Forex Trading Technical Analysis

To become a successful Forex trader you need to understand how to analyze the market. Market analysis in situation of Forex Trading is usually wrapped up in two diverse ways. These are Fundamental Analysis and Technical Analysis. So how very is vital analysis and what is technical analysis? Let us comprehend how these terms mean and how can one use these techniques to trade in a better manner. Forex Trading Technical Analysis

* Fundamental Analysis: Fundamental analysis deals with analyzing the economic, social and political position of a nation as a whole to determine the value of its currency and to determine whether the currency’s value will rise in the near future or whether it will fall down. The main principle behind this is that if the economy of a nation is doing very well then its currency would also do well. Forex Trading Technical Analysis

Certainly the value of a currency of a nation which is having a growth rate of 10 % per year would be better than the value of a currency of a nation whose progress is very slow. Similarly the currency of a developed nation will have higher stability than that of a developing nation. Fundamental Analysis basically means that a good economy leads to higher currency value and a bad economy leads to a lower currency value. Forex Trading Technical Analysis

* Technical Analysis: Technical analysis deals with Forex Trading at the root or basic level. Technical analysis is the study of the price movement of a currency pair.By this we mean that in Technical analysis we analyze the price of a currency pair with respect to time and find out the change in the value of a currency pair over a certain interval in order to ascertain which is the best currency pair to invest in and at what time should the investment be made. Forex Trading Technical Analysis

One of the most important thing that one must learn or try to interpret is trend. A trend is a situation when the value of a pair is either falling or rising constantly. A trend can earn you money in forex trading. If you are able to find a trend and follow then you would surely gain from it. So it is important to find out trends and follow them to earn a profit. Forex Trading Technical Analysis

From the above discussion we can conclude that Forex Trading has two aspects that need to be understood in order to gain an advantage over other investors as well as the market. Complete understanding of Fundamental and Technical analysis techniques can help you earn a continuing profit in the Forex Market. Stop what you are doing RIGHT NOW and get your Life Changing Forex Trading Technical Analysis Program. It’ll change your Life Forever!

Forex News Alerts

Financial magazines and websites are full of Forex shock and updates. You can also earn oodles of Forex tips on these sources or even out of people on the street. Everyone seems to be an expert. The truth is that a good number of of these kinds of borrowers are far from experts in forex trading. Forex News Alerts

In fact, specific of them are totally ignorant of the real nature of the market and how it works. That’s the main reason why it’s dangerous to follow Forex market news blindly. A lot of these news items and analysis articles are just the opinion of a single person and one who may have theoretical background but little to no real knowledge of the market. Forex News Alerts

The second danger in following Forex news is that it usually arrives too late for you to really take advantage of it. By the time something reaches a newspaper, it has already been read by thousands of professional traders in banks and financial institutions. They always get the news first. While you’re reading an article, so are thousands of other traders. This means that everyone is influenced in the same way. You don’t have an advantage, you’re part of a flock that’s being driven. Forex News Alerts

Of course, being aware of what’s going on is important, and knowing the news can lead to more profits, but be aware that Forex trading news items aren’t that effective. In fact, because you will usually not be among the first to read the news, you may even be too late in making a profit and catch the market while it’s going in the wrong way. Forex News Alerts

As for trading by Forex tips, always question the source of the information. Even if this person has an MBA, does he or she really know anything about Forex? I’ve seen too many traders fall victim to useless Forex trading tips. You need to develop a healthy sense of skepticism. Forex News Alerts

You also need to educate yourself on the market. In that way, you’ll be able to tell the useful news from the useless and the true tips from the false. Stop what you are doing RIGHT NOW and get your Life Changing Forex News Alerts Program. It’ll change your Life Forever!

