USD Dollar (USD) – The Dollar weakened against most of the major currencies after the NFP report showed worse than expected data while job losses came out -125k vs. expected -100k. The Unemployment Rate came out 9.5% better than expected 9.8%. Stocks in the US fell with NASDAQ and Dow Jones falling by -0.46% and -0.47% respectively. Crude oil fell for a fifth day in a row hardly managing to close at 72.2$ a barrel. Gold (XAU) recovered a little from its previous losses and closed at 1211$an ounce. Today, US banks will be closed in observance of Independence Day, low liquidity might cause to irregular volatility in the market.

Euro (EUR) – The Euro rose further against the Dollar after the release of the US employment report hitting a 6 week high and extending its rally. The Unemployment Rate came out 10% better than expected 10.1%. The PPI came out unchanged at 0.3% as expected. Trading above the support level of 1.2470 keeps the momentum positive for the pair. Overall, EUR/USD traded with a low of 1.2480 and with a high of 1.22610. Today, the Retail Sales are expected at -0.1% vs. -1.5% previously.

EUR/USD – Last: 1.2544

British Pound (GBP) – After the NFP data came out in US the Sterling has reached 8 week fresh high at 1.5228 but shortly fell below the 1.52 zone. The Construction PMI came out 58.4 worse than expected 58.6. Trading above the support level of 1.5120 keeps the momentum positive for the pair. Overall, GBP/USD traded with a low of 1.5148 and with a high of 1.5228. Today, the Service PMI is expected at 55.2 vs. 55.4 previously.

GBP/USD – Last: 1.5179

Japanese Yen (JPY) – The Dollar recovered versus the Yen after the NFP data came out while attempting to rise back above the 88 zone. Breaching the 87.8 level will turn the momentum to positive for the pair. Overall, USD/JPY traded with a low of 87.31 and with a high of 88.20. No economic data is expected today.

USD/JPY-Last: 87.90

Canadian dollar (CAD) – The US Dollar rose in Forex Trading versus the Canada’s Dollar as investors observed contrarian figures in the US Labor sector. The loss on jobs but decrease in unemployment rate added upside momentum to the pair. Trading above the support level of 1.0530 keeps the momentum positive for the pair. Overall, USD/CAD traded with a low of 1.0554 and with a high of 1.0666. No economic data is expected today.

USD/CAD-Last: 1.0606

The people involved in Forex trading have the sole intention of gaining profits from the Forex market and they do lot of activities to fulfill this objective. However, the amount of profit a trader will earn hugely depends on the strategy he applies for Forex trading. The traders adopting good strategies always have a better chance to gain more profits than others. They also have a reduced chance of losing their money in the Forex market. Many traders adopt unique strategies to further increase their chance of gaining Forex profits.

Forex trading is mainly about gaining profits through buying and selling foreign currencies, simultaneously. The experienced Forex traders, who have keen market sense and can observe the market properly, usually apply better strategies than others. They develop their own investment strategies on the basis of information they get from the market. They also participate in different types of trading like position trading, day trading, swing trading etc and increase the possibility of gaining profit. They also stick to their strategies.

The experienced Forex traders usually devise their strategies after observing the market for quite some time. They do not enter a trade, unless they devise a proper exit strategy. They know very well how to minimize their losses and maximize their profits in the Forex market. The leverage strategy is one of the best Forex trading strategies adopted by the experienced traders. The online traders can get more funds than the deposited amount through this strategy. They can also maximize their benefits. The strategy helps them backing up the high yield transactions quite easily and gaining more profits. The traders can also stay safe from the sudden fluctuations in the Forex market.

There is another useful strategy that the Forex traders often adopt to maximize their profits. Known as stop loss order strategy, this strategy gives the investors protection against uncertainties. The traders can also minimize the losses through this strategy. The automatic entry order strategy is also a useful and good Forex trading strategy for the traders. With this strategy, the traders can participate in the trading activity when they find the price to be suitable for them.

To gain more Forex profits through simultaneous buying and selling, you should also follow certain basic rules, apart from adopting different strategies. You should always try to gather more knowledge about Forex trading and keep yourself updated. You should also restrain your greediness and fearfulness and should take the consequences of a trade practically. Your main objective should be either gaining profits or getting capital appreciation. You can get Forex profits if you invest within your affordability to lose. You should also rely on expert opinions, history prices and analytical statements that can help further increase your profits.

