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On Friday, the desire to move out of riskier assets continued on into the US session, though there were pockets of support for certain currency pairs found at the lows in the Forex market.

After a weak retail sales print, the GBP traded on the soft side (+0.3% m/m vs. +1.1% expected) as the impact of the Cadbury takeover appears to wane and the USD started to gain favor.
The EUR, on the other hand, outperformed its peers for a change along with some hopeful talk of a Greece plan to be announced at the weekend (Torres from the European Central Bank commented that a Greek assessment plan would be ready by February 3rd, and in the meantime Greece reaffirmed its commitment to stay in the EU mechanism).

The CAD was also under a bit of pressure, again on a weak retail sales number (this time -0.3% m/m vs. -0.2% prior).
Additionally to the recurring concerns about Greece’s fiscal position, an immediate threat of a China tightening and the effect of US president Obama’s banking reforms, markets were concerned as well about the increasing debate on Bernanke’s re-appointment for a second term as Fed chairman.

Nonetheless, Wall St endured its third consecutive down day with cumulative losses of over 5% and registered their worst weekly performance since the market bottomed last March.

The Bank of Japan started its second day policy meeting today (the first of 2010) under increasing pressure to attack deflation. Governor Shirakawa is on record asking for easy monetary conditions, and there is a chance that the bank’s other options will come into play (i.e. expanding the credit program or increasing its monthly purchases of government bonds).

The slightly positive developments that took place on some of these fronts led to a small rebound in risk during the Asian session today. The GBP made it back to above 1.61 again, but it is still looking a bit shaky.

In an interview for Sunday Times done over the weekend, Chancellor Darling still remained cautious over the economy’s outlook, stating it still needs government support. He was also skeptical about the banking reforms proposed by president Obama (which could be considered non positive for the “City of London”).
With a quiet start to the week on the data front, it will be interesting to see if the slightly better mood from Asia extends into the week.

The data highlights for the rest of the week include UK Q4 GDP tomorrow; the FOMC meeting on Wednesday followed by US durable goods orders on Thursday; and Q4 US GDP on Friday.

During the overnight session, heightened fears of an imminent China hike ensured risk was definitely OFF, with a firming dollar feeding in to a weak Wall St, which translated into a softer tone for commodities. Nothing was standing in the way of EUR weakness, with Greek yields rising on waning appetite for Greek debt and touching a fresh 5-month low vs. the USD. From their part, the BOE minutes showed talk of a positive growth in Q4.

The immediate reaction at the forex markets was for USD to firm with the EUR taking the brunt of the action. Nevertheless, the volatility was over within a few minutes and Asia spent the rest of the session confined to ranges. Besides the China data, there was nothing much to influence trading. Early NZ data gave the Kiwi a boost as both business PMI and retail sales beat forecasts. However, the China data soon knocked it back to opening levels.

Commodity currencies were on the rack as well, as gold slumped over 2% and the AUD was pressured by China tightening anxiety. Looks like the eyes were firmly locked on the slew of Chinese data releases in the Asian morning, while and activity was relatively muted ahead of the release. At the end, most data was better than initially expected, though the feeling in Asia was that, while better they were not as extreme as had been feared.

As per the future, it looks like all the data positioning made yesterday, though the risk aversion theme looks set to continue near-term. In the later sessions, we have Canada wholesale sales, weekly US jobless claims and Philly Fed index and leading indicators on tap. The BOC’s monetary policy report and press conference completed the day.

When you gain a profit or incur a loss without even having held assets, you have unrealized profits or losses. Your assets have remained in your custody, gaining or losing without trading activity. If you own a currency that gains value even when you have not sold it, you have an unrealized profit. Unrealized profits or losses are the opposites of forex orders.  Forex orders refer to foreign exchange transactions that may result in either gains or losses. Unrealized or floating profits or losses are gains and losses without forex orders.

Types of forex orders
There are different types of forex orders to choose from so that you won’t have unrealized profits or losses. With forex orders, you may take a risk but at least you have actually contributed to your own account, whether negatively or positively. You can make use of the simplest forex orders—market orders—if you do not want to have to think too much about your transactions. Other forex orders are limit orders, where you buy when the currency peaks or dips at a certain price, and stop-loss orders, which prevent you from losing out too much even if you make major mistakes in guessing.

The advantage of forex orders over unrealized profits and losses
Though you can lose with forex orders as with unrealized profits and losses, at least you have done something. Without forex orders, it can be frustrating to lose out even before you have made a move. If you make use of any of the types of forex orders, you are at least learning some techniques. Forex orders provide you with learning in the foreign exchange trade. If you refuse to do anything, you may end up losing while still very much ignorant about what you have to do. Going through forex orders is obviously better than being content with unrealized profits and losses.