Determinants of exchange rates in the Foreign Exchange (forex) market

Image source:

Image source:

There are different factors that directly and indirectly determine the exchange rates in the foreign exchange (forex) market. These determinants are often caused by the changes and trends in the global economy and among its participating financial entities such as banks, investment management firms, commercial companies, forex brokers, hedge funds, and many more.

Take a closer look at the factors influence today’s Forex exchange rates:

  1. Market Inflation

Inflation rates greatly affect currency exchange rates, and this factor is largely significant so that a country with lower inflation can enjoy a rising currency value while a nation experiencing higher inflation will expect depreciation in their currency.

  1. Recession

Naturally, a country suffering from an economic recession can expect a fall in their interest rates. This, in turn, paralyzes the country’s options to acquire foreign capital. The result is a weakened currency, thus, a lower exchange rate, in comparison to other countries with a healthier economy.

  1. Interest Rates

As mentioned in the previous section, the changes in the interest rates correspond to a proportional change in the country’s currency value. In addition, such status can also affect dollar exchange rate.  In other words, higher interest rates mean appreciation, and ultimately, a rise in exchange rates.

  1. Market Speculation

The expectation of a country’s stable political environment, as well as its optimistic economic performance in the near future, can often attract a high demand for their currency from investors. The demand will directly result in a higher currency value, thus, a rise in the exchange rate. On the other hand, countries under political and economic turmoil can easily scare away potential investors.
For more insights into the forex market, follow LOM Financial on Facebook.

The role of seaports and airports in globalization

Image source:

Image source:

The world is more connected now than it was before, thanks to the latest innovations and modern infrastructure that continue to link countries and continents to form a globalized and unified movement, especially in terms of economic activities and development. From an economic perspective, globalization is defined as an unstoppable force that fueled a level of progress towards growing and interconnected global routes of production, distribution, and consumption.

However, the process of globalization won’t be complete without the necessary infrastructure that make these interconnections possible: airports and seaports are two key players that have helped transform metropolises into global cities.

Airports have helped physically connect every country in the world, consolidating international markets and facilitating in world trade, and most importantly, helping emerging economies have access to the main markets. This also made them (EMs) viable options to be tapped by investment ventures, such as offshore mutual funds and hedge funds.

Thanks to a more connected and accessible market, companies from developed countries successfully founded international operations as well as foreign subsidiaries in developing regions, enhancing import penetration and promoting homogenization of domestic markets.

Seaports, on the other hand, have played their role in facilitating commercial and trade activities by providing a strategic access to land and navigable waters. Essentially, they have served as the main component of the overall transportation sector both for human passengers and goods.

One of the reasons why many countries rely on seaway transport is because of its low-cost but highly effective transportation system. Industries and companies need affordable and secure means of exporting their products, goods as well as raw materials.  This is not a coincidence that the biggest industries around the world are either strategically located in the coastal belts or have access to a nearby major port.

Maritime port areas also host a variety of activities from infrastructure services, cargo handling, mooring, towage, and more.

REPOST: Top 10 Most Expensive Penthouses in the World

A symbol (or more like a proof) of luxurious lifestyle, penthouses are among the most expensive residential units in the world. They are architectural marvels and offer expansive views of the city they are located in. Below is a list of the world’s most expensive penthouses, as per

The penthouse is usually the most exclusive and impressive apartment in any residential building. They are spacious, well-appointed, and offer great views, so it’s not surprising that these apartments often come with hefty price tags.

The following is a list of some of the most expensive and luxurious penthouses in the world:

10. Faena Residence Miami Beach – $50 Million
Faena Residence Miami Beach is a high-end 18-story oceanfront property set between the Atlantic and the iconic Collins Avenue. The duplex penthouse sitting atop of the building has been sold this spring for a record-shattering $50 million, the most paid for an apartment in Miami Beach.

This stunning penthouse features 8,273-square-feet of interior space, which includes 5 bedrooms, 5 full and 2 half bathrooms, in addition to about 10,000-square-feet on the outside. One of its highlights is undoubtedly the 70-foot-long rooftop swimming pool, which also offers some pretty spectacular ocean views.


