Forex Forum to Share, Discuss, Communicate and Trade Forex

CDS ( Credit Default Swap )

Our vision is to make this forum, and Forex Abode, the ultimate resource to add value to Forex traders. Please do let us know your suggestions and comments to make this community a better forum with each passing day.
Image

CDS ( Credit Default Swap )

Postby david fx » Tue Sep 18, 2012 12:35 pm

The value of a Credit Default Swap (CDS), now has become one of the fundamental indicators of the most sought after by major investors and fund managers worldwide. A value of credit default swaps could be a reference to a country as the most accurate forex indicator in predicting the movement of the currency of the country, both in the medium-and long-term. Why is that? please refer to his review below. Understanding Credit Default Swap Credit default swap is a purchase agreement in which a seller will provide coverage to the buyer, that the issuance of certain loans that will be paid.

Credit default swaps are generally made by banks, financial institutions and other financial firms and investors who have large funds, the central bank of a country even though. CDS In Forex In a large-scale sample contained at this is a country where the CDS can be used to predict the direction of movement of the currency of the country in the future. European crisis is happening and issues in the spotlight, which is happening in Greece, Portugal, Spain and Italy which makes the value of the CDS to the attention of investors and market analysts. The higher the value of the CDS of the country, the higher the risk that the country experienced. That is, the crisis in the country will affect the value of the CDS, the risk of the country to go bankrupt in the eyes of investors is also higher. This of course will lead to a decline in investor confidence have an impact on the weakness of the currency of the country.

By observing the value of a country’s CDS, then I can conclude that credit default swaps as the most accurate forex indicator. Where the two graphs Credit Default Swaps that are above gives us that a “big picture” of fundamental analysis to see the market clearly. Preview markets without contamination by the daily news and the media that seem obscure market conditions is going on.

Source:
http://fxadd.com/cds-credit-default-swap/
david fx
 
Posts: 16
Joined: Wed Jul 25, 2012 2:51 am

Return to Comments and Suggestions

 

Who is online on Forum

Registered users: Baidu [Spider], Bing [Bot], Google [Bot], Joy Bahadur, l3imadi, Yahoo [Bot]