usd/jpy Fed Rate Cuts

Discussion in 'Forex Trading' started by nealvan, Jan 18, 2008.

  1. nealvan

    nealvan

    Does anyone think the USD can fall any lower than it is and break through recent lows? With the Fed cutting won't this mean the dollar will surely go lower against the Yen which is in a neutral mode..
     
  2. DrEvil

    DrEvil

    I feel that a fed cut of 0.25 is already priced into the dollar. If the fed don't cut then no doubt the dollar will take off.
     
  3. nealvan

    nealvan

    I've heard that the sentiment on the street is closer to a .50 basis cut. Like you said the .25 is priced in but a .50 basis cut seems to be expected. Crazy talk about .75 basis was being considered. The other question is how many times will they cut. Personally I think there's more than one cut coming. It should send the dollar much lower is my guess but who could say for sure until that day.
     
  4. nealvan

    nealvan

    I'd also like to discuss the pound. I trade the pound/yen cross from time-to-time. I'm thinking that the pound is going to come down hard. Especially if the Euro is going to raise rates again while the UK cuts. Should this happen the pound is going to come down hard. It's already showing strong weakness. The Yen has no where to go but up in my opinion.
     
  5. Shagi

    Shagi

    The carry trade is unwinding - the yen is going only one direction thats up - look at the euro/jpy which looks like a Dow chart & gbp/jpy has almost 100% negative correlation to usd/jpy
     
  6. Shagi

    Shagi

    oooh - i forgot all the jpy cross rates have topped out - aud/jpy, eur/jpy, chf/jpy, gbp/jpy, cad/jpy - there is no chance for the dollar against jpy - so dow/s&p gonna lose weight big time - no matter what fed does
     
  7. nealvan

    nealvan

    What I do is watch the usd/jpy but instead work the gby/jpy because there is better moves it seems.
     
  8. nealvan

    nealvan

    It just seems to me that Bernanke has abandoned the dollar and he has made it quite clear that he will keep cutting and cutting.

    <img src="http://bespokeinvest.typepad.com/bespoke/images/2007/09/18/fedfundsrate.png">
    This was the best historical chart I could find I'll try to post another...
     
  9. nealvan

    nealvan

    <img src="http://www.marketoracle.co.uk/images/2008/UK_interest_rates_Jan08.gif">
     
  10. nealvan

    nealvan

    http://www.marketwatch.com/news/sto...x?guid={E79667BF-2F2F-4782-A8B7-F9CDD5A3DADF}

    Recent weakness in sterling, which has fallen back below the key $2 level, could also add to inflation worries by increasing import prices.
    David Kern, economic adviser to the British Chambers of Commerce, said the decision was disappointing and urged a rate cut in February to reinforce confidence and limit damage to the economy.
    "Sterling's recent weakness poses inflationary risks, but delaying unduly a modest and much-needed interest rate cut could worsen the downturn in the economy, triggering bigger and more dangerous falls in the pound," Kern said.
     
    #10     Jan 19, 2008