Forex Brokers perform the task of the middle man when investing in  the forex market. If you’re going to trade currencies then you require a broker to put  your orders through. You don’t necessarily have to  open trades using a forex broker though.  Dealing directly with banks are an  choice only the richest traders have while floor trading is the other  way around brokers.Unfortunately, most of us aren’t Billionaires and lack  the ability and resilience necessary for the  rigors of floor trading.  These brokers get a separate currency rate from  their respective banks. Forex brokers then offer us higher spreads and this is how they  make money. The difference in the spreads are how they ultimately make money.  Here is a  review on two of the most popular forex brokers on the internet today.Very accepted, Oanda is one of the major players in the online currency trading scene. Even from the start, they offered trading accounts in different  base currencies. Oanda actually started as a company converting large sums of currencies for large corporations. Oanda is the creation of  Richard Olsen who founded the Olsen Group. He has authored two books on forex trading with one of them being the famous manifesto, the forex traders bill of rightsThey have collected a good number of awards over the years including the 2009 World finance forex award. They have lower than usual variable spreads compared to other brokers. They have a web based trading platform that users can use from any computer terminal worldwide. Forex Capital Management (FXCM) probably the most accepted forex broker on the  internet today. They offer some of the lowest spreads found anywhere to micro account holders and have been branching out internationally. They are a multi-lingual forex broker with all the  key languages covered and it takes as little as $25 to open a micro  account with them. The FXCM trading station II is their platform of choice but they are  looking at offering metatrader 4 in the future due to its popularity. Accounts can be had in Euro,  British pound, American Dollar, Japanese Yen and the Australia dollar.

Forex Day Trading Signals

Forex day trading is absolutely awesome if you can make out what you are doing. But if you have never traded the Forex before, especially if you experience never day traded the Forex before, at that time you are being offered to certainly be killed. So what do you do? Forex Day Trading Signals

You attain reliable, top notch Forex day trading signals, and you follow them to the letter. Of course Forex trading seems fun. People envision themselves sitting at their desk for a couple of hours, getting in and out of trades at lightning fast speed, and having the entire world currency markets by the tail. You see this in movies, you imagine this in your dreams, and you think you are the next one to make millions of dollars in the foreign exchange. Forex Day Trading Signals

Not only does Forex trading seem like a blast, but you know that it has excellent potential for making incredible sums of money. It wasn’t that long ago that I saw an interview on CNBC of a person that made several hundred thousand dollars a day every single day by trading the foreign currency markets. This guy was absolutely rolling in dough, and he made more in one day than I make in an entire year. So absolutely, if you want to begin trading the foreign exchange, then get started right now. Forex Day Trading Signals

But wait! What if you don’t know what you’re doing? If you don’t know how to trade the currency markets, day trading is going to absolutely wipe out your account in no time at all. Why? Because you are making so many trades, you have to make lightning fast decisions, and the market can move against you in no time flat before you even have time to react. Forex Day Trading Signals

Forex day trading + no experience + big dreams = completely broke. But you still want to make money trading the foreign currencies, and you want to make money right now. So what do you do? You need to find Forex trading signals that you can trust and that you can follow. Since you don’t know what you are doing it, you need to depend on professionals that have had years of experience in the markets. Forex trading requires that you trade often, and you were going to make small gains along the way. Forex Day Trading Signals

That is the whole point in making several trades a day. So you need someone to guide you along so that you know you can make money in the short-term while you learn the foreign exchange markets in the long term. Stop what you are doing RIGHT NOW and get your Life Changing Forex Day Trading Signals Program. It’ll change your Life Forever!

The basic way to increase your return on investment is to find an undervalued currency that is weak against the US dollar. When you hear investors discuss Forex trading, they’re talking about trading foreign currency. Automated software can replace you at night especially; while you can rest and robot, being fully automated, can manage you work.

Even if you have a day job, you’ll still be able to pull off some profitable trades during your off hours and manage your account from the comfort of your home. Many traders have automated currency robots, which can trade 24 hours. Traders can get their work done at all times of the day, through a large number of online currency sites.