Forex trading exposure management is far more difficult than managing accounting exposure.  In accounting exposure, the risk involved can be easily measured as well as provided for economic exposure is uncertain as well as strategies have to be framed as situation evolves, rather than anticipating as well as providing for them.  Economic exposure affects the vehicle, production and sales that make these possible through the medium of finance.  Therefore, the strategies of Forex trading exposure management are also around these functions such as marketing, production and finance.

Marketing strategies of trading Forex to manage exposure management may comprise of market selection, pricing and product decisions.  A company with trading Forex markets in different countries may adopt market selection as a strategy when faced with rate of exchange variations.  It may shift its emphasis from the market whose currency has depreciated to those whose currencies have appreciated.

Pricing decision is a multifaceted phenomenon and mainly depends on the elasticity of demand for the product and the competition faced by the company.  Pricing involves consideration as:

• How frequently can the price be changed?
• Whether to retain the market retain or share the profit margin.

The choices available to the company to retain the profit margin or market share in the wake of rate of exchange variations.  The decision has to be taken by the company depending upon various factors like the product life cycle, how long the change will persist, ease of entry for competition, consumers sensitivity, etc.  The company’s aim should be to maintain the overall profits, not losing sight of the long term perspective of the decision taken.

Rate of exchange variations may have an impact on the timing of launching of a new product.  The ideal time for launching the product in the trading online will be when the home currency has depreciated.  The time will also be suitable for expanding the product like as well as cover wider customers.  Product innovation as well as product adaptation is other methods adopted to add value to the product and catch the elite segment for cost may not be the major factor in trading online.

In production strategies of Forex online, multinational companies with production as well as sourcing bases in different countries can manage the economic exposure by choosing the right production as well as sourcing bases.

In financial strategies of Forex online consist in minimizing the cost of borrowing by sourcing at the cheapest market and matching liabilities and assets in a currency so that the effect of rate of exchange change is neutralized.  These manipulations can be done relatively easily by a multinational company which has access to different markets.

Thus, Forex trading exposure is readily recognized as well as provided for by the Forex companies. The classical method used is the forward contract.  Real trading online has wider ramifications, but least recognized.  With the greater awareness, companies are now devoting more time in exposure management.  In the world of competition as well as liberalization, the growth and survival of business enterprises depends significantly on real trading online on how well they recognize and manage effectively the risk of exchange as well as exposure.

Economic exposure or operating exposure in Forex trading relates to the effect of unexpected rates of exchange on the future operating cash flows of the company.  In the management of finance, a firm is valued by the net present value of the future cash flows.  A change in the rate of exchange may bring about changes in the cash flows of the company directly by reflecting its revenues as well as costs and indirectly by affecting its competitiveness by the action of its consumers as well as competitors.  As a result, the net present value may differ from the one anticipated.

The economic exposure in Forex trading is less clearly perceived but has wider ramification with far reaching effects than the accounting exposure.  Accounting exposure of trading Forex is more readily seen and provided for.  Economic exposure in forex trading is insidious, more difficult to measure as well as more difficult to manage.

Economic exposure in Forex online, we talk of unexpected changes in the rates of exchange because the expected changes are reflected in the quotations of market in the form of forward margin as well as it is taken note by the companies.  In budgeting for the future, a company with Forex online exposure will base its calculations on the forward rates and not on the spot rates. Therefore, it is only the unexpected movements in the rates of exchange that affect the cash flows anticipated in trading Forex.

Real trading online rate of exchange between two currencies is the nominal rate of exchange adjusted for difference in the rate of inflation in the countries concerned.  If the power of purchasing parity holds, the currency of the countries with inflation higher will depreciate in nominal terms, but the relating power of purchasing of the currencies will remain the same.  In other words, the real trading online rate of exchange will not change.

If the trading online rate of exchange remains static, even though there is a change in the nominal rate of exchange, the cash flows of the company will not be affected.  This is because the relative powers of purchasing of the currencies remain the same.  There is no change in the competitiveness of the product due to price fluctuations.

In certainty, it is seen that the power of purchasing parity holds only in the long run.  In the short run, the rates of exchange tend to vary in real terms giving rise to economic exposure.

Thus, the exact impact the rate of exchange change will have on the cash flows of the company is dependent on so many factors, measuring economic exposure becomes difficult.  Many are the factors over which the company has no control. All that is possible is to estimate with certain basic assumptions regarding the impact likely on each item of the cash flow of the company.  Following are the some of the assumptions of trading online that can be made:

• Costs will decrease or increase; sales price remains constant.
• Volume of the sales will decrease or increase; sales costs and price remains constant.
• Price of the sales decreases or increases; costs will also decreases or increases but by a lesser degree.
• Price of the sales decreases or increases; costs will remain the same.
• All variables remain the same.