading results.

(New York, January 22, 2008) FXCM’s No Dealing Desk trading platform recently added an additional bank as a price provider, bringing the total to seven global banks that compete to provide pricing for FXCM’s Trading Station. Over the last three months, typical spreads have already tightened.

Watch closely for lower spreads in the following currency pairs:

EUR/USD Typical Spread: 2.3 pips, As Low As: 0.9 pip
EUR/CHF Typical Spread: 2 pips, As Low As: 0.1 pip

“FXCM’s No Dealing Desk trading platform aims to provide transparent and fair execution. Every trade is executed back to back with one of the world’s premier banks, or financial institutions, which compete to provide FXCM with bid and ask prices,” said Drew Niv CEO of FXCM. “The best spreads available to FXCM are streamed to you with a small mark-up, which is generally one pip or less for major currency pairs.”

I tested the spread on the demo platform but I have 2.6 pips on EUR USD and 3 pips on EUR CHF (look at the screen shot). The press release is optimistic… But I think the spread is not the most important, a broker who not take position against traders is important. FXCM with 7 banks as price provider shows a good trend for forex brokers.

After reviewing client feedback, FXCM has incorporated many of the requests suggested and have revamped the Marketscope charting package, which is integrated into the FXCM trading platform. These new changes will eliminate the need to toggle between the charts and the rest of the trading station in order to make orders or place trades.

Major Change, Trading from Charts:

• Place orders and manage positions directly from the chartOpen
  • New Positions and Close Existing Positions
  • Set and Manage Stop-loss and Limit Orders
  • Create and Remove Entry Orders
• See all open positions and waiting orders reflected on your charts

New Look and Feel, Fully Customizable:

• Create a layout that best meets your trading style
• User friendly and easy to navigate
• Improved Trendline drawing tool

I tested the new platform and… It’s great but can be improve.

What can we do on the platform ?

1. We can create an order on the chart
2. We can move the “Stop” and “Limit” on the chart

What can be improved ?

1. We don’t have the option to disable confirmation. I want to move my stop line without a click in a confirmation box.
2. Why the default stop order is 9 pips and limit order only 1 pip??? Can we change that in options menu?
3. The order lines are horizontals. Is it possible to make a line and fix my stop on it? It could be a very good tool to stop a position on a support/resistance of a channel.
4. And better : could we fix a stop/limit order on an indicator (moving average…)
5. The options are “Create market order” and “Create entry order”, with the sell option selected. I’d prefer “Sell at market”, “Buy at Market”, “Sell order” and Buy order” it’s clearer. I also want the possibility to deactivate the confirmation on market orders.

I have many wishes on my Christmas list ;) I’ll continue to test the platform…

Forex Capital Markets LLC (FXCM) announced that the Refco estate agreed to sell its 35% ownership interest in FXCM to Long Ridge Equity Partners (and affiliated entities) and Lehman Brothers.

New York, December 3, 2007 — Today, Forex Capital Markets LLC (FXCM) announced that the Refco estate agreed to sell its 35% ownership interest in FXCM to Long Ridge Equity Partners (and affiliated entities) and Lehman Brothers. The financial terms of the transaction were not disclosed.

The announcement of the sale was made today by Drew Niv, CEO of Forex Capital Markets LLC (FXCM), the Wall Street currency trader.

“We are extremely pleased with the outcome of the auction,” said Niv, “and we look forward to Lehman Brothers and Long Ridge becoming shareholders in FXCM. We believe Lehman Brothers’ expertise in the global foreign exchange market and insight into growing our business will be extremely beneficial both for our company and for our clients.”

Upon completion of the transfer of ownership:

• FXCM will no longer have any financial connection or business relationship with the Refco estate;
• Five investors, including Long Ridge FXCM, L.P. and Long Ridge FXCM Coinvestment, LLC, are purchasing 25.1%. Lehman Brothers has agreed to acquire an equity stake of 9.9%.
• The FXCM Board of Directors will be composed of seven members. Five seats will be held by original founders of FXCM and two will be held by members nominated by the new investors excluding Lehman Brothers;
• There will be no change in FXCM’s management, operations or services.

Refco Exits As A Shareholder

“As a result of the transfer of ownership, the Refco estate will have no equity stake in FXCM,” said Niv. “Replacing Refco as a shareholder will be a positive in the marketplace, enabling the industry and individual traders to focus on FXCM’s strong financial position, its growing business and its product innovations.”

