Decimalized Pricing

The dbFX trading platform offers decimalized pricing, giving clients more precise FX prices by adding an extra digit to every currency rate.

Also referred to as fractional pips, prices are quoted in tenths of a pip to provide tighter spreads for our clients.

Why does dbFX offer decimalized pricing?

The extra digit of precision offered through decimalized pricing should reduce bid/ask spreads on every currency pair. Tighter spreads allow us to provide our clients with very competitive transaction costs.

How does decimalized pricing affect the value of a pip?

For the EUR/USD currency pair for example, the value of a one full pip movement from 1.4415 to 1.4416 is worth $10.00 for one 100K lot, for a USD based account. With decimalized pricing the currency can move in smaller increments, with a market movement as small as 1/10 of a pip, such as a market move from 1.4415⁰ to 1.4415¹. This 1/10 ^th of a pip increment movement is valued at $1.00 for one 100K lot, for a USD based account, 1/10 of the value of a full pip.

Who benefits from decimalized pricing?

Decimalized pricing benefits all clients, although it is particularly suited to high volume traders and those using automated trading strategies via an API.

CANADA FX DEBT

CANADA FX DEBT-C$ hits 9-day low vs US$ on growth fears

Fri Jul 16, 2010 4:32pm BST

* C$ at 94.95 U.S. cents on Friday morning
* Concerns over U.S. recovery hurting commodity currencies
* Bonds rally in safe-haven bid (Adds details following U.S. data releases)
By John McCrank
TORONTO, July 16 (Reuters) - Canada's dollar sank to a nine-day low against its U.S. counterpart on Friday as growing concerns about the strength of the U.S. economic recovery and the pace of growth in China dampened demand for commodity-based currencies.
Canada is a major exporter of commodities such as oil, natural gas, copper, and gold, and about three-quarters of the country's exports are absorbed by the United States.
A raft of recent U.S. economic data has come in weaker than market forecasters had predicted, stoking concerns that the health of the world's No. 1 economy is taking a turn for the worse.
Data this week out of China also prompted concerns among market players that growth there is less robust than expected.
"We remain Canadian dollar bears because we think that the increased uncertainty about the U.S. and the Chinese recoveries will continue to weigh on sentiment and therefore your commodity-based currencies," said Matthew Strauss, a senior currency strategist at RBC Capital Markets.
"The Canadian dollar is particularly vulnerable given that the focus currently is on the weakness coming out of the U.S."
At 10:55 a.m. (1455 GMT), the Canadian dollar CAD=D4 was at C$1.0532 to the U.S. dollar, or 94.95 U.S. cents, down from Thursday's close at C$1.0388 to the U.S. dollar, or 96.26 U.S. cents.
The currency fell as low as C$1.0558, or 94.71 U.S. cents, a 1.6 pct from the Thursday's close, marking its biggest intraday drop this month.
The softness came despite a weaker greenback, which slumped to a two-month low against the euro and a broader basket of currencies. It hit a seven-month low against the yen.
The U.S. dollar extended losses after the Thomson Reuters/University of Michigan preliminary July consumer sentiment survey came in much weaker than forecast. [ID:nN16126985]
Most commodities are priced in U.S. dollars and a weaker greenback makes it cheaper for holders of other currencies to buy them. But the price of oil slid below the $77 a barrel mark after the U.S. consumer sentiment data was released. [O/R]
Gold fell below $1,190 an ounce as demand was seen as flagging, and copper prices fell sharply. [ID:nLDE66F0VL][ID:nLDE66F0S2]
"It's interesting that the Canadian dollar is struggling even against its commodity peers," Strauss said. "All of them are in trouble given the global risk aversion, but because most of the current risk aversion emanates from weak data releases out of the U.S., it seems to be more vulnerable."
The next big Canadian-focused market event will be the Bank of Canada's interest rate decision on Tuesday. Market expectations are leaning toward an increase in the bank's key rate. BOCWATCH
Generally, that would stoke demand for the currency due to possibility of higher returns, but that may not be the case this time, said Camilla Sutton, a currency strategist at Scotia Capital.
"Increasingly it's expected that even though they'll hike interest rates, the statement itself may be more dovish than the previous one, which could keep this downward pressure on Canada even into the interest rate hike."
Canadian primary dealers and global forecasters surveyed by Reuters expect the bank will raise its key overnight interest rate next week by 25 basis points to 0.75 percent, though the pace of subsequent hikes is less clear. [CA/POLL]
BONDS RALLY
Canadian bond prices rallied along with U.S. Treasuries as worried investors sought the safety of government debt.
The other important piece of U.S. data out on Friday was the consumer price index, which showed that inflation was down for the third month in a row in June. It was largely in line with forecasts.
"Even though the core inflation came in a snick above expectations, the market seems to be seizing on any sign of weakness in any of the reports," said Doug Porter, deputy chief economist at BMO Capital Markets. "Headline inflation appears to be in full retreat."
Stocks in the U.S. and Canada were down 1.5 percent and 1 percent respectively on disappointing revenues in U.S. corporate earnings releases and on the darkening mood on the economy. [ID:nN16102610]
Canada's two-year bond CA2YT=RR was up 11 Canadian cents to yield 1.606 percent, while the 10-year bond CA10YT=RR added 44 Canadian cents to yield 3.185 percent. (Reporting by John McCrank; editing by Peter Galloway)