If you are a beginner, here is another tip for you, prefer to work during the day, as it is bit easy and will provide you more chance to know and learn about the Forex Market. While experienced traders can work according to their ease either during the day or night. Likewise, for USD/CAD pair, best trading time is 8:00 am to 3:00 pm.

The concept that drives the market is simple: a trader converts any amount of one currency to another foreign currency for a profit. The forex market is a great alternative to the traditional domestic stock exchanges. Night traders focus on trading currencies from 5:00 pm to 12: 00 am.Most of the traders prefer to trade in EUR/USD currency pair. It’s essentially currency arbitrage. But for day traders there are different time for different currency pairs. Users can use trading time according to their skills and availability but if they keep in mind these details, it might help in earning good profit.

For driven traders that have a hunger to work around the clock and get profit from a volatile market, the currency markets are perfect for you. For Example if you wan to trade in USD/JPY currency pair, best profitable time is 12:00 am to 3:00 pm. Best suitable time to trade for this currency pair is 3:00 am to 3:00 pm. As the foreign currency’s strength improves, you trade your money back to US dollars, or another currency to yield more profit from your original investment.

Christian Noyer, the ECG governing council member said specifically that he did not believe that there was room for overly optimistic sentiment at this stage. He said that there have been signs, good signs that the economy is rebounding and doing so at a faster rate than anticipated, although these facts are puzzling to the board right now. 

I equate what he said to a man who’s legs were badly injured in a car crash – the doctors say he will walk again, although it will take a long time of hard work and physical therapy, to rehabilitate them.  Just because he begins to wiggle his toes sooner than doctors thought, or just because the feeling returned to his calves does not mean that he will be running a marathon anytime soon – or walking unassisted to the bathroom for that matter.

The economy was hit hard, and there was much damage, internal and external as a result.  There are many elements to this crisis and just because some areas are improving at a faster pace than was thought, does not mean the system as a whole is poised for such a rapid recovery. 

We all need to put these things into perspective.  Noyer was very clear in his caution, he said that the Central Bank and local governing bodies needed to holds steady on fiscal stimulus policies as right now, this is the one thing that is helping the growth.  

Many on the street, online Forex traders and online Forex bloggers included, are anxious to have the governments stop funneling money in to the economy at such a rapid pace and they point to the “recovery” at hand as proof that it is no longer needed.  What I got from Noyer’s statements was that if you eliminate the monetary intervention into the economy at this point, you lose the recovery.

I am not a fan of many of the stimulus packages that were introduced around the world.  I am a free market capitalist in my basics and I was anti-quantitative easing policies in the beginning – and to a large degree still am.  But I do admit that to an extent it has helped certain industries and is the reason why GDP in some countries are on the rise. 

There are still dangers out there and we need to understand this.  Patience here will prove to be virtuous.  And as for the media outlets that are mincing words and leaving out meanings that can only be derived from the tone of voice and circumstances under which things were said, they are simply looking for a good story to tell. 

I have and always will caution my readers to take what they read at face value and if they want to really know the deal – research and read and form your own opinion.  A well informed trader will always be successful. 

Trading the EUR. The Euro rose broadly on Wednesday in the Forex arena, after European Central Bank Governing Council member Christian Noyer said that the world economy is improving at a greater rate than initially predicted. Noyer prefaced his comments though by warning that Central Banks still need to be weary as not all of the signs are positive.  His cautious optimism came on the back of a revised growth estimate from France which is now predicting a .3% increase, up from an estimate of no (0.0%) growth.

At 11:00 PM GMT, the Euro was up .56% to the US Dollar to 1.4552, up .26% to the Japanese Yen to 134.01, up .25% to the British Pound to .8799, up .9% to the Canadian Dollar to 1.5731 and up .55% to the Australian Dollar to 1.6893.  The Euro was down slightly, .07% to 1.5154, against the Swiss Franc.

