forex

EUSD: Trading the U.S. Advance Retail Sales Report

EUR/USD: Trading the U.S. Advance Retail Sales Report

Retail sales in the U.S. is expected to hold flat in April as tax refunds reach consumers however, the outlook for private spending remains bleak as households continue to face a weakening labor market paired with tightening credit conditions. A report by the Labor Department showed the world’s largest economy lost another 539K jobs in April.

Economic factors

Economic factors

These include: (a)economic policy, disseminated by government agencies and central banks, (b)economic conditions, generally revealed through economic reports, and other economic indicators.
Economic policy comprises government fiscal policy (budget/spending practices) and monetary policy (the means by which a government's central bank influences the supply and "cost" of money, which is reflected by the level of interest rates).
Economic conditions include:
Government budget deficits or surpluses
The market usually reacts negatively to widening government budget deficits, and positively to narrowing budget deficits. The impact is reflected in the value of a country's currency.
Balance of trade levels and trends
The trade flow between countries illustrates the demand for goods and services, which in turn indicates demand for a country's currency to conduct trade. Surpluses and deficits in trade of goods and services reflect the competitiveness of a nation's economy. For example, trade deficits may have a negative impact on a nation's currency.
Inflation levels and trends
Typically a currency will lose value if there is a high level of inflation in the country or if inflation levels are perceived to be rising [. This is because inflation erodes purchasing power, thus demand, for that particular currency. However, a currency may sometimes strengthen when inflation rises because of expectations that the central bank will raise short-term interest rates to combat rising inflation.
Economic growth and health
Reports such as GDP, employment levels, retail sales, capacity utilization and others, detail the levels of a country's economic growth and health. Generally, the more healthy and robust a country's economy, the better its currency will perform, and the more demand for it there will be.
Productivity of an economy
Increasing productivity in an economy should positively influence the value of its currency. It affects are more prominent if the increase is in the traded sector

What is forex?.....

The foreign exchange market (currency, forex, or FX) is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. [1]FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market that we see today started evolving during the 1970s when worldover countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system till 1971.

Presently, the FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements.[2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.[3]

The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollar, Pound Sterling, etc., and the need for trading in such currencies

5 Tips to Help You Prepare for Growth Spurts

5 Tips to Help You Prepare for Growth Spurts

Get outside help. Growth is tricky and stressful, so smart business owners rely on outside assistance—such as consultants or SCORE volunteers—to get them through it.

Hire ahead of the need. If you’re growing fast, add a chief operating officer and/or chief financial officer—even if only on a part-time or consulting basis.

Change your own role. Stop "doing everything yourself." Delegate day-to-day operations to others and become the leader, the strategic thinker and the planner—in other words, the CEO.

Weed out customers that don’t contribute sufficiently to your bottom line. Let go of those who distract you from your goal—for example, because they are outside the area in which you want to work or take too much of your time.

Have reserve capital to weather growth’s inevitable bumps. Reserves don’t have to be all cash—they can be excellent receivables or something else that can be turned into cash quickly.once a year, for example—and revise them as necessary.

5 Tips for Effective Business Planning

Clearly define your business idea and be able to succinctly articulate it. Know your mission.

Examine your motives. Make sure that you have a passion for owning a business and for this particular business.

Be willing to commit to the hours, discipline, continuous learning and the frustrations of owning your own business.

Conduct a competitive analysis in your market, including products, prices, promotions, advertising, distribution, quality, service, and be aware of the outside influences that affect your business.

Seek help from other small businesses, vendors, professionals, government agencies, employees, trade associations and trade shows. Be alert, ask questions, and visit your local SCORE office

5 Tips for Developing Policies for Your Business

1) Think ahead. Establish policies before you need them. Doing so helps avert crises and awkward situations, and helps solve problems before they arise.

2)Determine what policies you need. Some you’ll want early in your business include a mission statement, as well as compensation, performance evaluation and employee policies.

3)Get input from key employees, as well as from members of your advisory board, your board of directors, and/or your professional advisors and consultants.

4)Communicate policies to everyone in your business.

5)Review policies on a regular basis

How to Find A Good Accountant

The services of a good accountant can be invaluable to your small business. He or she will help you navigate the maze of tax laws and provide the financial advice you need to manage and grow your business.

While we tend to associate accountants with taxes, keeping you abreast of tax changes and doing your taxes are not the only services a good accountant provides.

Whether you're wondering whether or not to incorporate your business or trying to decide if you should buy or lease a company vehicle, a good accountant will be able to tell you how such a move would affect your taxes and/or your business's growth. If you don't have an accountant working for your business, you need one! But how do you go about finding a good accountant?

1) Ask other business people about their accountants.

Find out who they use and how satisfied they are with the services their accountant provides. If you don't or can't get any worthy referrals using this method, use the phone book and choose several accounting firms. When you call, tell the receptionist what you do and ask for the name(s) of accountants familiar with your type of business. Use this information to create a shortlist of prospective accountants.

2) Call the four or five accountants you've selected and ask to discuss their services.

Ask him or her about his education (such as whether he's a CA or CGA), about his experience with your industry, and about his fees. Use this first contact information to choose two or three accountants to interview.

3) Prepare a short list of questions you want to ask prospective accountants.

It's important that you choose an accountant that is familiar with the special requirements of your business and/or your tax situation, so you can use these to vet potential accountants. For example:

If your business is Internet related, you'll want to find out if the accountant is familiar with the language of e-commerce.

If your business involves periods of work in the U.S., you need an accountant that's knowledgeable about the IRS and has experience completing U.S. tax forms.

If you're thinking about exporting, ask how the accountant might help you develop an export strategy.

I always ask a question about their phone call and/or email policy. It's important that your accountant is easy to contact when you have a question. How accessible is he or she and how do they bill phone call or email advice?

4) Meet with the prospective accountant(s) you've chosen, and ask your questions.

There's nothing like a face-to-face meeting for gauging how well you might work with another person. Besides assessing the accountant's knowledge, see how comfortable you are with him or her and how well the two of you communicate with each other. When you choose an accountant for your business, you're going to be establishing a long term relationship, so feeling comfortable with him or her is important.

After all, an accountant isn't just a tax preparer; he or she can help you build a blueprint for the future of your business.