9. Dome Penthouse at the Plaza New York – $80 Million
The fabulous Dome Penthouse at the Plaza in New York is one of the city’s most iconic residences. Built in 1907, it has rarely been available for sale, which only makes the spot more desirable.

Recently renovated (to the tune of $20 million!), this spacious duplex is currently owned by fashion mogul Tommy Hilfiger. In addition to the lavish decorations (which include beautiful chandeliers and plenty of works of art), the new residents will also enjoy some of the best views in New York, as the apartment overlooks Central Park and Fifth Avenue.


8. 15 Central Park West Penthouse, New York – $88Million
There are many excellent apartment buildings in Manhattan, but 15 Central Park West is a definite standout.

In late 2011, a 6,744-square-foot penthouse was bought there for a hefty $88 million. The apartment has 10 rooms including 4 bedrooms, a wraparound terrace of more than 2,000 square-feet, 4 bedrooms and 2 wood burning fireplaces and used to belong to former Citigroup chairman Sandy Weill. The asking price was met by Ekaterina Rybolovleva, daughter of Russian billionaire Dmitry Rybobovlev. Interestingly enough, the entire sum was pledged to charity by the previous owner.


See the complete list HERE.

Offshore mutual funds: International investing made easier

Image source:

Image source:

Many seasoned investors can agree that mutual funds are the ideal investments options especially for those who are still new to the trade or are having difficulty finding time to study how the securities markets work and behave. In definition, mutual funds are a type of investment program that is directly funded by shareholders, trading in several diversified holdings. The offshore transactions involved in this type of investment are the easiest to deal with, especially that they are professionally managed and are often tax-efficient.

In particular, offshore mutual funds can be classified into these categories:

  1. Equity growth fund

This type of mutual fund is also known as a “stock fund.” Basically, it focuses on the investment in equities, which signify ownership of company shares. This is one of the most aggressive and risk-driven mutual funds available, but also among the most potentially profitable.

  1. Fixed-income fund

The focus of this fund is in the short-term fixed income securities. Some examples of this type of mutual fund are treasury bills, government bonds, commercial paper, and corporate bonds.

  1. Money market fund

This type of fund invests in short-term debt securities (commercial paper and US Treasury bills). It’s a relatively safe and open-ended mutual fund that provides decent yield.

  1. Balanced fund

Some investors prefer this type of fund for two reasons: low-risk and potential for capital appreciation. Aside from being a safe option, it allows investors to invest in a particular asset class based on the set minimum and maximum amounts. It is mainly a combination of bonds and stocks.

  1. Stable income fund

The purpose of this type of fund is to produce an income stream for its shareholders through putting money in securities that provide interest payments and dividends.

  1. Emerging market fund

The unique thing about an emerging market fund is its concentration on the investment of securities from several emerging economies in the developing world.  This provides high chances for significant growth.

For a deeper understanding of these offshore mutual funds, consult with an advisor from leading offshore investment firms, such as LOM Financial.

Practical business ideas for single moms

Image source:

Image source:

Being a single mother is an extremely challenging role. Aside from making sure that your family is safe and healthy, you also want to give them everything they need to have a financially comfortable and worry-free life. While many tend to focus too much on work but failing to play an active role in the household, others have found a way to create the perfect balance between the two.

If you want to spend more time with your family while still being able to earn a steady income, read on and discover some of the top business ideas for single moms.

  1. Online Selling

The Internet lets you connect to millions of people around the world and you have to use this medium to your advantage. How? By setting up an online buy and sell business.

Basically, a buy-and-sell business follows this two-step procedure: buy low-priced bulk items and resell them at a much higher price.

You have to be strategic in choosing your products and you also have to learn the fundamentals of running a business from the actual buying of supplies to shipping and customer service. Start small and let your optimism do the rest.