At the last BoE meeting, sterling got some measure of relief as the bank decided not to move forward with rumored measures to cut the deposit rate for banks who held their reserves at the central bank.

Today, however, the Bank confirmed that it is considering making such a move and GBP took an enormous hit versus the broader market, swooning all the way back below 1.6500 vs. the USD and sending EUR/GBP to a new since June. 

The purpose of such a move is to jump start lending by the banks, who are hoarding capital as they try to repair their balance sheets and all manner of ugly assets they still contain. The very weak sterling yesterday came with very little to no news flow and one has to wonder if someone was in the know beforehand – very suspicious.

In any case, the pound has been very consistent inthe Forex market in reacting to every move from the BoE during this part of the cycle.

Let’s see if EUR/GBP pays any to the 200-day moving average up around 0.8885, just above today’s high thus far.. This sell-off in GBP/USD has been rather damaging to the up-trend – see more in today’s chart. Meanwhile, the RICS House Price Balance number was far better than expected and suggested that more estate agents are seeing rising rather than falling prices in the housing market.

The RBA statements at its last meeting at the beginning of this month were far less hawkish than expected, suggesting that an October hike the market was trying to price in was somewhat premature. The minutes released overnight confirm that the RBA’s trigger finger is less than itchy at the moment, as it sought to avoid “premature tightening”.

It is a bit surprising to see AUD not biting a bit more to the downside on this story and recent, less than inspiring data from the Australian economy. It looks like Aussie traders are following the moves in risk appetite in equities (scratched to new highs yesterday) and gold, which has recently topped the 1000-dollar an ounce mark.

The Fed’s Yellen was out with a rather dour speech about the economy and warned that deflation risk was greater than inflation risk. She recommended that the administration do more to support job growth. Meanwhile, Obama is going a bit out on a limb by declaring that the job losses are “bottoming out” .  Meanwhile, the treasury is considering unloading its share of Citibank for a significant profit (if it can get current market prices). Now if that isn’t a signal that the rally in equities has moved too far, we’d like to know what is?

The German ZEW was uninspiring, with the current conditions part of the index still rather gruesome, even if the expectations part of the survey notched a marginal new high for the cycle. This survey is symptomatic of the kind of hope that is out there for a strong recovery and suggest show much optimism is already priced in here. The expectations component has topped out around 70 three times in the last ten years, so we are already most of the way to the “top” after bottoming out at a remarkable -60 in October of 2008. It’s great if reality turns out to be so rosy, but scary to contemplate the disappointment if the future proves more humdrum.

The US data was far stronger than expected in the headlines and saw the paradoxical re3action of the USD heading weaker after the data (USD moving in inverse correlation with risk appetite, bla bla….), though not convincingly. This is getting a bit silly – if the US is really in recovery mode, then this should eventually be a positive for the dollar.

Looking at the internals of the retail sales data, it looks like much of the strength outside of Autos and Gas was due to back to school shopping (strength in clothing, general merchandise, book and sporting goods stores). The US PPI rose more than expected and bonds are selling off heavily, boosting USD/JPY to new highs on the day. The JPY will be very sensitive to any further sell-off in fixed income. 91.75/92.00 looks like a key area of resistance for that pair.

More Forex Trading Analysis: Moody’s came back yesterday to haunt the British Treasury.  Nearly six months after the rating agency lowered the rating on the sovereign nations debt, they came back yesterday with a warning that the country will be in negative territory for the next year to year and a half.  With all the whispering about the true state of the UK economy, publicly seen as stabilizing while privately seen as fledgling, the independent auditors at Moody’s has seemingly undermined political efforts to paint a brighter picture.

The result of this effort was a drop across the board in the Sterling, which has not performed as bad as it could have been after the parliamentary corruption scandal of the early summer.  In fact, British lawmakers have been scarcely seen on television or the newspapers for that matter, keeping a low profile to avoid any further scrutiny that could bring back the calls for a House of Commons overhaul.  To this end, even the Exchequer, Alistair Darling and Prime Minister Gordon Brown have been less than visible since the scandal – only talking when necessary and not really saying much when they do.

