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CURRENCY WARS - First, a major Yen decline

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CURRENCY WARS thread /

Headline: A major Yen decline underway

How low can the yen go? Is FXY-100 the next big Target ?

=============================================

USD- priced in Yen => :24hr-jpy-small.gif

 

Yen - priced in US Cents:

5-years : 2-years : 6-mos : 10d // A bounce may be due soon ? -- Latest FXY

fxy.gif

 

FXY : 115.67 / Change:arrow_dn_sm.gif -0.76 = 84.75 (25 Dec. 2012)

 

Japan Stocks Rise as Yen Touches 20-Month Low; Rubber, Gold Gain

Bloomberg - 7 Hours ago

Japanese stocks advanced, sending a benchmark index toward the highest close in more than eight months, as the yen’s drop to a 20-month low boosted earnings prospects for exports. Rubber and gold prices

 

CURRENCY ETFs:

=========

DXY / US$ : All-data : 2yrs : 6mos : 10d : Latest

FXA / A$ -- : 5-years : 2yrs : 6mos : 10d : Latest

FXB / GBP : 5-years : 2yrs : 6mos : 10d : Latest

FXE / Euro : 5-years : 2yrs : 6mos : 10d : Latest

FXF / SWF : 5-years : 2yrs : 6mos : 10d : Latest

FXY / Yen- : 5-years : 2yrs : 6mos : 10d : Latest

( Other FX )

DBV / AllFx : 5-years : 2yrs : 6mos : 10d : Latest

usdEGP / Egy. Pound : 5yr : 1yr : 3mo : 10d : Latest

usdNOK / Nor. Kroner : 5yr : 1yr : 3mo : 10d : Latest

usdMYR / My. Ringgit : 5yr : 1yr : 3mo : 10d : Latest

=== =====

GEI Newsgroup :: http://www.congoo.com/GlobalEdgeNews

EGP /Egypt---- :: http://www.greenener...showtopic=17182 : EGP-latest

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Yen on defensive on U.S. fiscal worry, helps Nikkei

Reuters - 6 Hours ago

Uncertainty over whether U.S. lawmakers will strike a deal by an end-of-year deadline to avert a severe fiscal retrenchment undermined the yen and bolstered Japanese shares, but trading volume was low Yen on defensive on US fiscal worry, helps Nikkei Livemint.com

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BOJ Outpaces Fed in Easing as Yen Heads to 90: Chart of the Day

La Repubblica - 3 Hours ago

 

Dec. 28 (Bloomberg) -- The Bank of Japan will outpace the U.S. Federal Reserve in printing money next year, putting the yen on track to weaken to about 90 per dollar, according to Bank of America Merrill

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If the Yen does not bounce very quickly... Watch out !

 

(A New Year often brings the reversal or an acceleration of a currency move.)

 

FXY / Yen etf ... update

 

fxy.gif

 

It could get very UGLY* for the Japanese currency in 2013.

The currency could go into freefall - and that may greatly increase rather than reduce the problems

for this most-heavily indebted country

 

*"Very Ugly" would mean a drop below the next Target of 100

 

=== ===

Etf versus Yen Spot calculations:

 

Yen : 86.00 (yen per US$1)

FXY : 113.93

1/ FXY : 87.73 (86.00 would have required: 116.27, so FXY is "undervalued" by about $2.30)

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Moneyweek is getting all excited about Japanese stocks rising in this inflationary scenario. But if the yen is falling won't it be a case of swings and roundabouts - unless you currency hedge of course?

 

(incidentally hi again after many months of not posing - and a happy new year to all).

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It's good to see that old familiar logo again, Newbear.

I hope you are well, and prospering

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Weak close to the year for the Yen...

 

FXY: 113.03 -0.90

Open: 113.61 / High: 113.66 / Low: 112.98

Volume: 257,000

Percent Change: -0.79%

 

Inverse: 113.03 + 2.30 = 115.33, then 10,000 x 1/115.33 = USD : Yen 86.71

 

"Watch Japan. Things may unravel there first, and a sliding currency may eventually trigger a global jump in rates"

If Kyle Bass (the hedgie that runs Hayman Capital) is to be believed, Japan will pop in about 2-3 years. See https://www.youtube....h?v=HtEw2FdVe_0 (8mins) and more in depth, if you have the hour to spare. https://www.youtube....h?v=JUc8-GUC1hY

Let's assume his scenario happens and Japan pops by 2015. Markets get spooked, Japan (partially) defaults, Yen turns into Argentinian peso.

