I would not trust any type of "system" right now... Fearful scalping with utmost attention to stalling and booking profits is how I would trade - anything else seems madness - especially on something like the EURJPY where you easily can get wiped out overnight if not stops are pretty tight. Europe is now down more than 8%... and Asia was down around 10%. However, who knows - maybe the US will end the week on a "positive footing," it wouldn't surprise me the least - as "anything goes" right now. Bank of England's deputy governor Charles Bean is saying this can possibly be the worst financial crisis in human history... :eek:
Remember the "chicken row" in Russia? Russia is the world's largest importer of US poultry products (20% of all US poultry exports back in 2002) and in 2002 they banned US poultry, then lifted the ban in 2003. Then in 2008, they banned 18 of the imports into Russia - after the Georgia war, and Russia had accused the US of having played a role in the instigation of the war - where after the US quickly got an agreement with Poland on missile defence and achieved some other geopolitical goals. Now - the US is putting sanctions on Russian companies - accusing them of aiding Iranian nuclear ambitions - as well as some Chinese companies. Brazil is one of the largest exporters of poultry as well, and have a huge market in Asia and the Middle East. Well, it looks like a messy time for currencies and economies - as well as more aggravation coming along. It seems like the gloves are coming off many places right now, and the US can probably expect some tough talks when the G20 convenes. One of these - are talks of the "new Bretton Woods" and "getting rid of the current role of the USD" (China). Pretty big stuff going on...
It seems like the Japanese "verbal intervention" rhetoric is working a little - but will it be enough to hold up against the equities in 50 minutes? Traders will certainly be extremely aware of the unravelling that has happened - and the mechanics providing this - NOT fundamental economic news. That does mean that there is a strong reasoning for a good rebound and bounce. The problem is knowing when panic resides, and opportunities outweigh the downward risk...
I'm not catching all the news - are you saying that there are talks going on right now where China is openly proposing an alternative reserve currency? Last I heard, that rhetoric was coming from people associated with Chinese gov, but not directly from officials.
An interesting roundtable discussion yesterday on the BBC about the role of the USD: http://news.bbc.co.uk/2/hi/business/7684397.stm http://news.bbc.co.uk/nol/shared/spl/hi/programmes/analysis/transcripts/23_10_08.txt http://www.reuters.com/article/ousiv/idUSPEK4365020080917?sp=true http://www.lehman.com.cn/en/resources/news_view.asp?id=551 Gordon Brown was the one calling for "new Bretton Woods": http://www.telegraph.co.uk/finance/...Gordon-Brown-calls-for-new-Bretton-Woods.html http://news.bbc.co.uk/2/hi/uk_news/politics/7666695.stm New "financial world order" - Brown, Sarkozy, Barroso: http://news.bbc.co.uk/2/hi/business/7678577.stm http://news.bbc.co.uk/2/hi/europe/7672903.stm China will support the EU calls for reform and the proposals from Merkel - ASEM meeting: http://www.dw-world.de/dw/article/0,2144,3736808,00.html China has a lot of US debt - and their currency was linked to the USD - now within "a trading bond." Over time, the USD will become less important for China - as US consumption invariably will be declining. The Chinese government supports the strong USD for now, but they also support the need for reforms - and in Europe, there is the realisation that the Chinese currency will play an important role in the future. Those talking about an end to the USD role, are mostly commentators for now - but every government hit by the financial crisis are talking about how "foreign investors" and foreign influences should not be the defining factor to financial stability - e.g Japan, China, Brazil, the EU etc. At the ASEM, the EU also called for unity in handling the crisis - instead of increasing protectionism. In short - the commentators are more blunt - but the seed and core is there in the government rhetoric for an end to USD dominance.
Propaganda wars are now raging... Europe reports China support for tougher financial regulation calls from Europe, Chinese news reports good collaboration talks and support for common policies... CNN on the other hand - reports "chills between Europe and China" over the human rights award and suppress the outcome of the ASEM talks. It's part of "the diplomatic game" - but also brainwashes and polarizes people further - not very useful in the current situation. http://english.people.com.cn/90001/90776/90883/6521083.html http://english.people.com.cn/90001/90776/90883/6521073.html http://english.people.com.cn/90001/90776/90883/6521079.html Not to mention the surge of neo-conservatives being passed as "mainstream social conservatives" on CNN shows.