No Change In Leadership Or Management

“The results of the auction will change neither the leadership nor the management of FXCM,” said Niv. “The investment being purchased constitutes a minority interest in FXCM. The original founding partners of FXCM still control a majority of 5 of the 7 seats on our Board of Directors, and will collectively make all major decisions. The new investors are fully in sync with management’s plans, so FXCM will not be making any changes in personnel, operations, or strategic direction as a result of the auction.”

A Vote Of Confidence For The No Dealing Desk Model

“The no-dealing-desk trading platform we have developed allows currency traders to receive prices provided to FXCM, from some of the world’s largest banks, who, offer us some of the most favorable rates. We believe this business model points the way for all retail currency trading in the future,” said Niv.

Written by Terri Belkas, Currency Analyst DailyFX

Fundamental Headlines

•    AUDUSD – HIA new home sales data showed an 0.8 percent rise in the sale of homes during October, marking the slowest pace of growth in six months as tighter RBA monetary policy cools demand.
•    USDJPY – Japanese retail sales for October rose at a better-than-expected 0.3 percent from the month prior, pushing the annual rate up to 0.8 percent. Gas prices led the index higher, though auto sales also contributed to gains.
•    EURUSD – GfK German consumer confidence for December fell back in line with expectations to an index reading of 4.3. The decline is not entirely surprising given current outlooks, as the tightening of the credit markets and mounting inflation pressures quell growth prospects in 2008.
•    USDCHF – The KOF Swiss leading indicator fell modestly to 2.02 in November from an upwardly revised 2.04. Nevertheless, the index is still relatively strong and highlights the resilience of the Swiss economy.

Source: FXCM

Written by Boris Schlossberg, Senior Currency Strategist DailyFX

Talking Points

•    Japanese Yen: Tertiary slip -1.6% vs. -1.0% expected
•    Pound: UK Retail Sales first negative since April
•    Euro: CPI in line
•    US Dollar: CPI  on tap

UK retail sales registered their first negative reading since April of this year and sent cable crashing through the 2.0500 barrier as traders feared that the slowdown in consumer spending would accelerate BoE’s monetary easing plans.  The news on the consumer front confirmed the rather dour outlook from BoE yesterday which suggested that the UK economic risks were skewed to the downside as the country continue to suffer the consequences of the credit crunch in the financial markets.

As the center of global capital markets the UK economy is the most vulnerable nation amongst the G-7 to a financial meltdown that could hurt the hedge fund industry.  While the downturn in the UK Retail Sales data today was as much a result of warm weather as softer consumer demand, it does suggest that growth may have peaked and if the continued fallout in the financial sector results in significant lay offs in the next several months, BoE will almost certainly be forced to ease, reducing the British pound’s attractiveness to the currency markets.

Yesterdays, BoE report created a major shift in sentiment against cable in the FX market. If in the next several weeks traders begin to see softer data from the UK, cable could be very susceptible to a run towards the psychologically important 2.00 level and remain weak on the crosses, especially against the euro where market expectations for further rate hikes remain in place.

The euro meanwhile came under some pressure from risk aversion, as equity markets from Tokyo to Shanghai to London all printed red and the EURJPY cross declined more than 200 points in overnight trade.  In economic news EZ CPI printed in line with expectations rising to 2.6% on a year over year basis.  This was the fastest rise in 2 years confirming the hawk’s position that inflation pressures in the EZ remain elevated.

Today, the market will get a glance at US CPI data expected to print slightly higher at 2.2%.  Yesterdays tame PPI readings allayed some of the inflationary concerns and indicated that the Fed may have more room to ease should it decide to do so. Today’s CPI numbers could serve as another supporting argument that US core inflation remains relatively controlled despite the volatile rise in the energy and food sector. Overall, however, it is doubtful that the CPI release will have much of an impact on currency trade. The EURUSD appears to be in consolidative mode, having run out of steam after scaling the 1.4700 level.  The pair will need fresh evidence of further Fed easing before attempting a run at the 1.5000 figure. For news in Spanish, please visit Noticias Forex.