  1. Mobile Day Spa

If you’re a fan of beauty and relaxation, then a mobile spa business is perfect for you. The good thing about this business is you can offer your services like massages, facials, hair-and-makeup, and others, all from the comfort of your home.

Your market can include fellow work-at-home moms or even professionals who just want to have a break from a busy week. You can also offer home services for clients who are not physically capable of getting themselves out of their house because of an illness or disability.

  1. Pet Sitting Services

This business option is ideal for animal lovers especially if you, too, have pets at home. With your experience and dedication to take care of these friendly creatures, you’re good to go. Imagine getting paid while spending the best time with cute and playful furry customers?

Most pet owners are busy professionals who would regularly pay for pet sitting and dog walking services. Most of the time, pet sitting services accept hamsters, rabbits, birds and even fish to their care.

Another related business idea is also setting up a shop for pet care products and accessories and offering them to your regular clients.

Largest stock exchanges in the newly industrializing world

Over the last centuries, the number of countries with stock exchanges has significantly grown and this rise can be easily attributed to the markets’ role in encouraging economic development by providing a generous amount of capital for national development.

Although this connection between progress and stock exchanges has been underrated for many years, it has continued to prove its worth by giving the necessary financial resources for investments that directly benefit the industrial and economic sectors of many developing countries.

Here are three of the largest stock exchanges of today’s developing countries.


  1. Shanghai Stock Exchange (SSE)
Image source:

Image source:

Based in the city of Shanghai in China, the SSE is one of the two major independent stock exchanges in the country and ranks fifth largest in terms of market capitalization (US$3.5 trillion) in the world as of February 2016.

However, SSE is not completely accessible to foreign investors because of the strict policies implemented by the mainland authorities as well as the Central Government.


  1. Bombay Stock Exchange (BSE)


Image source:

Image source:

BSE is based in Mumbai, India and was founded in 1875. It is Asia’s very first stock exchange and often referred to as the fastest stock exchange in the world (approximately performing at a 6-microsecond median trade speed).

The BSE has 5500 companies in its listings and in the global ranking, it secures the 11th spot with over $ 2 Trillion (as of July 2017 data), with stocks trading accounting for 4% of the country’s economy.


  1. Brasil Bolsa Balcão S.A. (B3)
Image source:

Image source:

The Brazilian stock exchange based in Sao Paulo was formerly known as BM&FBOVESPA and is currently the 13th largest in the world (R$2.37 Trillion market capitalization at the end of 2011).

However, the growing political turmoil in the country the following years created a slump in their economy that resulted its market capitalization to shrink to R$2.21 trillion in 2015.


REPOST: Lessons From Cuba For Real Estate Investors In New And Emerging Markets

Lead with heart, create alliances with other entrepreneurs, and many other pieces of advice from Forbes‘ Susan Leger Ferraro with regards to real estate investments:


It’s not always as “simple” as building a company. In some cases, an investor needs to help form the industry they want to emerge in. This is what I am working on as a member of the Forbes Real Estate Council and an eco-friendly real estate developer.

My first visit to Cuba was in 2015, and it was love at first sight. Life in Cuba is all about passion and simplicity, and I decided I wanted that life. I wanted to give others the joy of visiting Cuba too, so I set out to support the development and expansion of infrastructure to meet the growing demands for tourism.

My husband, Jeffrey, and I are partnering with Cubans to rebuild modernized apartments in Old Havana to host tourists. We work directly with local artisans, schools and craftsmen to promote a new kind of experience for visitors that promotes eco-tourism and cultural connection. It’s a reciprocal relationship: We are learning the needs of the Cuban people as well as sharing our real estate expertise.
Here are some of the best strategies I have learned through this venture for developing real estate in an emerging economy:

1. Develop and hire local talent.

Wherever you seek to invest, work to develop and enhance the capacity of the local population. This is especially important in countries like Cuba, where international mentorship opportunities are limited. One way to connect with local talent is to host a meet-and-greet with local vendors, starting with tradespeople. Friends bring friends with them and offer collaboration and talent.

