The global situation is an important aspect to assess to succeed in online stock trading. The stock markets do not exist in isolation, and any financial current can filter down to American shores. Conversely, the Federal Reserve’s activities at home could affect what happens in the markets in the rest of the world.
The Asian, American and Australian Financial Situation
For now, the focus lies on Asian stocks. Stocks in Japan rose as the Japanese yen weakened due to a dollar rally. The Nikkei shot up Monday morning, the 29th of August 2016 even as other parts of Asia experienced equities weakness. There was caution among investors as they waited for the Fed Chair’s speech which they expected to be hawkish. With all concerns addressed in the speech, US shares dropped on Friday. The US stock market experienced its greatest weekly decline since the impact of June’s UK Brexit vote. In Asian trade early in the day, the US dollar was found to be higher, in a broader sense, against most of the local currencies, with the yen falling 0.2% against the dollar. The ringgit in Malaysia fell 0.7% while the Indonesian rupiah fell 0.5% against the dollar respectively. The Australian dollar too slumped 0.4%.
As a result of the strength of the dollar, commodity prices are now lower. An example is the global benchmark, Brent crude which traded at $49.50 per barrel, a drop of 42 US cents. Australia’s S&P/ASX 200 was trading 0.8% lower. Woodside Petroleum Ltd (WPL.AU) fell 1.1% while Oil Search Ltd (OSH.AU), BHP Billiton Ltd (BHP.AU) and Rio Tinto Ltd (RIO) fell 1.9%, 0.1% and 0.5% respectively.
In other parts of Asia too, stocks came under pressure following Yellen’s Fed comments which affirmed that there could be higher US rates this year, which could result in funds flowing into US dollar assets. The Shanghai Composite Index dipped 0.3% while the Hang Seng Index of Hong Kong also lost 0.4%.
Succeeding in online stock trading depends a lot on the sophistication and user-friendliness of trading platforms. The right trading software and platform can give you a ringside view of the market and help you make more informed decisions. They can facilitate faster trading as well. TradeZero offers this and other benefits too such as commission-free trading, direct market access and 6:1 intraday leverage for faster trading.
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