alright …
can someone explain to me why carry trade pairs are going the opposite way?
i read something like the economies for the US, CAD are unstable…but what about AUD/JPY…
thanks
danny
I presume you are long the AUD/JPY.
The currency markets ain’t just about one currency pair, even though
noobs are recommended to concentrate on trading one pair, this does
not mean to the exclusivity of all other pairs where fundamental &
technical analysis is concerned.
Take a look at USD/JPY & AUD/USD, as well as AUD/JPY.
It doesn’t hurt either to look at all the other major JPY cross pairs as
well.
Yen Firm on Risk Aversion, Will US CPI Affirm Intermeeting Cut?
The Japanese yen remains the dominant driver in the FX markets today following sharp decline in Asian stock markets. As pointed out before, following yesterday’s dismal retail sales and sharp fall in stock markets, speculations continue to fly around on firstly, whether Fed will opt for an aggressive 75bps cut on Jan 30; secondly whether Fed will have an emergency intermeeting cut this week. Though, markets generally believe that even in case of an intermeeting cut, Fed will likely wait for today’s Dec CPI report first before making the decision.
The economic calendar is busy today. From Eurozone, Dec HICP final will be release and is expected to be revised higher to 3.2% yoy. From UK, job report is expected to show unemployment rate staying at 5.3% in Nov, but wage growth slowed from 4.0% yoy to 3.9%.
From US, headline CPI is expected to slow from 4.3% yoy to 4.1% yoy but core CPI is expected to climb from 2.3% yoy to 2.4% yoy in Dec. TIC capital flow is expected to be at 70b, down from prior 114b. Industrial production is expected to drop -0.1% in Dec with capacity utilization down from 81.5% to 81.3%. NAHB housing market index is expected to remain unchanged at 19 in Jan. Fed will also release the Beige book. Also, markets will pay equally close attention to more earnings report from JP Morgan on more information on the damage of the credit crisis, respective impact on stock markets and yen carry trade unwinding.
Technically speaking, intermarket relationship between yen and stock markets will likely continue to dominate. And USD/JPY remains the clearly bearish pair to sell on bearish dollar news among the majors.
Also this thread.
and possibly the whole forum.
http://forums.babypips.com/analyst-arena/
Also re-read the answers to your other question.
http://forums.babypips.com/newbie-island/9911-question-about-aud-jpy.html