There were several key economic releases earlier in the session, including August Case-Shiller home prices, the October Conference Board’s consumer confidence survey and the October Richmond Fed manufacturing index. The Conference Board’s consumer confidence survey for October sharply missed consensus estimates for an improvement to 54.3, instead tumbling to 47.7 from 53.1 in September. The disappointing confidence indicator sent the dollar sharply higher as traders dumped riskier assets for the safe-haven play.
The calendar for Wednesday consists of September durable goods orders and new home sales.
Forex News
Pound Pares Losses After Exaggerated Rally
Great Britain poundThe pound reverted its losing trend from last week’s end, specially versus the euro, as traders interpreted the winning streak as inadequate, as U.K. could be starting its first signs of economic recovery.
The pound has been facing extreme volatility as investors remain confused regarding the directions it may take in currency markets, considering the actual conjecture of the British financial scenario. Today, the pound rose specially versus the euro, as even if the U.K. posted negative growth numbers last week, analysts suggest that next quarter will bring back optimism towards the United Kingdom’s economy.
EUR/GBP traded at 0.9109 as of 21:45 GMT from a previous rate of 0.9235 yesterday.
The Brazilian real, ranking among the best performers in currency markets this year with the Australian and New Zealand dollar, experienced another day of losses as the government may take further action to halt the current national currency rally.
----------
The Brazilian real suffered another day of pessimism as speculations suggest that the national central bank could be ready to take further measures, after setting a tax for international capital inflows towards Brazilian equities markets last week, declining attractiveness for the real as fears that a good currency performance may be once synthetically halted by policy makers.
USD/BRL traded at 1.7205 as of 21:25 GMT from an opening rate of 1.7178 today.
If you want to comment on the Brazilian real’s recent action or have any questions regarding this currency, please, feel free to reply below.
The Canadian currency, which even flirted with parity towards its U.S. counterpart, declined once again today reaching the lowest levels since the beginning of the month, as stocks and commodities impacted the loonie’s attractiveness in a negative way.
The loonie is being a victim of its national central bank policies since it stated that a strong currency could stop plans of an economic recovery in the country, influencing traders’ perception towards the Canadian currency as the Bank of Canada may intervene in its currency performance, automatically creating a negative sentiment, which gained force today as such declarations were repeated. A part from BOC comments regarding a strong loonie, financial markets did not provide support for Canada’s currency to grow, considering the nation’s exporter profile that lost attractiveness as stocks and commodities, specially the crude oil, underperformed today.
According to analysts, two factors, which are not related, pushed the Canadian dollar away from parity with its U.S. counterpart, as the greenback gained since its rates could be undervalued, and the sentiment towards the loonie is becoming progressively pessimist, as investors are option for other high-yielding options in countries where a strong currency is being tolerated, like Australia, leaving the loonie in a second plan for most of traders.
USD/CAD traded at 1.0685 as of 21:04 GMT from a previous rate of 1.0518 yesterday. CAD/JPY traded at 86.20 falling from 87.55 yesterday.
If you want to comment on the Canadian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.
Bookmark to:
-------------
The dollar had the best performance in more than a month this Monday as speculations suggested that the current rate, mainly versus the euro, would be to low to sustain, making the greenback to erase much of the losses it posted last week versus the European common currency.
The U.S. dollar gained versus several major currencies which touched record highs due to increased risk appetite that has been affecting the dollar’s attractiveness in foreign-exchange markets during the past few months, as the world economy finally showed signs of improvements. Currencies like the Australian dollar and its New Zealand counterpart, posted the biggest losses versus the greenback as investors understood that current levels for these currencies would not reflect their trends versus the U.S. dollar, as the North American currency is also improving systematically, even if to a lesser extent than currencies from commodity exporting nations. The South Korean won, even if being an emergent market currency, extended gains as its economy grew sharply in the last quarter, according to a report.
According to analysts, the situation for the greenback is rather different than when it touched $1.60 versus the euro last year, and traders are questioning themselves about fundamental factors behind the current rates for the greenback, helping the North American currency to regain space in currency markets, as the euro could be overpriced.
EUR/USD traded at 1.4871 as of 20:38 GMT from a previous rate of 1.5013 yesterday. AUD/USD traded at 0.9155 from 0.9256.
