Straight to the point.
Safe haven currencies are “sold” when investors are feeling confident , and the environment looks “safe”. The big losers here have almost always been BOTH the USD as well the JPY with a little bit of CHF (swiss franc) thrown in there as well.
- Since the Swiss pegged the Franc to the EUR most CHF pairs range, and are generally ” no fun” to trade.
- USD as the world’s reserve currency “should” take in flows during times of fear and “risk aversion”, although at this point it remains to be seen.
- JPY has always benefit from “risk aversion” as Japan’s debt is for the most part held domestically providing relative security in times of fear.
- The “Commodity currencies” such as AUD , NZD as well CAD will be “bought” when investors are feeling confident, and the environment looks “safe”.
- EUR as well GBP hang somewhere in the middle as they generally don’t fit into either category.
Since the massive interventions by Central Banks these “usual and general” correlations have suffered recently, as for many it has been very difficult to discern which is going up / down – why? And most importantly – what roles do they serve in the global currency puzzle.
Can you spot to next trend?
Can you put your finger on what “shift” in currency movement we will see in the coming year?
Solve the “Forex Puzzle” and win.
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Judging by where gold is and general market being several years now into a bull w relatively high unemployment I would say any major taper is a hoax. Probably back to dollar down metals up after a serious market correction or even crash. I don’t have an accurate time horizon though. No clue really
Taper talk is a complete hoax. Testing public reaction etc.
The FED is setting itself up to look like “the hero” in this completely engineered stunt, so the general public won’t “have a cow” when they announce that they are DOUBLING the amount of stimulus.
I assume most people (who know absolutely nothing of how the FED works) will cheer! As the USD is slowly and sytematically devalued to “near zero”.
the next trend may be oil getting the shit kicked out of itself.they had fun kicking the shit out of gold.and the “safe haven”bullshit for use,is even more apparent in forex.and a year from now,well maybe you,as a forex trader you can tell us where we can go buy rmnb/yuan and stack those.your being miffed is very telling,to me anyway.
I’ve got my eyes peeled – and will most certainly be stacking Yuan to the ceiling when the opportuntity presents itself.
I get a touch frustrated at times with the fact that most people actually think the “FED” is a government arm/institution when it’s nothing of the sort. You explain to people that the FED is a private bank ( with wealthy investment group ) that function purely for profit, and they think you are mad.
For those readers that don’t know the history:
Back in the day they came up with the name “federal reserve” on purpose to mislead the general public…the FED is a private bank that “has the sole monopoly on printing money” then “lends” this money to the government with interest. Each dollar printed is printed “out of debt” in a system that is designed to transfer wealth up the ladder.
Call me mad but the eurusd cross long could probably have its day soon too
“Markets are constantly in a state of uncertainty and flux
and money is made by discounting the obvious
and betting on the unexpected.”
— George Soros
Exactly why I’m short USD.
I don’t really care how many separate adds / positions I add to here “around the horn” – as I can double my order, then double it again, and again , and again…….then again.
I”ve been blasted here in the last few days getting started with the “first wave” a lil early.
It gets exciting now….as better opportunties present themselves for “round 2”.
Thanks Kong for explaining us with plain English so I can understand !!
Appreciate your macro brain always.
No problem ( I think? )
I’ts a very interesting story….if it wasn’t so “boring”.
Not exactly “free reading” for most.
Trend of 2013
USD continues to move up against all pairs. Watch for 10 year at 3.0% before it really truly rests.
Drummer is right, WTI at 65.00 makes total sense. New Iran Govt and lack of USA demand brings that. Cad and NOK sell off
AUD, NZD, etc continue to get killed ala 1994 over tapering and lack of Demand from China.
Euro gets killed when German Court’s Ruling comes out limiting OMT.
Not much of a mystery. Just amazed how good you are on these small oversold rallies as we move down.
Great Example, Aud/USD closed at .9142ish..Earlier in this week you said go long the pair..repost..June 25, 2013 at 12:39 am of mine in your blog…”jskogs..Rate cut is still an unknown but with the Aussie Bond Yields pushing up odds increase. The downtrend is the China Story, not Stevens so much imho. Tonight we see aud/usd at .9222″…So Kong, yes, the trend is down, but you nailed that bounce perfect. You are very good at that. Total Props.
Thanks Trade_Nymph.
It’s nice having you in here contributing as your insight, comments and knowledge are always a treat!
Next week should see some serious fireworks!
Friday NFP without a POMO purchase support coming off the ECB meeting should create the biggest boom. I like fireworks. Thank you for return props.