Does this trigger a new debt crisis affecting UK rates through contagion or will the markets shrug it off and carry on as usual?

 

If the latter, then perhaps we're looking at another decade or even longer of kicking the can down the road.

If the former, then we've got a double if condition that needs to be met. Say Japan Pops and Contagion each have a 75% chance of happening, then there's only 50% chance it goes POP over here. I don't know what the odds are, but it's a lot of ifs.

 

It might happen sooner than 2015.

And maybe you should watch Egypt too - they seem to be headed into a very serious phase of their crisis.

They are running out of money, and have a huge population to feed, and their main industry is tourism

 

A parabolic move may have started (in the USD priced in Egypytian Pounds) ... EGP-update

 

egp.gif

 

EGP per USD: 6.3698 +0.0132 / +0.21%

(the big jump of 1.8% was during the prior trading day)

 

As the world sees how these currency problems unravel into hyperinflation, it may be harded are harder

for Central banks to maintain confidence in the conjuring tricks that have worked over the past few years.

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The Yen was better than Gold for a long time, but not in recent years

 

goldjpylog.png

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Dollar slides versus high-yielding currencies; yen slumps

Reuters - 4 Hours ago

The dollar slid against high-yielding currencies such as the Australian dollar, while the yen sold off on Wednesday after U.S. lawmakers forged a last-minute deal to avert huge tax rises and spending

 

FXY-in-FXA

fxyinfxa.png

 

The Yen in A$ looks even weaker.

 

In addition to the gains in being short, there's been a nice "yield pick-up".

But the bouncebacks when they come are FAST, and then next may be from 1.04 (see chart)

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Took profits on my recent yen short trade. Still like the lok of the graph on a longer time scale. Will look to re-enter when inidicators become less overbought.

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THE YEN may surprise to the Upside, says EWMS

 

The Yen is about to surprise (nearly) everyone in a big way.

For the past 1-2 months the Yen has been building a momentum basing pattern, which once complete will result in a very, very sharp reversal rally. Don't believe it?...

To find out more, please log-in to view the Daily Currency Forecast for January 2, 2013

 

Paul Thomason

Elliott Wave Market Service

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DOLLAR UP / Gold Down !

 

DXY vs GLD ... update

dxy.gif

 

DXY - US Dollar / Trade-weighted ... 10year-chart

dxyz.gif

 

 

Gold Set for Worst Run Since '04, Fed Signals No Buys

. . .

The Dollar Index (DXY) rallied to the highest in six weeks today, and was set for the biggest weekly gain since July, weighing on commodities including oil.

 

“A big part of gold’s bull market has been loose monetary policy and an end to that will hurt the rally,” said Wang Xiaoli, chief investment strategist at CITICS Futures Co., a unit of China’s biggest listed brokerage. “It’s still too soon to call the end because these lower prices may finally attract the physical buyers who have largely been absent.”

Twenty analysts surveyed by Bloomberg expect gold to advance next week on concern that U.S. lawmakers are doing too little to control the deficit in the world’s largest economy, while five were bearish and two were neutral.

Gold for February delivery slipped 1.5 percent to $1,649.20 an ounce on the Comex in New York.

 

Annual Climb

Cash bullion advanced 7.1 percent in 2012, capping a 12th annual gain as the Fed announced a third round of so-called quantitative easing, the Bank of Japan expanded asset purchases and China approved additional infrastructure spending. Gold’s relative appeal is likely to diminish as so-called fear trades fade, according to Tom Kendall, head of precious-metals research at Credit Suisse Group AG and the most accurate precious-metals forecaster in the past eight quarters tracked by Bloomberg.

Cash gold slid 1.4 percent yesterday as the Fed’s minutes were released. At the December meeting, the FOMC announced Treasury purchases of $45 billion a month in addition to $40 billion a month of mortgage-debt purchases begun in September.

===

/more: http://www.businessw...nd-of-purchases

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CURRENCY thread /

Headline: Is a major Yen reversal underway ?