Source: FXCM

Written by David Rodriguez, Currency Analyst DailyFX

Currency trading markets sunk the US dollar for the second consecutive trading day, as a broad improvement in risk aversion allowed speculators to re-enter previously profitable dollar short positions. The effects were particularly pronounced against high-flying carry trade currencies, with the Australian dollar up 0.6 percent and the New Zealand dollar 0.9 percent improved against their
US namesake. Relatively uneventful economic data was not enough to derail the dollar sell-off, and only a later turn in the Dow Jones Industrial Average slowed the greenback’s renewed descent.

US Producer Price Index and Advance Retail Sales reports printed roughly at consensus forecasts, and a subsequently unchanged outlook for inflation and consumer spending left the dollar relatively stable through morning
New York trade. Yet the bulk of dollar losses occurred in the overnight
Tokyo session, with a whopping 4.9 percent rally in the Hang Seng Index and a 2.5 percent surge in the Japanese Nikkei 225 fueling demand for highly speculative carry trades. Given that the dollar has consistently lost in the face of rallying equity markets, it is little wonder that the greenback gave back all of its early-week advance on a strong performance in Asian equity indices. That said, it is unsurprising to note that the dollar recovered some of its losses as the Dow Jones Industrial Average slipped through afternoon trade.   

The Dow initially rallied 63 points soon after the morning open, but flagging bullish interest dragged the index to a +16 points just an hour ahead of the close. The S&P 500 showed similar price action and remained 3 points up to 1,484 through time of writing. Yet modest gains did not spread to the recently volatile NASDAQ Composite index. Tech stocks underperformed the broader market and pushed the NASDAQ 0.3 percent lower to 2,665. 

US Treasury Market trading was similarly muted, and the yield on the 2-Year Treasury note rose a single basis point to 3.55 percent. The 10-year Note was likewise 1 basis point higher to 4.27 percent, while the December Fed Funds Futures contract gained 1.5 basis points in implied yield to 4.37 percent. Futures traders now price in an approximate 72 percent chance that the Federal Reserve will cut interest rates by 25 basis points at its upcoming meeting. All else remaining equal, expectations for falling US yields will keep the US dollar offered through upcoming forex trade.

Source: DailyFX   

Written by Boris Schlossberg, Senior Currency Strategist, DailyFX

The start of the week brought more selling in USDJPY as Nikkei followed Friday’s weak performance in the Dow and plunged more than –300 points on fears of further problems in the subprime sector.

Talking Points

•    Japanese Yen: Dips below 110 as Nikkei follows Dow
•    Australian Dollar: Plunges to 89.00 on risk liquidation
•    Pound: PPI data hot
•    Euro: Slips bellow 1.4600 on EURJPY German FinMin talk
•    US Dollar: Veterans day docket empty

The start of the week brought more selling in USDJPY as Nikkei followed Friday’s weak performance in the Dow and plunged more than –300 points on fears of further problems in the subprime sector.  However, by mid morning of European trade carry trades stabilized with USDJPY nearly 100 points off the days lows, as traders looked ahead to the North American open. With  Armistice Day holiday today there are no economic releases from EZ or US, although capital markets are open. The direction in currencies will most likely take its cue from the movements in the Dow.  If DJIA gives up the 13,000 level more carry trade selling may be in store and USDJPY could well test the 109.00 figure before the end of the day.

Meanwhile, as trading begins this week, we may be seeing signs of a near term top in the EURUSD. The pair failed twice at the 1.4700 level last week and by early London trade today broke below the 1.4600 figure, as profit taking and carry trade liquidation began to weigh on the unit. Furthermore, European officials are no longer quite as cavalier about the single currency’s record rise against the greenback. Last week ECB President Trichet refused to issue a clear signal of a rate hike in December indicating that the monetary policymakers are clearly concerned about the one way price action in the FX market despite headline inflationary pressures in the region. Tonight, German Finance Minister Peer Steinbrueck  in comments to Der Spigel magazine noted that further appreciation in the euro could slow growth. This was a significant change of rhetoric from just a few days ago, when Mr. Steinbrueck  was far more nonchalant about euro’s strength.  Should US data this week surprise to the upside, it may provide the necessary spark for a long overdue rebound in the dollar. For now however, control of the market remains with euro bulls and unless 1.4500 level is broken decisively the bias in the pair is still to the upside.

