User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Wednesday August 3, 2005 - 20:11:12 GMT
Foreign Exchange Analytics - www.fxa.com

Share This Story:
| | Email

Forex: Why You Should Buy Yen

Why You Should Buy Yen

I am a believer in the notion that China will allow the yuan to appreciate on a daily basis and over time this pace could quicken (about 0.02% a day in last four days) or slow. I suspect there is enough flexibility in the current system to leave yuan But there is no turning back to say a narrow band around 8.11 as opposed to 8.28 before July21. The world will not stand for it and China has too much to lose to ignore global pressure to move to a float simply to support exports. After all it is China's wage structure not its exchange rate that offers a comparative advantage in labor intensive ventures. And even at a 0.02% average daily pace for yuan appreciation, that is 2% in 100 working days. I suspect too that the 0.02% has a greater risk of accelerating than decelerating or pausing in the next few months as trade tensions with the US (Congress first and foremost and the Bush administration) force more movement up in the yuan. Failure to do so and Schumer and Graham bill will go to a Senate Vote where a veto-proof margin is likely and Treasury will have no choice but to name China an FX manipulator, handing Congress a free pass to pursue protectionist legislation against China. My bet is the yuan is up another 2% by early October.

Officials on the record in Korea and off the record in the US and Europe also want to see the yen appreciate. The notion that the yen should be a weak currency while China pegs the yuan to the dollar or risk being outflanked by Chinese exports no longer is very compelling. Japan's large external surplus and high domestic savings rate also supports a higher currency even if short and long term rates remain well below the rest of the world.

But there are other reasons for liking the yen apart from the lift provided by the appreciating yuan and official desires outside of Japan for broad region-wide currency appreciation.

China as an engine for growth in the region is cranking along at a 9% growth rate...officials appear to have a handle on a soft landing and in this case it looks more like a touch down rather than a landing. Japan's exports to the US are doing well (autos more and electronics less) and they should recover with China ahead. Moreover there is a burgeoning domestic economy - the sleeping giant may have finally awoken. Consumer and firm sentiment indices are by and large turning up. Firms are spending on plant and equipment and firms are hiring more full-time rather than temporary workers. Officials at the rather cautious BoJ are ironically most upbeat (compared with MoF). Governor Fukui today said confidently that inflation should turn positive by end-of-year or early-next...this is critical for ending the zero-rate policy and turning toward a more neutral policy stance (surely to be far more measured than the Fed's measured pace). In the present world of transparent monetary policy, we do not need to see a cut in the daily money market liquidity target first to start accumulating the currency. The yen is going to rally months ahead of actual tightening measures from the BoJ.

Japan's equity market is rallying as well - at 13-month high and bumping up against 12,000, a psychological level...bullish if broken. Real money accounts in recent days are said to have been adding Japanese equities to portfolios. While international equity flows tend to be more currency neutral than say fixed income flows, the stock market rally is not a primary reason for being long yen. Sure Japan is likely to be a net capital exporter ahead as it should given low if rising JGB yields and a current account surplus. But this flow story is more likely to be do equity-inflow-related in the near-term.

Finally the main hang-up for the yen this week is the much awaited vote on postal savings reform bills in Japan's Upper House (slated for Friday but some legislators are trying to have the vote delayed to extend the debate). Koizumi has promised to resign and call an election of the bills are not passed. The vote in the Lower House was razor thin and took lots of finessing by the government to get it through. Well the opposition is said to be even greater in the Upper House and this includes some LDP members (factions). But these statists run the risk of being booted from the LDP if the government falls on a rejection. They could be hung out to dry...not in the "majority" and not in the legislature full stop. What if it is rejected anyway? Buy yen on weakness. I have seen many changes of government in Japan over the years, including a brief stint by the opposition SDP...and asset prices and the yen rarely moved more than momentarily and never by much.

And I must note that one of the more knowledgeable yen masters in the FX market I know on the sell-side has argued convincingly that August is seasonally a very good month for the yen.

Call me hardheaded but I still like euro/yen lower (think start looking for 130 initially) and think stg/yen and chf/yen are also good ways to play it. And dlr/yen (think 101.65 break is growing likelihood in next quarter) and Cad/yen of course.

David Gilmore
FXA
www.fxa.com

 

Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."



Elevate Your Trading With The Amazing Trader!

The Amazing Trader includes:
  • Actionable trading levels delivered to YOUR charts in real-time.
  • Live trading strategy sessions.
  • Market Updates with Trading Tools.

Register To Test Your Amazing Trader


Trading Ideas for 23 October 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Tue 24 Oct
All Day flash PMIs
Wed 25 Oct
01:30 AU- CPI
08:00 DE- IFO Survey
08:30 GB- GDP
14:00 CA- BOC Decision
14:30 US- EIA Crude
Thu 26 Oct
11:45 EZ- ECB Decision
12:30 US- Weekly Jobless
14:00 US- Pending Homes Sales
Fri 27 Oct
12:30 US- GDP
14:00 US- final Univ of Michigan

Forex Trading Outlook


Potential Trading Opportunities


  • POTENTIAL PRICE RISK: Medium Tue-- All Day Global flash PMIs. First good look at October economic performances.



  • POTENTIAL PRICE RISK: HIGH Wed-- 01:30 GMT AU- CPI. Top Inflation indicator.

  • POTENTIAL PRICE RISK: HIGH Wed-- 08:00 GMT DE- IFO Survey. Top German indicator.


  • POTENTIAL PRICE RISK: HIGH Wed-- 14:00 GMT CA- BOC Decision. No Policy Change Expected.


  • POTENTIAL PRICE RISK: Medium Wed-- 14:30 GMT US- EIA Crude. Top Weekly WTI Statistic.



John M. Bland, MBA
co-founding Partner, Global-View.com

EXCLUSIVE: Global-View Daily Trading Chart Points Updated

EXCLUSIVE: Global-View Free Forex Database updated




TRADER ADVOCACY ARTICLES

Trader's Advocate Articles..

pic

Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

 
Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map


Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog

Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.

 

WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105