2. Build the infrastructure.

Many Cubans rent out rooms in their houses. Known as “casas particulares” or private homes, this is a cheap option for the nearly 2.7 million tourists who visited Cuba in just the first half of this year. Hotel stays are quite expensive, so the casas particulares offer a great alternative. Renting out rooms is one of the few avenues that has always been available to Cubans who wish to become entrepreneurs.

I worked with owners of casas particulares to help them enhance their properties and market their rooms more effectively. I also encouraged them to charge higher rates once these improvements were made. Short-term home rental platforms are important differentiators, and these steps can elevate a region’s short-term hospitality industry as a whole.

In the Caribbean, many landlords support renting units like these to international travelers. Owners can begin by listing one or two units on a site meant to reach these vacationers to see what traction they get. Location, location, location is especially important to tourists, so owners should be sure to highlight the unique points of their locales.

Continue reading HERE.

Consider these tiny tropical paradises when investing in offshore mutual funds

Many offshore financial centers have been dependable jurisdictions for international financial investors as well as commercial and corporate entities.  Within the industry, there are regions that have become the top go-to locations that offer generous benefits like financial privacy and tax liability. Some perfect examples are the islands in and near the Caribbean region: Cayman Islands, Bahamas, and Bermuda.

The Cayman Islands

Image source:

Image source:

Located in the western Caribbean Sea, this offshore financial center has been considered as one of the largest in the world. It primarily provides its Western clients services like offshore mutual funds and offshore banking. What makes the islands so attractive to investors and companies is the fact that it does not impose income tax, estate or inheritance tax, corporate tax, or capital gains tax, to name a few. Cayman’s highly strict banking laws protect banking privacy and they do not have any tax treaties with other countries.

The Bahamas

Image source:

Image source:

Located just a few hundred kilometers away from mainland USA, the island-country of the Bahamas is one of the most prosperous and richest countries in the Caribbean region.  Its government has been actively promoting programs to attract offshore businesses to its islands. Aside from the fact that the country is a popular tourist destination among European and American travelers, the nation’s well-designed tax laws as well as tax regulations particularly on asset protection, have been attractive characteristics for non-resident investors and commercial businesses.  In addition, the Bahamas boasts of an open economy, with their currency, the Bahamian dollar, pegged to the U.S. dollar.


Image source:

Image source:

This wealthy Atlantic paradise has two main attractions: first, it is home to one of the world’s biggest reinsurance centers and second, it has made its name as one of the most dependable offshore centers on insurance-related securities and offshore mutual funds. Although geographically nearer to the Caribbean, Bermuda is actually a part of the British North America, located in the Sargasso Sea. One of the world’s most trusted offshore financial services firms, LOM Financial, is headquartered right at the heart of this British Overseas Territory (BOT) in Hamilton, with offices in the two aforementioned jurisdictions.

To know more about offshore mutual funds, click HERE.

Economic losses due to Hurricane Harvey may reach $190 billion

Image source:

Image source:

While it may take several months before the full economic impact of Hurricane Harvey can be accurately assessed, many are already considering the disaster to be the most expensive in US history. Analysts estimate $190 billion in economic losses (business, infrastructure, etc.). Houston, one of the country’s economic powerhouses, was the most severely hit, with its oil and gas industry taking the heaviest toll.

Harvey struck at the heart of America’s oil and gas industry, affecting nearly a third of the US production. Inevitably, refineries around the Gulf Coast were closed down and pipelines used to transport oil to other markets were shut—all of which contributed to oil price’s spike. Companies, including those outside the fuel industry, are still figuring out how they can resume operations. Along with revenue losses, the catastrophe may also lead a significant number of jobless claims.

Image source:

Image source:

Although Harvey’s impact on the local level is apparently overwhelming, it is not expected to make a huge dent in the national economy. Thousands of homes and other infrastructure have been destroyed, but rebuilding efforts in the future could offset challenges elsewhere. However, depending on how recovery takes, the GDP for third quarter is expected to slow down a little.