It should not come as a surprise that Moody’s found the British economy in bad shape and is forecasting a bleak immediate future.  With record unemployment, manufacturing and exports down to 50 year lows, cost of basic goods rising considerably and increasing poverty at the middle class level, it is a given that they are in trouble.  However, the opinion I hold on the fate of the Sterling in relationship to the current economic climate is bold, by any accounts, and contradictory to the Moody’s report.  Here is why:

I believe that the Sterling is one of the most fairly valued currencies in the Forex Trading Market out there at this moment because of Gold.  The UK spent hundreds of years pillaging and plundering the nations of the world for every natural resource it could find, especially Gold.  So the past 60 years has seen the Brits give back the land they occupied, the deals did not include the treasures.  The UK has by far one of the largest collections of Gold reserves, next to the Vatican of course, and the price of this precious metal has been on the rise topping $1000 per ounce last week.

Even if the economy spends another two years in depression, the value of the Sterling can be stable based on their reserves.  I am not a fan of the British economic policies and I do believe that the ease in which they have gone about spending citizen funds on bailouts has contributed to their situation, but I must respect the almighty Sterling – it has for a long time, and will for a long time to come, be worth every penny (or should I say quid?).

The Three Keys To FOREX Trading Success Trading Robots To The Rescue

Hello

I’m sure like many people you are curious about the Foreign Currency Exchange Market, or FOREX as it is commonly called. $3.8 trillion a day is traded on the Forex market . That,s enough money  to  buy Microsoft , Google, Wal-Mart ,IBM, FORD, and still have change for a Caribbean country and your own space programme .

There are those who have mastered the trillion dollar beast and are making a nice living , some have even become millionaires and billionaires . Of course you want to join those people at the top , with a life style most of us only dream of.

Is There a Legitimate Way To Make Life Changing Money With FOREX ?

Yes There is , but You need these three Principles/methods in place at the core of your trading plan.

1) Ability to trade with realistic risk assessment

2) Be able To keep greed under control

3) Use the Best Tools for the job ( Forex trading Software )

Ok let take a brief look at these principles/method

1) Values can go up as well as down , the Spread ( difference between the buy and sell price) is constantly changing . The amount of PIPS ( measurement of the smallest unit price ) in the spread tells you how much your investment has increased or decreased. So there are times when you need to trade short and other time you need to trade long . don’t expect the market to always go your way , do research on trends on the currency pairs your about to trade.

2) The FOREX market is not a get rich quick system ,  keep in mind there will be loses as well as gains , so controlled researched and planed trading will give you more chance of success. Leverage ( using credit to trade more than you have deposited) Is a powerful way to make money

3) Well after reading the Key principles 1 and 2 you may feel a little overwhelmed . However FOREX trading software robots , can make it so much easier for the new trader. You just need to find the FOREX trading robot with the best track record of success .

What’s really exciting right now is that I have found the top three robots on the web site below. Discover the best tools for the job visit the site below now .

Click Here Best Forex Trading Robots Reviewed

www.softe4u.com/fap_turbo_review/

If you are a frequent traveller with a constant need to transfer money then internet is the easiest and fastest medium to find a reliable Foreign Exchange service. Foreign exchange now plays a vital role in trading between countries and is essential for their economic growth. Earlier banks and other financial institutions were the most reliable source offering Currency Exchange services. But with the emergence of the Internet, a highly competitive market has surfaced where only the fittest can survive. The biggest advantage of online foreign exchange over traditional institutions is that it not only saves time but also money as most companies have a very aggressive approach to acquire customers and being visible within their target market segment.