Analysis

Analysis - New safe-haven currencies shine amid debt fears

Related Topics

A Canadian dollar coin, commonly called a ''Loonie'' and an American dollar bill are seen in this staged photo in Toronto, March 17, 2010.

Credit: Reuters/Mark Blinch

By Wanfeng Zhou

NEW YORK | Fri Jul 23, 2010 9:53pm BST

NEW YORK (Reuters) - Investors' love affair with the "other" currencies may be just beginning.

The Canadian dollar, Australian dollar and Swedish crown are gaining in popularity as investors increasingly look for alternatives amid troubling outlooks for the United States, euro zone and Japan.

Global reserve managers are leading the trend. In the first quarter, central banks who report their reserves added a record $24.5 billion (£15.9 billion) of "other" currencies to their portfolios, Nomura data show.

The share of reserves in "other" currencies stood at 3.7 percent in the first quarter, up from 1.5 percent at the beginning of this decade. It's generally believed this category includes currencies of Canada, Australia, Norway, Sweden and New Zealand.

Jens Nordvig, head of G10 foreign-exchange strategy at Nomura in New York, said the growing inflows into what he called the "new safe havens" are set to continue as central banks rethink their allocations, a development that could boost these currencies in the years ahead.

"It's going to be a massive amount of money that potentially comes in, and there could be a very big impact on these currencies even if it's a relatively moderate amount of central bank portfolios," he said.

Such demand may have already helped cushion the impact on some of these currencies from the recent global turbulence.

The Canadian dollar, for example, has shown resilience in recent months despite a rout in commodity prices and stocks worldwide on economic worries.

Since mid-April, the MSCI world equity index has fallen 10 percent, while oil prices have lost 8 percent. During the same period, the loonie lost only 2.6 percent versus the U.S. dollar, going as low as C$1.0851. After the collapse of Lehman Brothers in late 2008, the loonie fell as low as C$1.3017, according to Reuters data.

"The Canadian dollar is a currency you want to own," said David Rosenberg, chief economist and strategist at money management firm Gluskin Sheff in Toronto. "Canada has basically been re-rated coming out of the credit crisis as a bastion of stability in an increasingly unstable world."

As a percentage of GDP, Canada's general government net debt is estimated at 32 percent for 2010, the lowest among the Group of Seven economies.

In contrast, Japan has the highest net debt at 122 percent and the United States is at 66 percent, according to data from the International Monetary Fund.

A LIMIT TO THIS 'LOVE AFFAIR'

Currencies of smaller G10 economies tend to have better liquidity and track records of inflation than emerging market currencies, making them good candidates as safe havens.

Their healthier fiscal outlook also makes them appealing as investors increasingly discriminate between currencies with strong sovereign balance sheets and weaker ones.

To be sure, there's a limit on how much reserve managers can invest in the "other" currencies because of the smaller size of these countries' domestic bond markets.

The size of Canada's and Australia's domestic government debt markets are $905.5 billion and $228 billion, respectively. In comparison, the U.S. domestic government debt market totalled $9.5 trillion, the second largest after Japan's local market with $9.7 trillion, Bank for International Settlements data show.

Emma Lawson, currency strategist at Morgan Stanley, said 1 percent of all global reserves would account for 74 percent of the local Australian sovereign debt market and "there isn't the scope for any more."

The Canadian market is "only slightly larger," she said, with 1 percent of global reserves taking up to 30 percent of the local market, and if it increased to 3 percent, this would account for 81 percent and would be "arguably too high."

"For long-term holders like central banks, these commodities currencies provide good diversification and to some extent, one could call it gaining safe-haven status," said Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto. "But given their liquidity is far, far less than the majors, they can never serve as full-fledged safe-haven currencies."

Strauss also said while the Canadian and Australian dollars provide a relatively safe store of value over the long term, they "do remain cyclical currencies as well, given their commodity status," which means they tend to fluctuate more than the major currencies.