The storm will likely impact primary insurers, traditional reinsurers—including those based in offshore financial centers like Bermuda—and the National Flood Insurance Program with the potential to also affect collateralized reinsurers and insurance-linked securities markets.  The storm’s most significant impact, however, is on families who do not have sufficient financial bedrock as well as property or life insurance. In fact, according to the Federal Emergency Management Agency (FEMA), around 350,000 people have registered for assistance from the federal government.

Hurricanes are among the most destructive forms of natural disasters, with the top 10 most devastating storms to hit the US making a total financial loss of nearly $450 billion. Harvey and other massive weather-related catastrophes are part of a continuing, costly trend.

REPOST: Leading Digital Transformation Is Like Urban Planning

The key to creating a new digital revolution is doing it the systematic way. Similar to urban planning, it has to have anchoring landmarks, focus on removing structural hurdles, or entirely break away from old systems and build new ones. More insights from the Harvard Business Review:


Most companies want their businesses to keep pace with digital startups, but end up bogged down by the need to fix the daily challenges that their decades-old IT systems create. How do yoy redesign and rebuild major infrastructure while keeping the day-to-day work going? This kind of challenge is often referred to as “repairing the airplane while you’re flying it.” But a more instructive analogy might be the redesign of a major city’s infrastructure.

Specifically, there are three urban planning strategies, commonly followed by major metropolises, that leaders can use for inspiration in the race to keep up with digital competition. They include building glistening landmarks that anchor their digital strategy (as Dubai has done), removing roadblocks and bottlenecks to improve their underlying speed and agility (Boston), or changing course altogether to construct an entirely new city (Shanghai).

Dubai: Erecting Modern Landmarks
Targeted investments in striking new sights, like Dubai’s Emirates Office Tower or London’s giant Ferris wheel, serve as useful starting points for broader revitalization plans. The Emirates Office Tower was one of the first skyscrapers that marked Dubai’s transition to being a modern focal point for the United Arab Emirates. Today Dubai also boasts the world’s tallest building, artificial islands, the first hotel with a rain forest, and the largest indoor theme park on earth.

In the same way, investments in landmark digital projects that significantly enhance customer experience can help launch wider digital transformations. By developing visible, high-impact apps or improving data analytic capabilities separately from core IT systems, companies can roll out new offerings where they will most strongly change perception and put pressure on digital rivals — even if their back-end systems still need years to catch up. A pragmatic, output-focused approach can provide a catalyst to the back-end reinvention that needs to follow, and kickstart a company’s digital transformation by making the benefits real and impossible to miss.

For example, by designing a new cloud-based customer service platform, within nine months a power company could go head-to-head with an internet service provider that had started to sell electricity alongside Wi-Fi services and cheaply financed cars. Now the utility will be able to provide not just power but also phone, internet, smart meter, smart home, and security services. To customers, the company feels as nimble and innovative as its digital competition, even though its back-end systems remain problematic.

Boston: Removing Roadblocks
At the other end of the spectrum, companies can first focus on removing the structural hurdles that prevent them from moving with speed and agility over the long run. Boston, with its Big Dig project, for example, invested heavily in creating room for more vehicles and future growth by tearing down an aging elevated highway and replacing it with a tunnel highway network to circumvent the maze of congested roads in its downtown area. Even with the project’s delays and costs, city planners confronted the fact that the old infrastructure just wouldn’t fit the area’s transportation demands.

Companies can help themselves become more agile and remove their own bottlenecks by taking a similar approach. For example, retailers will struggle to put the right products on their shelves until they have accurate data about the dimensions of the packaging itself. Companies with sales forces that collect important customer data inconsistently in notes fields, because their data collection systems haven’t been kept up to date, will wrestle with problems downstream because workarounds must be developed to compensate for the poor quality of the initial input data.

The business case for these improvements is often hard to make because the benefit in speed and agility is indirect. It requires an extraordinary level of vision to see how a very different company will emerge at the end of the process and to persevere — as, I’m sure, the architects of Boston’s Big Dig can testify.

Continue reading HERE.

« Older posts