If you want to comment on the U.S. dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.
Forex:
Form 10-K: A Breakdown
Form 10-K has many different sections, called items, which are broken up into parts. Part I focuses on a description of the company and business. This section provides typically static information that is useful for any investor who requires a general understanding of the industry and company. It has various sections including business, risk factors and legal proceedings. Investors should review this section, even if they are familiar with the company or business, paying special attention to any changes in the language, particularly those related to risk factors and legal proceedings. The company also will typically provide an update to the competitiveness of the industry, including business trends and any other pertinent information that may affect market share and the company's ability to reach its goals. For example, new laws or regulations passed by the federal government that may impact the company's ability to operate the business would be included.
Part II focuses on the company's financial results of the operations. This includes the very important management discussion and analysis (MD&A). The MD&A informs the investor of management's explanation of financial results and the factors that impacted the past year. A summary of financial performance, discussion of acquisitions or divestitures and a comparative analysis of the current reporting year to the previous year and the previous year to two years earlier are listed here.
Part III focuses on corporate governance issues like executive compensation. Part IV contains exhibits, including the actual financial statements.
Where to Begin
Form 10-K can be found along with other SEC required forms and investor information on company websites, generally under an "investor" heading. In addition, the SEC publishes these documents on the Edgar website.
The best place for investors who are unfamiliar with a company or industry to start is at the beginning of the document, Part I, Item 1: Business. An industry overview is provided to give the investor a picture of the competitive landscape, the opportunities and the threats from a risk standpoint. Company-specific qualitative information is also discussed, including legal proceedings specific to the company as well as to the industry. Generally, a competitive analysis is also provided; typically the names of all competitors are discussed. Investors can compare the wording of the current 10-K to the wording of the previous 10-K, zoning in on any variations in tone to see if slight changes have occurred that may affect the future operating environment.
Once general knowledge of the industry and company is obtained, more company-specific information can be ascertained in Part II, the MD&A section. Company fundamentals, prospects for new businesses or products and risks as well as a comparison to the previous two years' financial outcomes are provided. In addition, business segment information is disclosed and discussed in this section. Often companies with either multinational operations or multi-segment businesses separate the operational results from the consolidated results so investors can analyze the growth drivers for the company. Reviewing results on a consolidated basis is useful, but understanding what drives the performance for the company via segment analysis augments an investor's ability to determine whether the investment could be fruitful in the future.
What's in the Numbers?
Form 10-K includes the annual financial statements - the balance sheet, income statement (statement of earnings), statement of retained earnings and statement of cash flows - for the current reporting year and up to the previous five years. This is a good opportunity to compare annual financial performance on a year-over-year basis. Often investors use a percent of revenue method to analyze the numbers. In addition, investors like to look at certain financial ratios to determine whether financial performance is improving or declining. The comparison across multiple years makes this information very beneficial. (Want to learn more about financial statements? Take a look at our Financial Statements Tutorial.)
Other 10-K Features
Form 10-K also includes the requirements of the Securities Exchange Act of 1934 and Sarbanes-Oxley regulation - the acknowledgment of management that they certify the results contained in the report. The auditors also provide an opinion based on their audit. Many investors pass over these exhibits, but they are an important outcome from legislation after several instances of fraud resulted in shareholder loss.
On the first page, the number of shares outstanding is listed as of the published date of the report. Investors will notice that this share count differs from the numbers used to calculate the earnings per share on the statement of earnings. The number of shares outstanding used in the statement of earnings is the average shares outstanding during the period, not the ending value.
Amendments
Form 10-K/A is compiled and filed when the company makes an amendment to the Form 10-K after it has been published. It is not an uncommon occurrence to file form 10-K/A. Investors should review these amendments to ensure that they do not materially change the investment thesis.
Conclusion
Form 10-K provides a comprehensive review of the industry and company, which should help investors form an investment thesis. Although it is an extremely lengthy document, investors will gain a valuable perspective by reviewing the information contained therein. Not only should new investors who are trying to understand a business examine the document, but current investors already familiar with the business should also review it to analyze any changes to the information reflecting changes in the business and operating environment; these may affect a company's ability to operate and grow.
