The reader can have a question: why high growth rates of credits in general should be considered as a problem during the period when in economy of these countries the growth phase of a new business cycle steady or close to those is observed? But if the prices grow mainly because of an artificial agiotage in crediting sphere, they can sharply fall, when the society in these countries “will sober up”.

In other words, that economic growth was steady; something bigger is necessary than the escalating of credits stimulating elevating of the prices.

Besides, if to research spreads of profitableness of the state debt obligations with different terms of repayment it is possible to see that recently they have sharply increased, signaling that rates under long-dated bonds is considerable above, than on the short-term. This situation is rather favorable to creditors. However the history learns that artificial trends in dynamics of levels of profitableness can’t remain for a long time. Or the economy will be recovered, and rates on short-term obligations will go upwards, limiting bank coefficients of profitableness and stimulating growth of rates on mortgage loans; or rates on long-term obligations will decrease, signaling that economic revival has stopped, so, it is possible to wait for essential increase in number of non-returns of credits.

Monetary soap “bubbles”

Other overall picture of the dollar block is the overestimated benchmark interest rates. Many estimate econometric models give for AUD, NZD and GBP accordingly 19 %, 10 % and 12 % of resale in comparison with the average basis (estimate true values) for AUD/USD = 0.64, NZD/USD = 0.60, EUR/GBP = 0.77 and GBP/USD = 1.71 [1].

How these currencies in January, 2004 (behaved enough to tell that the pound rate has grown in this time more than on 2 %), has visually shown to the whole world a panic and an agiotage in these markets when many large investors took them in exchange for US dollar with thought and a regret: Why I haven’t purchased them two months ago?. Research of soap “bubbles” of the dollar block is very useful for conducting not only on spot market.

Transactions in the markets of currency swaps allow minimizing overhead costs which are born by the trader at the forward contract conclusion. Therefore currency swaps play the increasing role not only in arbitrage operations, cementing among themselves various sectors of the international exchange market on superficial investment horizons, but also in processes of hedging of open currency positions on deeper investment horizons.

Many transnational corporations also use swap transactions for hedging of the currency positions and recalculation of financial statements. As an example of such transaction the corporation which performs conversion currency transactions on spot market FOREX can serve and there and then makes offset transaction in the market of forwards (certainly, at the forward price).

For the company result of such operation is that it receives foreign exchange for the necessary term in exchange for other currency. Swaps allow moving means between corporations for short terms that gives the chance to borrow on fixed price circulating assets in the necessary currency and to invest temporarily disposable capitals for the short periods so, to get profit out of currency risk conditions. It also promotes “bubble” inflating as now it is favourable to borrow peripheral currencies of the dollar block on a fixed rate with hope of its increase the next months. In January, 2004 12-month’s swaps on GBP are traded at the rate of 1.85, AUD – at the rate of 0.78 and NZD – at the price of 0.67.

In case you decided to participate in forex trading must start from learning the basics of currency exchange market to make sure you do not have problems with this industry.

There is another option – you can hire experienced traders to do this job for you – read more about forex investment here. Also make sure to search for the knowledge in a good forex book.