Q. Dear Josh, I am starting to trade more on my mobile. What should I be careful of?
A. First and foremost, I think mobile dealing is fantastic. It allows you to keep abreast of the markets wherever you are, whenever you want. With many markets available to trade 24 hours a day, and especially since the markets have been volatile recently, it is imperative that you can react with just a few clicks of a button. For me, the future of spread betting is mobile dealing. That said, along with the advantages, there are risks that you should consider. The concept behind mobile dealing is to increase your potential to access prices whenever you want. The disadvantage could be that the more you look at prices moving, the higher is the potential for you to make impulse trades without proper research and analysis. Make sure you have carefully analysed your market before trading, regardless of whether you execute your trades via a mobile, online or phone.
Q. Dear Josh, the yen continues to strengthen against the dollar. Will this entice Japan to intervene once again?
A. There is every chance it could. The move by Japan to intervene a little over two weeks ago has, at least in the short term, not worked. Having initially surged from 82.85 to 85.77, dollar-yen has recovered well and quickly, with 10 days of straight gains against the US currency forcing the price back towards the 83.50 level.
It is hard to see Japan succeeding in devaluing its currency without co-operation from the US, which will also want to keep its currency from strengthening too much in case this hurts its exports. Moreover, with the Fed indicating it is ready and willing to start a second round of quantitative easing, this is keeping the US dollar pinned down. My hunch, as I said a few weeks ago, is that there will be a lot more to play out on this one.
Only last week, Japan’s vice finance minister said that he expects the Bank of Japan (BoJ) to make appropriate policy decisions this week at a monetary policy meeting to support Japanese growth so there could well be some volatility in dollar-yen this week.
Learn more about the markets and spread betting with Josh at his free City Index seminars.