I've been in and out over the last two days and scalped a few hundred bucks, being long here and there, for a few hours. I'm new to the AUD/US futures contract and don't have electronic access to options on this one, so I can't hedge a long-only position, which I do unless I am of very firm commitment and markets appear to be in extremis. I'm also -- here is the Yank in me, mates -- hesitant to bet mid-term against the dollar, despite all the fundamental reasons; I'll leave the technical to you. I have -- go ahead and laugh -- that typically American dismay that the US dollar has diminished so around the world. I can recall working with some Aussies in 2000/2001, and they couldn't afford to do an offsite in the U.S. because the AUD was at like .38 or something; this was back when countries were demonitizing gold @ @260 an oz. or something. So, bottom line guys, I'm happy to take some Christmas present money here and there, and if the AUD gets much above 80 I may take a medium-term short position. Once I get over to Sydney and get into the flow a bit more on the currency, the news, etc. I may do more. The lack of electronically traded options on futures for the AUD/US is a deterrent for me, though. Much prefer the EUR/US and Cable. Meantime, thanks for the iPods and Merry Chrissy. NR
I appreciate the risk of an Aussie play: the door for speculators is much smaller for it than for the majors, hence a greater likelihood and fear it may crowd more quickly. You could suffer or benefit from a startling move at any time.
Hence the need for options on futures. I use Interactive Brokers, which is about as good as a retail product as you can get. But there are no exchange-traded (eletronically) options on AUD/US futures that I am aware of, at least for US investors. I can RFQ, but I'm going to get a lousy price; I'm not sure if this is because of liquidity or brokers being brokers. Maybe with all the merging of exchanges and going electronic this will change in the not-too-distant future.
Dang if those fellas at Bloomberg's aren't dead on. Here's today's post mortem on BOJ's announcement Tuesday: Dec. 20 (Bloomberg) -- The yen dropped to lowest in more than a month against the dollar and touched a record low versus the euro as speculation waned that the Bank of Japan will boost borrowing costs next quarter. The yen also hit a nine-year low against the Australian dollar and earlier dropped against the British pound to the weakest since 1998. Traders cut bets on a rate increase after the Japanese central bank kept its benchmark rate unchanged at 0.25 percent and suggested weakness in the economy yesterday. ``The BOJ is a lot more dovish,'' said Brian Taylor, chief currency trader at Manufacturers & Traders Trust in Buffalo, New York. ``People are borrowing yen to buy other higher-yielding currencies. The yen definitely got hit.''
Nice early volume in Aussie this session. Unexpected, I'd say, given the holiday. Bargain hunters maybe?
Anybody else following AUS from the long side and, if so, do you have predictions for price action next week? Most especially, any clues about what to expect volatility wise?