What are the best times to trade for individual currency pairs?

The foreign exchange market operates 24 hours a day and as a result it is impossible for a trader to track every single market movement and make an immediate response at all times. Timing is everything in currency trading. In order to devise an effective and time-efficient investment strategy, it is important to note the amount of market activity around the clock in order to maximize the number of trading opportunities during a trader’s own market hours.

Besides liquidity, a currency pair’s trading range is also heavily dependent on geographical location and macroeconomic factors. Knowing what time of day a currency pair has the widest or narrowest trading range will undoubtedly help traders improve their investment utility due to better capital allocation. This chapter outlines the typical trading activity of major currency pairs in different time zones to see when they are the most volatile.

For example : Asian Session (Tokyo): 7 P.m.–4 A.m. EST

FX trading in Asia is conducted in major regional financial hubs; during the Asian trading session, Tokyo takes the largest market share, followed by Hong Kong and Singapore. Despite the flagging influence of the Japanese central bank on the FX market, Tokyo remains one of the most important Dealing centers in Asia. It is the first major Asian market to open, and many large participants often use the trade momentum there as the benchmark to gauge market dynamics as well as to devise their trading strategies. Trading in Tokyo can be thin from time to time; but large investment banks and hedge funds are known to try to use the Asian session to run important stop and option barrier levels. Figure 5.1 provides a ranking of the different currency pairs and their ranges during the Asian trading session.

For the more risk-tolerant traders, USD/JPY, GBP/CHF, and GBP/JPY are good picks because their broad ranges provide short-term traders with lucrative profit potentials, averaging 90 pips. Foreign investment banks and institutional investors, which hold mostly dollar-dominated assets, generate a significant amount of USD/JPY transactions when they enter the Japanese equity and bond markets. Japan’s central bank, with more than $800 billion of U.S. Treasury securities, also plays an influential role in affecting the supply and demand of USD/JPY through its open market operations. Last but not least, large Japanese exporters are known to use the Tokyo trading hours to repatriate their foreign earnings, heightening the fluctuation of the currency pair. GBP/CHF and GBP/JPY remain highly volatile as central bankers and large players start to scale themselves into positions in anticipation of the opening of the European session.

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Core Inflation Slows in November But no Deflation

A important measure of inflation fell to its lowest level in more than four years last month, data on Wednesday showed, but economists still don't expect the trend to translate into Japan-style deflation.
Growth in the core price index for personal consumption expenditures, which strips out volatile food and energy prices, slowed to 1.9 percent in November compared to a year ago from 2.0 percent the month before, the Commerce Department said.
This is the lowest reading since March 2004, when the United States was rebounding after a deflation scare, and represents a half percentage point drop from the recent peak of 2.4 percent hit in July.

The rapid decline places the index securely within the 1 percent to 2 percent "comfort zone" of Federal Reserve policy-makers, who watch the index closely for signals on the inflation trend.
Deflation can be hard to stop once it builds momentum, but economists said there were enough prices still moving higher to make it a remote risk for the time being.
"We're unlikely to see this pace of deceleration continue over the next few months, so I don't think we're going to be pushing 1 percent by mid-year," said Dean Maki, co-chief U.S. economist at Barclays Capital in New York.

Deflation, defined as a broad and sustained decline in general price levels, can harm an economy by encouraging consumers to postpone spending because they think prices will fall in the future, depressing demand.
"In the current environment that seems unlikely because you are seeing so many prices continuing to rise, even on a month on month basis," said Maki.
Japan suffered from a decade of deflationary stagnation in the 1990s, which only ended when the central bank used unconventional policy tools to quantitatively ease monetary conditions by driving up bank reserves.

The Fed has already deployed its own version of unconventional easing measures by pumping over $1 trillion into credit markets with the aim of driving down private sector borrowing costs to stimulate spending and investment.
The Fed dramatically lowered interest rates to almost zero last week in order to preserve price stability and has said that it thinks the risks of deflation are not large at this point, but remain on its radar screen.
"Policy-makers are probably more focused on the risk that the rate passes through the band to the lower side over the near-term, given the continued downtrend underway in commodity prices," said Mike Englund, chief economist at Action Economics, referring to the Fed's perceived inflation comfort zone.

[Partnership With ForexGen]

ForexGen offers three types of business partnerships:

*Introducing Broker
*White label
*Money Manager

ForexGen Introducing Brokers, White Label and Money Manager holders are recognized as a strategic business partners. The main focus of our service is to satisfy our partner's needs in order to deal with a qualified service and gain a huge income sharing plan.

[ForexGen] provide appropriate services satisfying the needs of all business partner's specified situation and requirements.