 

OTHER CURRENCY ETFs:

=========

FXA / A$ -- : 5-years : 2yrs : 6mos : 10d : Latest

FXB / GBP : 5-years : 2yrs : 6mos : 10d : Latest

FXE / Euro : 5-years : 2yrs : 6mos : 10d : Latest

FXF / SWF : 5-years : 2yrs : 6mos : 10d : Latest

( Other FX )

usdEGP / Egy. Pound : 5yr : 1yr : 3mo : 10d : Latest

usdNOK / Nor. Kroner : 5yr : 1yr : 3mo : 10d : Latest

usdMYR / My. Ringgit- : 5yr : 1yr : 3mo : 10d : Latest

 

I have changed the title of the thread - and added some currencies.

 

With the new focus, I think it merits PINNING.

 

genews5.jpg => For FX stories, Click here : http://www.congoo.com/GlobalEdgeNews/

 

EXAMPLE:

Euro crisis as it happened Shock fall in UK services activity raises recession fears

Rally continues as European markets close higher European markets have continued their January jump despite a mixed economic picture, with poor UK service sector data but positive jobs news from the US. The FTSE 100, having broken the 6000 barrier earlier in the week after the US fiscal cliff deal, rose another 42.50 points to end at 6089.84, its best level since February 2011. Joshua Raymond, chief market strategist at City Index, said

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Moving money in FX, and moving yourself - here's one story...

 

God help us all - the man who STRed in 2009 is now buying. If that's not a sign of a top then I don't know what is. ;)

Seriously, hope it works out, but to leverage up to the eyeballs on overpriced London property at these rates... that could end up costing you a lot more than you imagined if things go south.

 

A better idea, than exposing yourself to a market that may "head south,"

might be to head south yourself, and buy something at half price in Chichester.

I reckon you can rent it at a higher yield, and then use the money to rent in London,

until you can escape, and move south yourself.

 

Why expose your capital to so much downside ?

 

Good luck anyway, B. Kidding aside, I hope it works out for you.

 

In my own saga in HK, I got an offer on my property here yesterday, and turned it down.

I am hoping for an improvement today, since I think the buyer is rather keen.

But I have doubts if we can bridge the gap (about 2.4%).

 

If I were to sell at the mid-price, I would have captured a gain of about 55% since 2007.

The other HK properties that we sold a few years ago have appreciated more than that,

and my GF never stops reminded me that "I convinced her to sell." ( My memory is that

we agreed on that decision, but what do I know: I'm just a man.)

 

Meantime, back in Good 'ole Blighty (since 2007):

 

http://www.dailymail...-peak-2021.html

 

Quote

 

Property prices could take another eight years to recover from the recession and regain their 2007 value, according to forecasts by an estate agent. Homeowners in Wales, North Yorkshire and the North West will wait the longest to see the value of their property return to pre-recession value according to Knight Frank. In Wales, prices won't return to their average peak of £154,696 until 2021 with the current market value more than £20,000 down to less than £132,000.

 

In both Yorkshire and the North West, prices will not hit 2007 heights again until 2020, in what is likely to be the slowest housing market recovery in economic history. London will see the quickest recovery, with prices expected to return to their 2007 £303,739 average as early as next year.

 

The capital is still regarded as something of a property hotspot in the global market with properties in prime locations rising by more than half since 2009 and up nine per cent during 2012. Overall, there is something of a north-south divide, with prices in the South East to hit peak levels by 2016 and East Anglia by 2017. Grainne Gilmore, head of UK residential research at Knight Frank, said: 'Some five years after the start of the financial crisis the housing sector in Britain still does not bear the hallmarks of a fully functioning market.

Unquote/

 

 

So if you had sold out in the UK, and bought in HK in 2007 - you could now return to the UK with 50%+ more money to spend, as well as some sort of currency gain - another 20%+.

 

47990851.gif

 

Funny how that all works. You can "create" wealth by moving yourself around, and by moving money around. I wish all of my investments had been so successful. But at least I got a big one right. I am now thinking of investing in the US (if I sell), lets see how that might work out.

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The Yen is about to surprise (nearly) everyone in a big way.

For the past 1-2 months the Yen has been building a momentum basing pattern, which once complete will result in a very, very sharp reversal rally.

Don't believe it?...