Foreign Exchange market – The real finance marketWorld First is a leading UK based Foreign Exchange Broker. They have a thorough understanding of the needs and requirements of online customers and takes every possible step to provide them with the quickest currency exchange services. Its online Currency exchange converter is a very reliable and easy to use tool which provides precise currency exchange rates. The company always endeavours to provide its customers with the most accurate currency exchange rates available. Their service is truly marvellous and very efficient.

Foreign Exchange – Your need of TodayRecently World First has won an award for offering its customers exceptional exchange rates, service and innovative products. This has had a huge impact on its growth which has seen its overseas earnings increase six-fold over the last three years. World First is a now a premium currency exchange broker, serving both private and corporate clients. Set up in 2004 by directors Jonathan Quin and Nick Robinson, the company is experiencing exponential rates of growth year on year. Not only does World First help its customers to minimise their exchange rate risk and manage their currency exposure; it also offers a reduced rate of Money Transfer when compared with other online brokers.

The complete evolution of Money

Declining dollar gives overseas investors opportunity to buy US stocks at bargain rates, write Michael Tsang and Adria Cimino.Investors outside the US are purchasing companies in the Standard & Poor’s 500 Index at the cheapest valuations on record, their buying power boosted by a seven-month decline in the dollar. The S&P 500 is priced at 19.9 times earnings, the biggest discount to the MSCI World Index of 23 developed countries since May 2003, according to monthly data compiled by Bloomberg. For Europe-based money managers, currency translations push the average cost for a dollar of US profits down to €13.60, the lowest level ever relative to global equities and a discount that investors in America have never enjoyed. Overseas investors that hold almost $2.5trn in US equities are getting a bigger slice of corporate America with each euro, yen and pound they spend just as S&P 500 companies from PepsiCo to General Electric post higher overseas sales. While more losses in the dollar would cut returns, the last time US stocks were this inexpensive, in 2003, the S&P 500 began a four-year, 62% advance. “What you’re getting is the opportunity to buy global companies that have become cheaper because of the dollar and more competitive,” said Antony Gifford, a London-based analyst. “If you can buy global secular growth at a discount because it’s dollar-listed, then why wouldn’t you?” The S&P 500 climbed 4.5% to 1,071.49 last week, the biggest gain since July. US service industries grew in September after 11 months of contraction while Alcoa, the largest US aluminum producer, reported an unexpected third-quarter profit as the New York-based company cut jobs and raw-material costs faster than analysts projected. The S&P 500 added 0.4% to 1,076.19 last week in New York, its highest close since October 2008. The MSCI World gained 0.5%, while Europe’s Dow Jones Stocks 600 Index rose 0.7% as Philips Electronics reported an unexpected third-quarter profit. The dollar fell 11% against the euro and yen and 7.4% versus the pound in the past six months. The currency was driven down as the US government and Federal Reserve lent, spent or guaranteed $11.6trn and the central bank kept interest rates at near zero to combat the worst recession since the 1930s. The US Dollar Index traded as low as 75.767 last weeks, 6.7% above its record low of 70.698 in March 2008. Profits for US companies have dropped less than those in the MSCI World Index, helping increase the valuation gap with the S&P 500. Santa Clara, Intel, Goldman Sachs, GE and 28 other S&P 500 companies are scheduled to report results this week. The MSCI World has surged 66% since 9 March as its companies reported an average 40% decline in second-quarter earnings. The S&P 500 rose seven percentage points less even as its companies posted a profit decline that was 11 points smaller. The MSCI World was valued at 27.7 times the earnings of its 1,659 companies in September, exceeding the S&P 500’s ratio by 7.75 points. That’s the cheapest level for the benchmark gauge for US stocks since May 2003, when the index was beginning to recover from a two-and-a-half-year bear market that cut its value by 49%. Foreign investors owned $2.47trn in US common equity as of 30 June 2008, according to data from the US Treasury Department. That’s equal to about 16% of the total value of the