Currency Trading

The number of currency trades made each day in the United States has skyrocketed, the Federal Reserve said Thursday in a report likely to fuel fears that volume is getting too high for governments to maintain order. According to the report, issued by the Federal Reserve Bank of New York, average daily foreign-exchange volume has leaped to $192 billion since 1989, up 49% from 1989.

Here's an example of how a currency trade might work: • A person who believes that the European economy is strengthening decides to buy euros, thinking this currency will become more valuable in relation to the dollar. • The person opens an account with one of 13 registered foreign exchange broker-dealers for home investors, downloads the dealer's proprietary trading platform onto his computer and deposits $500, typically the minimum stake. • Opening the trading platform, the customer sees that the dealer is willing to sell a euro for $1.45000.

A federal judge has ordered a Glendale currency trading firm and its president to repay more than $1 million to small investors, many of them from Russia, regulators said. U.S. District Judge Percy Anderson in Los Angeles also fined Fintrex Inc. $4 million and its president, Arman Ovsepyan, $1.3 million, the U.S. Commodity Futures Trading Commission said. Fintrex and Ovsepyan were charged in 2001 with marketing illegal foreign currency futures contracts.

Dorothy Ouma began trading foreign currencies after seeing a TV commercial touting it as a way to make extra money, something she could use as a single mother raising three children. "The ads made me think, 'This is easy,'" said Ouma, 52, an administrator with the Grand Prairie, Texas, police department. Ouma used her credit card to fund an account with an online currency broker. Within a few weeks of swapping dollars for yen and euros, she said, her $3,000 of borrowed money was gone.

Relative calm prevailed in the currency markets, leaving the dollar mixed. * Treasury bond yields fell, partly reversing a steep selloff earlier this week. The yield on the Treasury's main 30-year bond, which falls when prices rise, was 7.41%, down from 7.48% Wednesday. * Stock prices staged a mild rally, pulling out of a three-day slump with encouragement from bargain hunters. Currency In New York, the dollar was mixed in unhurried trading, with no significant economic news to push it.

Poland today introduced free currency trading for the first time since World War II as part of an effort to attack the black market and pave the way to convertibility of the Polish zloty. A long line gathered at Warsaw's central PKO savings bank, one of a handful in the capital that started buying and selling hard currency, as the new foreign exchange law came into force.

Trading in the currencies of the four newly industrializing countries offers little opportunity for profit, despite calls by the United States for the NICs to allow their currencies to appreciate, international currency dealers say. Traders gathered here for an annual meeting that ended over the weekend said that while the economies of the NICs--South Korea, Singapore, Taiwan and Hong Kong--have boomed, their exchange rates have been tightly controlled by their central banks.

Bank of America said Monday that it will close its foreign exchange trading operation in New York and shift the trading to Los Angeles. Most of the 104 employees in B of A's New York operation will be laid off by Dec. 1. The bank said some have been offered jobs in Los Angeles, but a company official said the number was "only a handful."

Federal regulators sued a defunct Newport Beach brokerage house and its former owners Thursday, saying the company pulled in more than $16 million in sales commissions in an alleged investment fraud. Currency Trading International Inc. persuaded more than 900 clients to invest in foreign currency options, telling them they could double or triple their money within days, the U.S. Securities and Exchange Commission's complaint said.

Psssst. Tensions were building on the Korean Peninsula. North Korea had stymied U.S. efforts to get international inspectors into the North's nuclear facilities. Then, on June 9, came word the State Department had advised American citizens to leave South Korea. Had the dreaded showdown arrived? Would war erupt? In sleek trading rooms at big banks and brokerages in New York and London, legions of currency dealers leaped into action.