Finally, UK PPI data proved hotter than expected with core PPI Output gaining 0.6% on the month versus 0.2% projected. The news suggests that price pressures in the UK economy are quite serious and may prevent the BoE from considering any loosening action for the near future

Source: FXCM

Written by Boris Schlossberg, Senior Currency Strategist DailyFX

Talking Points
•    Japanese Yen: Blows through 114.00 level as Chinese official hints at diversification
•    Australian Dollar: RBA hikes to 6.75%
•    Euro: Hits 1.4700 on Chinese comments
•    US Dollar: Productivity and Inventories on tap

The dollar collapsed completely tonight in Asian and early European trade after Cheng Siwei, vice chairman of the National People’s Congress stated that China should invest its nearly $1.5 Trillion of FX reserves in stronger currencies.  The FX market instantly interpreted the remarks as a sign that the Chinese will begin diversifying their currency assets away from the greenback and as a result the dollar reached record lows against the euro, hitting 1.4705 in morning London trade.  It fell materially against the pound as well taking out the 2.10 level.

Although, Mr. Siwei has a history of making broad economic comments that often do not reflect actual policy, and although the National People’s Congress  is not involved in directly setting currency targets, today reaction speaks volumes about the extent of anti-dollar sentiment present in the FX  market right now. The price action in the dollar is uniformly bearish, as currency traders fear that the problems in housing and finance sectors will drag the US economy into a recession in 2008, while the rest of the world will continue to  expand and perhaps even tighten its monetary regimes.

Today the markets saw more evidence of that decoupling thesis as Reserve Bank of Australia raised its overnight rate to 6.75% despite the fact that the country is facing a Federal election at the end of the month. Governor Stevens noted that inflation has exceeded the central bank’s target and decided to act expeditiously. suggesting that further hikes may be in the offing.  It is precisely this type of stark difference between the easing monetary policy of the Fed and the continued hawkish posture of US’ s major trading partners that has helped to produce the current round of dollar weakness.   

Tomorrow all eyes will focus on the ECB press conference with President Trichet facing a very tough decision. Given their recent rhetoric European monetary authorities clearly want to raise rates by 25bp before year end, as inflation in EZ exceeds the ECB self imposed target of 2%. However, with EURUSD already trading at 1.4700 Mr. Trichet risks the  possibility of pushing the pair to 1.5000 should he hint at a December hike. That in turn is likely to elicit howls of protest from EZ finance ministers who fear that the current currency regime will undermine the region’s economic recovery. If Mr. Trichet balks and holds rates steady, the EURUSD may finally embark on long overdue correction.  For DailyFX news in Spanish, please visit Forex Noticias.

Source: FXCM

Written by Boris Schlossberg, Senior Currency Strategist, DailyFX

Talking Points

•    Japanese Yen: LEI at 0% lowest level in a decade •    Euro: PMI Services beats PPI hot •    Canadian Dollar: Ivey PMI on tap •    US Dollar: event docket empty today

EURUSD resumed its uptrend in early European trade today as it once again challenged all time highs set last Friday at 1.4528. Boosted by a rebound in European equity markets and better than expected economic results from the Euro-zone, the pair continues to hold the 1.4500 figure as market participants await the ECB meeting this Thursday.

As we noted in our weekly, “The ECB meeting on Thursday remains the key to further gains in the euro. Although no one expects the central bank to hike rates in November, the European monetary authorities generally like to prepare the market for any policy moves. To that end Mr. Trichet’s commentary will be crucial in signaling whether the bank will tighten in December. ECB officials have been uniformly hawkish in their recent statements but it remains to be seen if they will be willing to raise rates in the face of record high exchange rates for the EURUSD.”

On the economic front EZ news was generally positive today with PMI Services printing slightly better at 54.7 versus 54.5 expected. Looking at the details of the subcomponent surveys the German data revealed that while new business improved markedly jumping from 52.1 to 54.5, business expectations slipped below the 50 boom/bust line to 48.7 suggesting that the higher euro is starting to weigh even on the region’s services sector.

With US economic calendar empty, the pair will most likely trade on risk assumption/risk aversion flows, driven by the price action of US equities. The trend in the EURUSD remains up, and the pair may well challenge the 1.4550 level, as euro longs try to knock out option barriers set at that price. However, we continue to believe that any forward progress in the pair is likely to be incremental from this point onward, unless US data shows significant deterioration, inviting further cuts from the Fed or ECB determines that inflation risks outweigh the dangers of sabotaging growth and chooses to hike rates to 4.25% by year end. For DailyFX news in Spanish, please visit Noticias Forex.

Source: FXCM