Yen rises 11% against the Aussie

August 4, 2024 Leave a comment

The only thing you are forced to decide is to choose a #currency.

This is applicable when making, settling or holding an investment.

Holding cash is also an investment and many of the ‘truly’ global investors also ponder which (mix of) currency to hold their cash in.

Recently, I have highlighting the extreme weakness at which the #Japanese Yen has been trading at and more specifically, the Australian Dollar’s strength again the Yen (which is a good indicator of investors risk appetite).

Prompts to buy the Yen appeared in my weekly macro extremes publication and in this recent “Bigger Calls” newsletter.

https://mailchi.mp/karriasset/the-bigger-calls-q3-2024

If I chose the worst entry point (over the past 5-7 weeks) to have bought #Yen and sold #AUD, the current return would resemble at least 8% over the past 3 weeks or perhaps 11% if your timing was impeccable.

I think that is a bit more than interest earned in an Australian term deposit?

As a standalone #FX trade with the AUD/JPY trading at 95.40, it is now in the category of “good enough”.

August 4, 2024

by Rob Zdravevski

rob@karriasset.com.au

Screenshot

Filed under Finance & Investment Tagged with , , , , , , ,

The Loonie, inflation and commodity prices

July 27, 2024 Leave a comment

The Canadian Dollar will appear in some ‘extreme’ categories in tomorrows edition of Macro Extremes.

The study below shows the CAD/USD dancing with the Bloomberg Commodity Index and the Canadian Inflation Rate.

Incidentally, that Canadian inflation rate has eased from 8% to its current 2.7%.

July 27, 2024

by Rob Zdravevski

rob@karriasset.com.au

Screenshot

Filed under Finance & Investment Tagged with , , , , , , ,

Update: Monthly U.S. Dollar Overbought

September 27, 2022 Leave a comment

This chart updates the percentage which the DXY Index is trading above its 200 Month moving average.

Rare air indeed !

This may be the 7th inning, 8th or 9th….but it’s not the top of the 1st.

Incidentally, We are days away from closing the quarter and U.S. corporate earnings will be reported soon after. A reminder to look for management commentary in their earnings call about the effect the strong U.S. Dollar is having on their results.

The strong dollar is something the United States needs to be wary of because prolonged strength is adding to the probability of sustained inflation.

Commercial and military aircraft are costing the rest of the world let alone other U.S. goods and services.

More importantly, the majority of the major commodities are priced and traded in U.S. Dollars.

Rather than the Bank of Japan intervene and spend $21 billion (which is slightly more than the $15bn in U.S. aid sent to Ukraine) to buy and support their Yen…..

and rather than wait for the U.K. government or the Bank of England to crank up rescue packages to support the British Pound…

perhaps the U.S. Treasury (Janet Yellen) should start making announcements designed to weaken their currency?

Such action may possibly help your ‘friends’ in the G-10; help your own bond market (your cost of capital) and make the world a better place.

Keep in mind that a U.S. 10 year bond yielding 3.85% in isolation isn’t a concern until you ponder that the bonds of other nations are seemingly trading a ‘better creditworthiness’ of 3%.

But then again, the market may end up fixing it all for you.

September 27, 2022

by Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , ,

Another way to look at USD strength

September 27, 2022 Leave a comment

The Bearish USD ETF is exhibiting extremes including being at the higher quintile of historical percentages which it’s trading below its 200 week moving average.

Anecdotally, all I am hearing is about U.S. Dollar strength. Now (the financial media) are calling referring to it as “King Dollar”.

Remember when 2 years ago, they were calling the demise of the U.S. Dollar?

September 27. 2022

by Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , ,

Currency Trade Ideas

November 25, 2021 Leave a comment

This week and today, we are also seeing an extreme in the U.S. Dollar (DXY) Index and as a result certain currencies are exhibiting notable weakness, which I think translate into an attractive buying opportunity.

My three strategic currency ideas are;

Sell USD and Buy EUR (current price is 1.1210)
– Once the Euro’s have been bought, I’m waiting for some specific stocks prices. Some on my list include SAP and ArcelorMittal.

Sell USD and Buy JPY (current price is 115.40)
– there are some Japanese equities on my buying list.

Sell USD and Buy SEK (currently 9.1130)
– Swedish equities have already rallied and benefitted from a weaker currency. The likes of Sandvik, Atlas Copco, Swedbank and Assa Abloy. The laggard is airline, SAS. This strategy is more applicable for those need to Buy Krona for corporate and business purposes.

The GBP (versus the USD) isn’t quite there. 1.3260 could be the place to buy Sterling.

November 25, 2021
by Rob Zdravevski
rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , , ,