The US dollar continued to hit new decade lows against the Japanese Yen and is inching closer to my 85 target. As you can see in the chart below, there is no support from here to 85. With US interest rates below Japanese rates, more adjustment is happening in USD/JPY.
I do [...]

Posted in Fed Rate Cut, Fed Rate Cut Expectations, Fed fund futures usdjpy, Federal Reserve, Forex News, Forex Technicals, boj intervention, forex signals, usd/jpy, usd/jpy intervention 14 Comments »

The biggest event risk this week is undoubtedly the Federal Reserve’s monetary policy decision on Wednesday. Now more than ever, the Fed’s decision could turnaround the currency and equity markets. Since the last interest rate cut by the central bank on October 8th, the dollar has rallied more than 8 percent and the [...]

Posted in Currency Intervention, ECB, FOMC, Fed Rate Cut, Fed Rate Cut Expectations, Fed fund futures usdjpy, Federal Reserve, Forex News, Forex Podcast, US Dollar, US Economy, coordinated rate cuts, euro, forex blog No Comments »

So far this morning, central banks around the world have injected more than $200B in the financial system. Here are the figures:

And here are some facts about yesterday’s (9.15.08) price action:
USD/JPY - Biggest one day drop in 9 years
S&P500 - Biggest one day percentage drop since 9/11
30 Yr Treasuries fall to lowest level [...]

Posted in ECB, Fed Rate Cut, Fed Rate Cut Expectations, Fed fund futures usdjpy, Federal Reserve, forex blog, liquidity injection 1 Comment »

On Friday, the Dow hitting 10,000 still seemed to be a remote possibility, but today, that is starting to become a reality. We have warned on near daily basis about the danger of carry trades. Although the EUR/USD’s reaction to the systemic risk in the financial markets was not as clear, there was a clearly [...]

Posted in Bloomberg, Dow, FOMC, Fed Rate Cut, Fed Rate Cut Expectations, Fed fund futures usdjpy, Federal Reserve, Forex News, Lehman Brothers, Lehman Layoffs, US Dollar, US Economy, US Treasuries, bank safe, forex blog 2 Comments »

For currency traders, the most interesting article in today’s Wall Street Journal is the one about volatility in the financial markets causing trading relationships to be in flux.
This article examines some of the correlations that we talk about regularly, between USD/JPY and stocks or the EUR/USD and oil. The premise of this article [...]

Posted in Fed fund futures usdjpy, eur/usd, forex correlations, fx correlations, usd/jpy No Comments »