American stock market. Net foreign purchases of US shares rose to $28.6bn in July from $19.1bn the previous month. Overall, international demand for long-term US financial assets weakened in July as investors cut purchases of bonds. Officials in emerging economies such as China and Russia have questioned the dollar’s dominance in the global economy as the federal budget deficit reached $1.4trn in the year ended 30 September. For overseas investors buying stock with currencies that appreciated versus the dollar, shares of S&P 500 companies may be an even bigger bargain relative to global equities. Adjusted for euros, earnings for S&P 500 companies are about 50% cheaper than those in the MSCI World. That makes US stocks less expensive now for money managers in Paris and Frankfurt than they were for American investors near the end of the bear market in 2002, when S&P 500 companies sold for a record 42% less than the average global ratio. Investors in the UK can buy a dollar of profit generated by S&P 500 companies for an average of £12.80, a 54% discount to the MSCI World, while annual per-share earnings of US companies cost 1,820 yen, 34% less than the MSCI World. Using the weighted exchange rates of the six currencies in the Dollar Index – the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc – the S&P 500 is currently valued at 14.7 times earnings. The S&P 500 last month traded at the biggest discount to the MSCI World on record, when adjusted for the six currencies. Converting US corporate profits into foreign currencies at today’s rates would eliminate the discount in the S&P 500 created solely by exchange. Priced in dollars, the US index is 27% cheaper than the MSCI World, close to the biggest gap in six years. Adjusting the price of the S&P 500 for currencies in the Dollar Index is a way of gauging the relative cost of US earnings to overseas investors and predicting which country’s stocks may rise or fall more, said Jack Ablin, chief investment officer of Harris Private Bank in Chicago. “The US stock market is on sale,” said Ablin. “On a level playing field, the dollar is cheap to our trading partners’ currencies, so they’re able to get a reasonably priced S&P 500. It’s an argument that makes sense.” While the drop in the dollar may entice more international money managers and provide a boost to US profits, more weakening would erode the value of American stocks owned by overseas investors, offsetting gains in share prices. The S&P 500’s 58% rebound from a 12-year low on 9 March shrinks by 22 percentage points when measured in euros and 15 percentage points in yen. Central banks are increasingly snubbing dollars in favour of euros and yen. Countries reporting currency breakdowns put 63% of the new cash into euros and yen in April, May and June. That’s the highest percentage in any quarter with more than an $80bn increase. US equities less expensive the decline in the dollar makes it less expensive to buy US equities – that’s a fact,” said analyst Walter Harecker. “But keep in mind that with the depreciation of the dollar, you’ll have a loss on that. Then it’s not a good effect.” The profit growth forecast for S&P 500 companies by analysts for 2010 is 11 times faster than the expansion in US gross domestic product projected by economists surveyed this month. The average ratio is 6.1. “We’re getting more and more cautious with the rally we’ve seen,” Harecker said. “Valuations aren’t cheap anymore, considering the health of the economy.” A weaker local currency is also helping to boost profits at US companies, which are generating more of their revenue internationally. Last year, S&P 500 companies had 47.9% of their sales abroad, the highest level since at least 2003. The decline in the dollar makes American companies more competitive outside of the US because their exports become cheaper to sell, while the value of foreign-currency denominated sales increases in dollar terms. PepsiCo, the world’s largest snack maker, reported a third-quarter profit last week that beat analysts’ estimates, helped by an increase in international sales. Currency translation accounted for six percentage points of the 8% reported gain in PepsiCo’s operating profit. A weaker dollar may also help bolster earnings at GE, which generated 53% of its revenue from abroad last year. The Connecticut-based company that makes everything from mammography equipment to jet engines and refrigerators was due to post results on Friday. “It’s best to invest more in US stocks,” said Louis de Fels, a Paris-based analyst. “They are benefiting from a weak dollar and that’s not about to change. The more the dollar declines, the more exports will be strong.”