 

Paul Thomason, Elliott Wave Market Service

 

FXY / CurrencyShares Japanese Yen Trust ... 1yr-chart : 3yrs

 

fxy.gif

 

3-years

fxy3yr.gif

 

FXY: 112.65 +0.90 / +0.81%

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JM thinks the Yen will drop... over the next decade

 

John Mauldin on KWN : Three very interesting points in this interview

 

King%20World%20News%20-%20John%20Mauldin%2011%3A19%3A11.jpg

 

KWN-MP3 : http://kingworldnews.com/kingworldnews/Broadcast/Entries/2012/12/30_John_Mauldin_files/John%20Mauldin%2012%3A30%3A2012.mp3

 

(1)

Japan has too much debt, and it cannot allow its interest rates to rise, so it will have to keep rates low by flooding the markets with its currency. The Yen rise from Y300 to the USD to Y75. Over the next decade it may retrace a big part of that. The weaker yen could help push up Japanese stocks

 

(2)

France is in far worse shape than most people recognise, and it is doing "all the wrong things." This will eventually hurt the Frenh banks, and they have a key role in financing world trade. The world will have to learn to finance trade with much less involvement by the French banks.

. . .

(US$)

If the US "can get its deficit under control" then the US$ could do well. But that will require: more taxes than the Rep's want, and more cuts than the Dem's want. If the US fails to get the deficit fixed, then JM will buy more gold each month.

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(For Jake & others, as posted on the Mauldin thread):

 

You should think about buying :

Yen-priced Futures on the Nikkei, or a Call option with a Yen strike price.

They should do well, if JM is right about big Yen weakness.

 

As you may know, I think that Egypt is headed into a Hyperinflationary spiral.

There are disruptions in the Egyptian economy - but Egypt's stock market is doing well:

 

The recent EGP currency weakness ... update

 

egx30.gif

 

...has helped to re-ignite the stock rally - Up about 57% in a year, despite all the troubles !

 

Maybe we will see the same thing in Japan: Stocks outperform as the currency slides

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Another Big Drop in the Yen yesterday- to New Lows ... the small rally attempt faded fast:

 

FXY : 109.92 -1.16 / -1.04%

Open:109.96 / High:110.33 / Low:109.66 ...

Volume: 649,212

 

FXY/ Yen etf ... FXY-chart-W : FXY-D

58894759.gif

 

The weekly chart shows the Yen may be at the bottom of a channel and/or an Uptrend line.

The Daily chart shows this move left A GAP DOWN

- so there is a reasonable chance that a better rally could start next week

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"The Pound is by a long way the most overweight currency in the SDR"

 

FXB / Pound Sterling etf ... FXB-6mos-D : FXB-10yr-W

 

fxbqwx.gif

 

Great find, Vicarious !

Especially this part:

Our careful analysis shows that the SDR composition allows the UK and US to be lazy, and everyone else to turn a blind eye. Few British or American workers have any intention of doing anything cheaper than a Thai factory worker, so their negative balances have in the meantime been parked with the Thais - within SDRs - as a store of wealth. The Thais are assuming that this makes a good solid base for Thailand's own 'Foreign Currency Reserve'.

 

For as long as everyone else is buying Pounds as part of a package labelled SDRs (or indeed in their own right) this allows the British to run a big trade deficit for a very, very long time. Lots of the outstanding calls on the British to get off their collective ass are frozen into those SDRs and held by the rest of the world as a trusted store of value.

 

The Pound is by a long way the most overweight currency in the SDR, being 11% of its value but less than 3% of the world economy. It's an enormous current privilege for us British.The world's financial garden mulch could be legitimately advertised "Now with extra British Pounds!"

 

Somehow the British got to this situation of being a key component of the SDR. But as a component - and from the point of view of the user of SDRs - you'd have to say the Pound is now spectacularly unfit for the purpose.

 

I am going to post a copy of this on the FX thread, with a Link back to your post (#381)

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My question on this thread would be directed at FX traders. Is there a case in the cycle to dump £ for another currency. Gold down approx 10% from 2011 high, whilst London £ house prices up 10% since then. Is there a play to be had here.

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Sell Pounds, Buy Gold might be a good move here IMHO...

(Or lower, if you expect to see a Double Bottom on the Green line)

 

goldinfxb.png

 

Or Buy GLD calls, and FXB puts if you want limited risk -

(Or take that action when you think the time is right.)

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Possibly Bubb. I see further moves down in gold sterling house/gold ratios

 

I can see a rest in London prices 2013 as they have overshot yet credit is easing significantly which means leverage and house prices marching up over the next few years. Gold I consider 5-10% a year growth yet London real estate will outperform. The gold/house price ratio will the swing down again n favour of gold after 3 -5 years. The top for me was 2011 for gold/houses pricec ratio in London anyway and outside far greater.

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