FXCM Research Team

IDX Insights, a financial research and development firm, released a cryptocurrency index that it has described as the first "Smart Beta" crypto index. For context, Fidelity defines "Smart Beta" as "an enhanced indexing strategy that seeks to exploit certain performance factors in an attempt to outperform a benchmark index." By leveraging this index, investors can harness factor-based strategies to potentially generate compelling risk-adjusted returns. The index seeks to take advantage…

What Is The Wall Of Worry? The "wall of worry" refers to a tendency in financial markets for stocks to rise in the face of seemingly difficult or insurmountable problems. It usually turns out, however, that these problems—though serious—are temporary and eventually resolved or able to be put off to the future. Generally, stocks are able to "climb the wall of worry" because many investors see potential problems as a…

What Is An Asset-Backed Security? Asset-backed securities (ABS) are fixed-income instruments similar to bonds that are collateralised by a pool of loans, the payments on which are channeled to the holders of the securities in the form of interest payments. When the loans are paid off, holders of the ABS receive their principal back. ABS issues are structured by a lender or investment firm using different types of loans. The…

As the world's largest financial market, the forex attracts millions of participants from around the globe on a daily basis. The result is a highly liquid, diverse trading venue that caters to the needs of retail and institutional investors alike. Whether you're a forex market newcomer or professional, the ultimate goal of active trade is the same: sustain consistent profitability. So, is it possible to actually make money trading currencies…

The relative values of international currencies play a key role in global finance. Three areas that are particularly sensitive to exchange rate fluctuations are intercountry trade, pricing stability and regional economic growth. In practice, governments and central banking authorities implement a collection of unique mechanisms to promote the stability of their domestic money. Central banks frequently employ devices such as interest rate adjustments, debt purchases and pegs to manage exchange…

Monetary Policy Versus Fiscal Policy Governments have two main ways to influence their economies: Monetary policy is the actions taken by a country's central bank to regulate interest rates, control the supply of money and the amount of funds banks must hold rather than lend to their customers. Fiscal policy is the spending and taxation policies of the government that can influence how much money businesses and consumers have to…

What Is A Reserve Currency? A reserve currency is a currency that is widely accepted around the world as a method of payment between countries for goods and services. Reserve currencies are also widely held by governments and central banks as foreign exchange reserves and to settle international debt obligations. Past And Current Reserve Currencies The U.S. dollar (USD) has been the primary reserve currency since the end of World…

What Is A Target Date Fund? A target date fund is a mutual fund designed for retirement that automatically rebalances the fund's assets as the investors in the fund draw closer to retirement age. In the years prior to retirement, the fund is more aggressive and heavily invested in growth stocks, but as the holders near retirement the fund becomes more conservative. At this point, its allocation shifts to include…

The U.S. stock market crash of 1929 was the beginning of the longest and deepest decline in stocks in history. It precipitated the failure of about half of the banks in the U.S. and was one of the principal causes of the Great Depression, which lasted about 10 years and engulfed most of the world. The market crash was preceded by a long period of economic prosperity in the U.S.…

Over the course of U.S. President Donald Trump's first term, reducing the U.S. foreign trade deficit became a priority of the Office of the U.S. Trade Representative (USTR). Headed by Robert E. Lighthizer, the USTR spearheaded a campaign of commercial pressures upon numerous international trade partners during 2018 and 2019. China and the European Union (EU) were among the largest targets. Subsequently, the prolonged escalation of tariffs regularly brought the…

Backed by the robust nature of the U.S. economy, the U.S. dollar is the global reserve currency. The U.S. dollar (USD), or "greenback," is the most widely accepted currency in the world, as it accounts for more than 60% of all known foreign exchange reserves held by central banks. The euro is the next-largest global currency and it accounts for 20% of these reserves, making it a distant second to…