WHAT DO WE THINK ABOUT CONTRACT RATES RUMOR TELL AND EMERGING MARKETS??
GOOD AFTERNOON DINAR FRIENDS. TODAY IS OCTOBER 19TH AND THE WAIT IS STILL ON AND THE EXCUSES ARE STILL COMING IN.
I’M POSTING NOW ON EMERGING MARKETS AND HOW THEY WORK ON MY BLOG SITE AND FOUND THIS TO BE OF INTEREST AND WANTED TO SHARE IT WITH YOU
ALL. THE TALK IN THESE DINAR ROOMS IS STILL ABOUT HIGH RATES AND CONTRACT RATES AND I WHILE I AM NOT GOING TO TELL YOU WHAT TO BELIEVE I DO WANT YOU TO UNDERSTAND HOW MARKETS AND CURRENCY PRICING WORK.
SO LET’S HAVE A LOOK AND SEE IF THIS BIT OF INFORMATION IS USEFUL TO ANYONE OUT THERE OK.
WHAT ARE EMERGING MARKETS?
WHAT ARE EMERGING MARKETS? VERY GOOD QUESTION SO LET’S HAVE A LOOK.
AN EMERGING MARKET IS A COUNTRY THAT HAS SOME CHARACTERISTICS OF A DEVELOPED MARKET BUT DOESN’T QUIT MEET THE STANDARDS TO BE CALLED A DEVELOPED MARKET.
WHICH COUNTRIES ARE ON THE TOP OF THE EMERGING LIST?
THE 4 LARGEST RIGHT NOW ARE THE BRICS COUNTRIES, BRAZIL, RUSSIA, INDIA AND CHINA.
THE FIVE NEXT LARGEST EMERGING MARKETS ARE SOUTH KOREA, MEXICO, INDONESIA, AND SAUDI ARABIA.
WHILE WE ARE ON THIS TOPIC OF EMERGING MARKETS I WANT TO INTRODUCE YOU TO A NEW TERM THIS IS CALLED FRONTIER MARKETS.
WHAT ARE FRONTIER MARKETS?
A FRONTIER MARKET IS A TYPE OF DEVELOPING COUNTRY WHICH IS MORE DEVELOPED THAN THE POOREST AND LEAST DEVELOPING COUNTRIES BUT IS STILL NOT ON THE WATCH LIST FOR INVESTMENT PURPOSES.
FRONTIER MARKETS OR BETTER YET PRE-EMERGING MARKETS ARE INVESTABLE BUT POSE A HUGE RISK.
SO LET’S HAVE A LOOK A FEW INDEXES AND SEE WHAT THEY ARE SAYING ABOUT EMERGING MARKETS AND PRE-EMERGING MARKETS AND LET’S HAVE A LOOK AT WHICH COUNTRIES ARE ON THE LIST.
HERE IS FROM THE FTSE INDEX 100. THIS LIST WAS JUST UPDATED IN SEPTEMBER
A formal review of country classification within the FTSE global equity indexes is conducted on an annual basis each September using a comprehensive, transparent and consistent methodology.
This annual review incorporates ongoing country classification research and classifies stock markets as
Developed, Advanced Emerging, Secondary Emerging or Frontier within the FTSE global equity indexes.
Following the September 2016 annual review, FTSE Russell confirms that there will be no Country Classification changes in September 2017.
HERE LET’S HAVE A LOOK AT WHAT THE MSCI INDEX SAYS.
MSCI ANNUAL MARKET CLASSIFICATION REVIEW
During the Annual Market Classification Review, MSCI analyzes and seeks feedback on those markets it has placed under review for potential market reclassification. Every June, MSCI communicates its conclusions from the discussions with the investment community on the list of countries under review and announces the new list of countries, if any, under review for potential market reclassification in the upcoming cycle.
I JUST THOUGHT SHARING THIS INFORMATION MIGHT BE HELPFUL FOR SOME FOLKS AND FOR ANYONE WANTING TO UNDERSTAND HOW MARKETS WORK.