Still, debate over the dollar's role in the global economy continues.

Talk of more stimulus money and the possibility of a double-dip recession could lead to escalating worries about the swelling U.S. deficits.

Jerome Booth, head of research at Ashmore Investment Management in London, said investors "should never equate the dollar with risk-free." Booth added that the argument that the U.S. Treasury market is the most liquid in the world may not hold true if a few central banks started selling.

FXpert

Global Markets | US Markets | Quotes | Currencies | Commodities | Earnings

Analysis - New safe-haven currencies shine amid debt fears

NEW YORK (Reuters) - Investors' love affair with the "other" currencies may be just beginning.

Week ahead - Stressed euro likely to fall

NEW YORK (Reuters) - Investors are likely to give the euro a bearish bias in the coming week after European bank stress tests, which showed that most banks had sufficient capital cushions, faced questions about their credibility.

Analysis - Rising euro zone money rates set to support euro

LONDON (Reuters) - Higher euro zone money market rates combined with falling U.S. interbank rates are likely to underpin the euro which has rebounded from a four-year low hit against the dollar last month.

Analysis - Rough road ahead for forint as Hungary spurns IMF

PRAGUE (Reuters) - The breakdown in Hungary's talks with international lenders may be chiefly a domestic political ploy but the Fidesz government is likely to end up suffering for its failure to take more account of its reputation abroad.

21 Jul 2010

Analysis - Peru's currency to rise despite government measures

LIMA (Reuters) - Peru's currency will continue to gain against the U.S. dollar, despite official measures to slow its advance as foreign capital floods into the Andean country, currency traders and analysts say.

Goldman anger

Goldman anger is misplaced

The following is a guest post by Dana Radcliffe, a senior lecturer of business ethics at the Johnson Graduate School of Management at Cornell University. The opinions expressed are his own.

The day after the Securities and Exchange Commission announced its $550 million settlement with Goldman Sachs, three noted business journalists appeared on a popular current affairs TV show. They concurred that the deal was a win for Goldman since the dollar amount was surprisingly low — equal to what the firm earns in just a few weeks. They felt the SEC’s case was weak and that, legally, Goldman had done nothing wrong and would have prevailed in court.

They also agreed that people were understandably appalled by some of the firm’s conduct in the subprime mortgage crisis in light of the flood of emails and other internal company documents released by Congress and Goldman. Grasping for a way to express what was repellent about such actions, one of the writers described them as “icky.” Another airily noted that they might be seen as wrong “in some ethical, moral, or philosophical sense.”

What is remarkable is while all three pundits shared the common view that Goldman had behaved offensively, they would not say that Goldman’s behavior was “unethical” or “morally wrong.”

This reminded me of the most notorious article ever published in the Harvard Business Review — a 1968 piece by Albert Carr, a former advisor to President Truman. In it, Carr argued that business is akin to poker, where bluffing is often legal and expected. While allowing that deception in one’s personal life violates “private morality,” Carr contended that business and poker are strategic competitions whose rules permit participants to profit from misrepresentations. Indeed, he wrote, being a skilled practitioner in either endeavor requires occasional bluffing.

Carr has been rightly faulted for ignoring crucial differences between poker and most commercial interactions, where asymmetries of power and information typically give executives a distinct advantage over customers, employees, and other stakeholders. However, what about business activities that do resemble those of players in a poker game in which sophisticated investors bet against each other? Could it be that when a type of business activity is truly analogous to poker some artful moves that don’t break any laws qualify as bluffs?

The fact is, in competitive transactions where all parties have access to the same information, it’s not wholly implausible to see Carr’s argument apply to business dealings that closely approximate poker games. The Goldman Sachs deal that sparked so much public anger and prompted the SEC lawsuit fits this description.

However, Goldman took advantage of the buyers by withholding information — about how the securities had been designed — that might have deterred the buyers from taking the deals, in which they lost hundreds of millions of dollars. But, since the buyers were perfectly capable of evaluating the riskiness of the securities for themselves, it’s far from clear that Goldman owed them any further information. They were “icky” transactions, but not illegal or even unethical.

Much of the opprobrium heaped on Goldman Sachs for these transactions is misplaced. But there is something deeply wrong with an industry that has been increasingly devoted to concocting “investments” that are nothing more than high-risk gambles with the savings of millions of people.

FTSE higher, driven by strong banks, oils, miners

FTSE higher, driven by strong banks, oils, miners

(Reuters) - Strong banks led Britain's top share index higher by midday Thursday, on upbeat investor sentiment ahead of European stress test results, while firmer commodity prices buoyed miners and energy stocks.

