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Thursday, the Australian Bureau of Statistics announced that Australia's trade deficit widened less than expected in September, with both imports and exports on the rise. Nevertheless, September marked the fifth successive month in which Australia has posted a trade deficit.

The trade deficit rose to a seasonally adjusted A$1.85 billion in September from a revised A$1.65 billion deficit in the previous month, although it was smaller than the A$2.15 billion deficit expected by economists. September's deficit was the largest deficit recorded since March 2008.

Exports of goods and services rose 5% on month to A$20.21 billion in September. Of this, exports of non-monetary gold soared 64%, while exports of rural goods fell 3%. Exports of non-rural goods rose 2% and services credits climbed 3%.

In terms of components, exports of coal, coke & briquettes rose 9% in September. Other components that recorded increases include exports of other non-rural goods, which grew 10%, travel services credit, up 5%, and other services credit, up 1%. These rises were partly offset by exports of other mineral fuels, which dropped 6%, and exports of cereal grains & cereal preparations, down 10%.

At the same time, imports of goods and services grew 5% on month to A$22.06 billion in September. Of this, imports of intermediate & other merchandise goods rose 10%, while imports of non-monetary gold surged 33%. Imports of consumption goods and capital goods were both up 2%, while services debits increased 1%.

In September, imports of fuels & lubricants recorded the most significant increase, up 25%. Other notable increases include imports of parts for transport equipment, up 25%, while imports of non-industrial transport equipment n.e.s. rose 15%. Imports of other merchandise goods and consumption goods n.e.s. grew 84% and 3%, respectively.

The Japanese and Korean equity markets have picked up again on the negative sentiment from yesterday and are both over 1% lower in early trade.

New York Fed’s Empire State index falls to -9.41 from -4.55 IMF considers making its bonds tradeable IMF: US returns to growth in 2010 IMF”s Lipsky: Dollar to remain reserve currency “as far as we can see” Geithner: Economy in early stages of recovery ECB’s Wellink: Should act firmly and quickly to remove monetary accommodation when recovery is established ECB financial stability report: Banks could lose $283 bln more ECB’s Tumpel-Gugerell: Must preemptively prick asset bubbles Canadian budget vote Friday a matter of confidence Canadian PM Harper: US deficit long-term, structural and dangerous Fed’s Fisher: No rate hike soon; inflation not an issue as there is too much slack in the economy UBS placed on review for downgrade by Moody’s NAHB index falls to 15 in June from 16 in May US yields fall after Russia, IMF comments, stock slide; 10-year falls to 3.73% CRB index falls 2.25%, Oil down $1.50 to $70.50 US equities fall 2.4%

EUR/USD fell below the neckline of a closely watched head-and-shoulders pattern this morning, extending losses begun overnight. The catalyst for the final break was news that EU banks face a further $283 bln in losses over the next year, according to an ECB report. This added to pressure from comments from the IMF that the dollar should enjoy its reserve status for years to come and from a sharp unwinding of the reflation trade. Unwinding of the reflation trade was a broad catalyst for dollar strength today. Commodity currencies were particularly pressured today. USD/CAD rose to 1.1375 intraday as the opposition Liberal Party announced they would not support the Tory budget unless they extract promises on jobless benefits. Friday’s vote is a matter of confidence, so yet another Canadian election could be in the cards; the fourth in five years. UD fell close to 0.7900 before stabilizing.

The USD has seen some across the board weakness during Asian trade, EUR/USD presently up at 1.4050 compared to a North American close Wednesday around 1.3985, while cable is up at 1.6420 from around 1.6350. The USD is being underminned by worries major emerging countries (BRICs) may be about to aggressively diversify out of the USD and US assets. No lesser judges than our own Jamie Coleman and Goldmans feel these worries are overblown. Elsewhere risk appetite remains healthy, helping support likes of sterling, euro, aussie and canadian dollar. The Nikkei poked it’s head over 10,000 overnight, the first time since last October. Sentiment will have been bolstered by the release of Australian May employment data which showed a much lower decline in the number of jobless than expected, a mere -1,700 s.a compared to a median forecast of -30,000. The unemployment rate came in at 5.7%, as expected. Japan’s Q-1 GDP was revised up, to -3.8% q/q and -14.2% annualised from initial -4.0% , -15% respectively, which would also have helped a little. Elsewhere, China’s Jan-May urban fixed asset investment was up 32.9% from a year earlier, better than the median forecast of 31%. There are also expectations that tomorrow’s release of Chinese industrial output is going to see a nice pop.

A fairly quiet Asian trading session, with the USD retaining it’s weaker feel. EUR/USD is up at 1.4090 compared to a North American close Tuesday around 1.4060. The USD is being underminned by a growing realisation that the US will not infact be hiking rates anytime soon and by decent risk appetite. Asian stockmarkets made nice gains overnight. Sentiment will have been underpinned by fact Australian June consumer confidence jumped most in 22 years. Interesting piece by Sam overnight, highlighting story in Hong Kong newspaper Ming Pao Daily. The paper reports that Chinese May industrial output will show 8.9% y/y growth, appreciably better than median forecast of 7.6% (data due Friday.) If true, you’d certainly think that would give risk appetite a further boost.

By Sean Hyman Imagine a single Forex trade that could finance your next car. Not your next car payment – I'm talking about paying for your car outright with ...