IF YOU WANT TO FOLLOW THE GLOBAL FINANCIAL SYSTEM PLEASE JOIN US OVER AT MY BLOG WWW.MYLADIES.CO
I ENCOURAGE EVERYONE TO UNDERSTAND HOW MONEY AND MARKETS AND INDEXES AROUND THE WORLD WORK IN REAL TIME NOT IN HEAR SAY SECRET TIME.
I DO NOT KNOW WHAT THE FUTURE HOLDS FOR ALL OF US DESPITE THE RUMORS I DO NOT HAVE A CRYSTAL BALL BUT I CAN READ AND DO UNDERSTAND HOW MARKETS WORK AND HOW CURRENCY PRICES ACCORDING SUPPLY IN DEMAND.
HERE HAVE A LOOK AND COME TO YOUR OWN CONCLUSIONS. WHAT IS REALLY HAPPENING IN REAL TIME DOES NOT REALLY MATCH WHAT HEAR SAY IS CALLING FOR.
How are currency prices determined?
Most of the currencies out there are floating currencies, which means the markets dictate their value. Even if there are fixed rate currencies, they are pegged to some major, like the USD, so anyway, the market will dictate their fate. So, what do I mean by this “market dictatorship”?
The exchange rates of the currency pairs always fluctuate because of more reasons.
The first one is because of the supply/demand as to the goods from the market. Imagine that a company has produced 1 million mobile phones and there are 4 million people ready to buy them. The demand for such mobile phones is too high, so it is clear that the price will increase to a point when only 1 million will be able to pay for it. In another situation, imagine that the company produces the same million of mobile phones, but there are only 200 000 people wanting to buy such a product. In the last case the offer is too high, so the price will be reduced so that more people will change their mind and will want to buy it, so that the company doesn't waste its resources and energy.
Keeping these examples in mind, you can also apply them in the Forex. Some of the currencies are more attractive because of the economic situation at a given moment in a given country. For example, if the US economy today shows some positive statistics, the US dollar will become more valuable, and the pairs where it is the base currency(USD/YYY) will go up, while the pairs where it is the quote currency(YYY/USD) will go down.
The second reason why the currency pairs do fluctuate is because of the Purchasing Power Parity. In simple words, if the goods’ price is fluctuating, it will also influence the currency pair value.
The meaning of this factor is as follows: under equal circumstances, the change in the ratio of currency exchange rates between two countries is proportional to the ratio between the prices of domestic and overseas prices. For example, consider the fact that 1 EUR = 1 USD: if the X product in the USA is 1 dollar, in Europe it should be 1 euro.
If tomorrow our X product in the USA gets more expensive, to 1.50 dollars, while in Europe it remains the same, then it means the value of the dollar decreases and the exchange rate will be 1.50 dollars for 1 euro.
Finally, we should make it clear why the supply/demand changes. Here are the reasons:
1. Economic state - this is the most significant economic factor, which depends on the following sub-factors: the growth rate of the economy, changes in the tax system, unemployment and employment, economic condition and the level of stability of the country as a whole.
2. The relative interest rates - The change in relative interest rates is a prerequisite for a change in investors' confidence in the currency. If the rate goes up, the currency becomes more attractive for deposits, so its price increases in relation to other currencies. If the rate drops, there is no point to deposit money, so people get rid of money by investing them in some business, so the currency value decreases.
3. The demand and supply of capital influences the exchange rates.
4. Political changes - any instability in the country could significantly shake the price level, not only within the country but also around the world.
5. The market sentiment.
6. Natural factors - this includes any natural disasters and other natural phenomenon which has a significant impact on the global economy.
FOR THOSE THAT PREFER TO WATCH A SHORT VIDEO OF HOW CURRENCY PRICE IS DETERMINED HERE IT IS.
I WRITE AND YOU DECIDE. AS ALWAYS HAVE YOU HAVE THE BEST WEDNESDAY YOU CAN AND BE CAREFUL OF THE ROLLER COASTER AND THE RUMOR MILL.FACT CHECK ALWAYS.
LOVE TO ALL ….MY LADIES
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Wednesday, October 19, 2016
WHAT DO WE THINK ABOUT CONTRACT RATES RUMOR TELL AND EMERGING MARKETS??
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