By 1104 GMT, the FTSE 100 was up 53.56 points, or 1.0 percent, at 5,268.20, having closed up 1.5 percent in the previous session.

Banks provided the main strength for the blue chip index, with Lloyds Banking Group and Barclays the best off, adding 2.8 percent and 2.4 percent respectively.

"Banks are doing okay. I think that's an expression of the fact that the UK banks and indeed many banks are expected to pass the stress tests quite easily tomorrow," said Peter Dixon, an economist at Commerzbank.

The European Union examination of banks' financial strength is due Friday and is expected to show generally positive results for Greece, Italy and Ireland and a few failures in Portugal and Spain.

"It is slightly odd that markets have got such positive momentum behind them ahead of a big event, but I think it's indicative of the fact that markets think these stress tests aren't going to change the way they view the world," Dixon said.

Buyers came in for the miners as metals prices rallied, with copper hitting its highest in nearly two months, lifted by a weaker dollar.

Kazakhmys and Anglo American, were the best performers in the sector, both rising 2.3 percent.

Energy stocks also notched up good gains, with BG Group and Royal Dutch Shell adding 0.7 percent and 1.2 percent respectively, while BP climbed 1 percent on building optimism about ending the worst oil spill in U.S. history.

There was some positive economic data, as British retail sales volumes received a World Cup boost in June after strong sales of electrical goods drove a faster-than-expected 0.7 percent monthly rise, official data showed.

But investors' underlying mood was still cautious following a downbeat assessment of the U.S. recovery by Federal Reserve Chairman Ben Bernanke Wednesday.

The Fed stands ready to ease monetary policy further if the budding U.S. economic recovery withers, Bernanke said, describing the outlook as "unusually uncertain."

U.S. stock index futures pointed to a higher open on Wall Street following the previous session's steep losses after Bernanke's comments, as investors awaited weekly jobless claims, due at 1230 GMT, as well as the Conference Board leading indicators and existing home sales, both due at 1400 GMT.

Investors were also looking ahead to the next batch of U.S. earnings, with Microsoft and Amazon.com among those reporting on Thursday.

CAPITA CLIMBS

Capita was the top FTSE 100 riser, up 5.4 percent, after the outsourcing group posted a 15 percent rise in first half profit and said it was seeing buoyant demand across the private and public sectors, strengthening its bidding pipeline.

In reaction to the results, Evolution Securities upped its rating for Capita to "buy" from "add."

Software firm Autonomy was the top FTSE 100 faller, down 12.5 percent after second-quarter earnings.

"We estimate that after adjusting for one-offs, Autonomy failed to grow its core business in Q2 2010," KBC Peel Hunt said in a note, maintaining its "sell" rating.

And Imperial Tobacco shed 2.3 percent after it said cigarette volumes fell 4.3 percent in the nine months to June.

Book a cruise-at

When it comes to cruises, there is something for everyone: from classic destinations like the Caribbean, Mexico and Alaska, to global destinations like the Mediterranean, Hawaii, or more “exotic” locales such as Africa, Antarctica, or the Galapagos Islands. With the convenience of a modern cruise, the world literally awaits you…

However, in these difficult economic times, there is something that can make even the most spectacular cruise even better: up to 75% off its price!

There is one service that is committed to helping you save—big—on cruises around the globe. Founded 25+ years ago, Vacations To Go has saved millions of dollars on discount cruises for thousands of travelers just like you.

That’s because a quarter of a century ago, Vacations To Go innovated a way for the cruise lines to sell unsold cabins close to departure at huge last-minute discounts without affecting the overall market. Rather than offering “sale” prices to the public and upsetting full-fare customers buying in advance, cruise lines allowed Vacations To Go to market unsold cabins to their confidential, exclusive client list at huge savings.

As a result, Vacations To Go has now provided hundreds of thousands of their members with great cruise vacations at huge savings—often as much as 75% off! The company partners with the world’s largest cruise lines and receives high praise for its outstanding customer service.

Getting on this confidential list is easy. All you have to do is register on their website—at no charge— to become a member. At that point Vacations To Go will IMMEDIATELY begin offering you all of these great discounts!

After you’ve registered, you’ll have instant access to great features like the “90-Day Ticker," a comprehensive listing of last-minute deals by all the world’s best lines. Here, customers typically save anywhere from 50% to a whopping 75% off the everyday rate.

Additionally, Vacations To Go’s "Find A Bargain" displays an incredible array of discounts, including 2-for-1 early bird discounts and even lower rates for people age 55+, active and retired military, airline employees, teachers, firefighters, police and past cruise passengers.