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Cable has advanced to 1.6040 at writing. Some more good news on the UK housing front. House prices in England and Wales fell at their slowest annual pace in 1 1/2 years in the 3 months to May and completed sales hit a 9-month high. The Royal Institute of Chartered Surveyors, (RICS) monthly house price balance rose to -44.1 last month, its best reading since November 2007, from -58.7 in April, much better than the median forecast of -51.0. Technical resistances now 1.6075 and 1.6095/00.

The JPY and USD have firmed in overnight Asian trade, with risk aversion slightly heightened, and with Asian stocks posting losses. EUR/USD is down at 1.3865 from a North American close Monday around 1.3900, while EUR/JPY is down at 136.10 from around 136.95. Asian market seems to have picked up on comments made by the IMF yesterday, that lack of a co-0rdinated and aggressive clean up plan for euro zone banks could hamper economic recovery in the 16 countries that share the euro. The Congressional Oversight panel meanwhile says that bank stress tests should be repeated if the US unemployment rate rises beyond levels assumed by regulators in the recent round of examination. The panel also says that the stress tests should also be repeated periodically as long as banks continue to hold “appreciable amounts” of toxic assets. I just noticed some rather disconcerting comments made recently by Robert J Shiller (he of home-price indexes fame.) The Finance professor at Yale says US house prices are in the midst of a decline that may last for years. Ughh. S&P have released a report entitled “Asia-Pacific Sovereign Report Card; Amid Encouraging Signs, A Bumpy Road Lies Ahead.” The report says the worst of the economic dislocation in Asia Pacific appears to be over, if recent indicators are to be beleived, but fiscal deterioration resulting from stimulus and banking sector support measures will continue to put pressure on a number of sovereign ratings in the medium-term.

EUR/USD is a little easier in early European trade, presently at 1.3965. The improved USD sentiment we saw Friday seems to be lingering. The unexpected improvement in U.S. non-farm payrolls Friday is leading some to believe it won’t be too long before we see official US rates headed higher. At the same time, there is a feeling in certain quarters that the yield back up could prompt the Fed to quit buying treasuries if it is seen to be rooted in economic optimism. The worrying situation in the Baltics will also be weighing on EUR/USD. Technical support is at present 1.3965 and below there at 1.3925/30, resistance up at 1.4000/10.

All of the majors are at their NY closing levels from Friday. The market will try to digest the volatile moves from Friday night before settling on its next move. I expect Asia to trade most of the majors in 100 pip ranges. It’s a relatively quiet day on the economic data front.

By Nick Olivari NEW YORK, June 4 (Reuters) - The euro swung between gains and losses but was trading up slightly against the dollar in choppy trade on ...

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Greetings fellow traders. A few days back I made a post (over here) announcing with joy that the LMT forex formula system has finally signaled an entry. The entry was a buy EUR/USD at 1.3873 on the H4 chart. Well, I’m glad to report that my position has hit take profit for a total of 251 pips. That marks my first successful LMT forex formula trade. So far so good! I did miss a potential trade on the H4 GBP/USD chart, and I regret doing so as if I had taken that trade I would have easily gained another few hundred pips. Ohwell, there is always next time. Btw, if you want something to chew on in regards to LMT Forex’s performance check this out: http://www.lmtforexforum.com/showthread.php?p=17#post17 That’s on a LIVE account! Congrats to Mike and hope the money keeps on rolling in. I’ll keep you all up-to-date on my LMT Forex Formula trades both via this blog and on the LMT Forex Forum via this thread: http://www.lmtforexforum.com/showthread.php?t=4 Until next time, I wish you all profitable trading! Cheers, Alan

Hello forex guys and gals. I hope you’ve had a profitable week. As you may or may not know, I got me a copy of Dean Saunders’s popular LMT Forex Formula manual trading system and I’ve been testing it for a few days now. I patiently awaited a trading signal and at last it has come - horay! The trading signal occurred on the H4 time-frame. Although I do have LMT attached to the daily chart as well I haven’t received a trading signal on it yet - no doubt because the eur/usd is currently in a uptrend and there is no major change in the trend, thus no LMT signal. I also have tons of other currency pairs that I’m trading using the daily chart, but I’m getting a bit off-topic here. Here is the trading signal I got with LMT Forex: 2009.05.28 04:00:16 LMT 1.5 EURUSD,H4: Alert: LMT Signal on EURUSD 2009.05.28 04:00:16 LMT 1.5 EURUSD,H4: [L.M.T] : Alert On 2009.05.28 08:00 And here is a screenshot of the trade in action! (still ongoing by the way): Click on the image to see it in full detail

As you can see LMT recommended that I set my take profit at 247 pips. At this point though the trade is well past 247 pips so I’m going to let it ride. I’ll keep an eye on the position and once I’ve got a 100 pip lead above the take profit price level I intend to set the stop loss at break even. At this point though those 247 pips are in the bank. Another method you can use to lock in profits is to set the trailing stop to the value of the take profit. This way once price reaches the recommended take profit level it will lock your profit it and from that point on any pips you get icing on the cake. I’ll keep you guys up-to-date on how this system performs. Oh, I’m also going to open up a forum dedicated to the LMT forex system, so stay tuned to this blog for the update. Take care everyone! Alan out.