Forex Trading System
The hammer and the yen
It’s been rumored for a while, but recent statements by Japanese finance officials make a stronger yen
seem increasingly likely. Is the yen carry trade really doomed, or is this too obvious a conclusion?
In this context, that means buying it and raising its pricevs. the other major currencies, especially the current victimsof the yen carry-trade — the New Zealand (NZD) andAustralian dollars (AUD), the British pound (GBP), theeuro (EUR), and the U.S. dollar (USD).
Many foreign exchange market themes come together in
today’s yen situation. The first is a potentially high-riskenvironment. No one knows for sure whether a Japanesemonetary policy change and an unwinding of carry tradesis going to force a trend reversal; however, the probabilityof a reversal is rising.
today’s yen situation. The first is a potentially high-riskenvironment. No one knows for sure whether a Japanesemonetary policy change and an unwinding of carry tradesis going to force a trend reversal; however, the probabilityof a reversal is rising.
It’s a mistake to take a position on this probability tooearly. High-risk situations sometimes evolve slowly andsometimes they deliver shocks. If you are positioned earlyand wrong, a shock can ruin you.
No comments:
Post a Comment