The leaders of the world's 20 major economies on Friday ended a frequently rancorous two-day summit in this northeast Asian capital without reaching agreement on specific steps to avert damaging currency and trade wars. There were far more setbacks than gains, but President Obama suffered the biggest disappointment, falling short in his attempt to forge a unified approach to boosting the global economy. In one blow, G-20 members refused to endorse a U.S. effort to force China to raise the value of its currency, prolonging a bitter dispute that many say could eventually lead to a global trade war. Before world leaders left the city, they issued a watered-down statement agreeing merely to refrain from "competitive devaluation" of currencies.

Reporting from Bogota, Colombia, and Caracas, Venezuela -- Nurse Luisa Perez Garcia thought there was no time to lose. So, first thing Monday morning, she rushed down to the Electropolis appliance store in the Sabana Grande section of Caracas and bought a new TV and refrigerator, purchases she had hoped to defer until later this year. Garcia was among the thousands of Venezuelans flocking to stores to snap up appliances, auto parts, electronics and other imports before they feel the full impact of President Hugo Chavez's decision last week to officially adjust the nation's currency for the first time since 2005.

The falling dollar is stoking fears of inflation and worries about the country's eroding power in the world. But for now it may be just the tonic that's needed to help the U.S. economy get back on its feet. By making American products cheaper for most foreign buyers, the dollar is helping many U.S. companies boost their overseas sales. The weakening dollar also gives domestic businesses a competitive edge at home, making their products cheaper than rival imports. The greenback's value slipped for a fourth straight day Thursday, to its lowest level in more than a year against other major currencies.

If you've been trying to find a place to invest your money and are feeling uneasy with U.S. stocks and bonds, consider looking overseas. You should know that an increasing number of experts are encouraging clients to boost their holdings in international currencies -- a once-rarefied market that's become more accessible to individual investors. The reason they're pushing foreign currencies is simple. Rising U.S. government debt levels suggest future inflation and continuing devaluation of the dollar.

Could the world's currency of choice have the face of Mao Tse-tung on it, not George Washington? Quixotic or not, the Chinese are preparing for that day. In a series of what might be called baby steps, Chinese officials recently have moved to globalize the yuan and promote its influence overseas, with Shanghai designated as command central.

The Mexican peso plunged to new lows against the dollar Monday as global investors again rushed for the perceived safety of the greenback despite the horrid U.S. economy. The peso was trading at 15.47 per dollar for large transactions between banks, compared with 15.15 on Friday and 14.5 two weeks ago. Retail buyers and sellers would be quoted different rates, but the trend is the same: more peso weakness.

If you've been trying to find a place to invest your money and are feeling uneasy with U.S. stocks and bonds, consider looking overseas. You should know that an increasing number of experts are encouraging clients to boost their holdings in international currencies -- a once-rarefied market that's become more accessible to individual investors. The reason they're pushing foreign currencies is simple. Rising U.S. government debt levels suggest future inflation and continuing devaluation of the dollar.

SEC Launches Inquiry Into Dell Currency Trading: The Securities and Exchange Commission began an informal investigation of foreign currency trading by Dell Computer Corp., an Austin, Tex., manufacturer of personal computers. Staff attorneys from the SEC's enforcement division informed Dell's lawyers on Nov. 30 that the agency would "make an informal inquiry into Dell's financial statements regarding foreign currency activities," according to a Form 8-K the company filed with the SEC.

The U.S. gave the world the worst financial crisis since the Great Depression. In return, global investors reward us by dumping their own currencies in favor of the dollar. Make sense? Although the greenback fell slightly Thursday after weeks of soaring against most of its major and minor rivals, the world's hunger for the U.S. currency shows no serious signs of abating. The euro plunged Wednesday to a two-year low of $1.285, from $1.313 on Tuesday.

The way things are going with the dollar, the cost of a London, Paris or Australia vacation may soon be back within the realm of possibility for some Americans. The formerly weakling greenback has been on a hot streak since mid-July, racking up big gains against many currencies. The dollar's rally against the British pound has been particularly striking: It took $2 to buy one pound on July 15. Now currency traders are paying $1.83 for a pound, down 8% in six weeks and the cheapest the British currency has been in two years.