It has been 2 months I didn't write any blog. I am preparing Hedge Fund business proposal to some of the 'big boys'. Now, the terms of Currency (FX) Market is different. You might heard GDP, NFP, Carry Trade in FX Market, but now the new terms are controlling the speculators mind; QE, 'Currency War', China and more.
Bare that in mind, China has the biggest USD reserve in the world. So any speculators want to 'attack' RMB or Yuan, it is not as easy attacking RM, Bath, Won or other developing countries currency.
Strange but true, every 'advanced economic' want their currency devalue, yes... this is how China can experience the GDP growth for the last 2 decades. The simple term is 'Export'! If you have a weak currency compare to other, relatively your export become cheaper and demand will increase. The so-called 'imbalance of global economy' is all about the 'value' of the currency of each country.
USA! The powerhouse of 'printing money' will bully other by pushing down their own currency to 'balance' their economic, and buying theirs own bonds via the unofficial world bank, Fed Reserved. All the major pairs will become stronger then USD. China being the only country that will keep their currency 'slowly appreciate' against USD. China have their very strong views which I totally agreed. If RMB is appreciate too fast, the China economy will be in turmoil, it will cause the society imbalance and thus affect the world economy.
Sunday, October 10, 2010
Wednesday, August 18, 2010
Fundamental Views - USD/JPY
The articles from WSJ which I strongly agree. Fyi, I hold big position in the pair of JPY.
Time for Japan to Get Tough
By Katie Martin
It’s time for Japan to stop playing Mr Nice Guy.
The country has been holding back from currency intervention for months, but the case for action is becoming overwhelming.
After all, why not intervene? The yen is clearly far too strong. It hit a 15-year peak against the dollar last week and remains elevated on a trade-weighted basis, or simply by comparison with other regional heavyweights like the yuan or the won.
And this is clearly hurting. Just take a look at the gross domestic product data released earlier Monday. Japan’s economy grew by a seriously floppy 0.1% in the second quarter of this year. Economists had predicted a rise of 0.6%. Wobbly exports are a big reason for this weakness, and the strong yen has to take part of the blame as it makes Japanese products more expensive abroad.
What’s more, the rise in the currency is completely out of whack with economic fundamentals. Japan has a massive debt burden, no growth, interest rates at zero, a deflation problem, grim demographics… you name it.
Traders have been buying the yen but not because they are positive about Japan’s prospects. No, it’s largely down to its role as a perceived safe haven, and even that makes no sense. The yen is not safe. It just tends to climb when markets get the heebeejeebies, because Japanese accounts are traditionally enthusiastic investors in overseas assets. When they get frightened, they sell up, buying yen in the process. Other traders, rationally enough, piggyback on this to make a nice little return. That doesn’t make the yen safe, it makes it a bet on safety.
So, here we have a currency that has snapped its link with reality and is causing damage to its economy. That’s reason enough for other countries to stop the rot. Why haven’t the Japanese authorities acted already, either by selling yen or by easing monetary policy further?
Some reasons make sense. One is that, at the moment, monetary policy is not in further easing mode. Intervention rarely works unless it’s in synch with the path of interest rates.
Another is that, while the yen’s climb has grim repercussions, it is not, in itself, disorderly. It’s not yet rising at the sort of pace which clearly calls for an official hand to slow it down.
The last main obstacle, though, is widely seen as the most significant, and it is also arguably the weakest: it lacks international support. Japan does not appear to have the go-ahead for a zap on the yen and, as a good global citizen fully signed up to the international mantra of freely-floating exchange rates, it appears to feel obliged to let the market do its work, for good or ill.
By Katie Martin
It’s time for Japan to stop playing Mr Nice Guy.
The country has been holding back from currency intervention for months, but the case for action is becoming overwhelming.
After all, why not intervene? The yen is clearly far too strong. It hit a 15-year peak against the dollar last week and remains elevated on a trade-weighted basis, or simply by comparison with other regional heavyweights like the yuan or the won.
And this is clearly hurting. Just take a look at the gross domestic product data released earlier Monday. Japan’s economy grew by a seriously floppy 0.1% in the second quarter of this year. Economists had predicted a rise of 0.6%. Wobbly exports are a big reason for this weakness, and the strong yen has to take part of the blame as it makes Japanese products more expensive abroad.
What’s more, the rise in the currency is completely out of whack with economic fundamentals. Japan has a massive debt burden, no growth, interest rates at zero, a deflation problem, grim demographics… you name it.
Traders have been buying the yen but not because they are positive about Japan’s prospects. No, it’s largely down to its role as a perceived safe haven, and even that makes no sense. The yen is not safe. It just tends to climb when markets get the heebeejeebies, because Japanese accounts are traditionally enthusiastic investors in overseas assets. When they get frightened, they sell up, buying yen in the process. Other traders, rationally enough, piggyback on this to make a nice little return. That doesn’t make the yen safe, it makes it a bet on safety.
So, here we have a currency that has snapped its link with reality and is causing damage to its economy. That’s reason enough for other countries to stop the rot. Why haven’t the Japanese authorities acted already, either by selling yen or by easing monetary policy further?
Some reasons make sense. One is that, at the moment, monetary policy is not in further easing mode. Intervention rarely works unless it’s in synch with the path of interest rates.
Another is that, while the yen’s climb has grim repercussions, it is not, in itself, disorderly. It’s not yet rising at the sort of pace which clearly calls for an official hand to slow it down.
The last main obstacle, though, is widely seen as the most significant, and it is also arguably the weakest: it lacks international support. Japan does not appear to have the go-ahead for a zap on the yen and, as a good global citizen fully signed up to the international mantra of freely-floating exchange rates, it appears to feel obliged to let the market do its work, for good or ill.
Friday, July 30, 2010
Amateur Vs Professional Investors
Last night during one of our casual meeting, I was asked by one of the amateur Forex Player where would the Euro heading to? My answer to him.." Goldman Sachs (GS) said it will reach 1.35 but they have revised it twice the projection since early this year. If I tell you it will reach 1.35 but Mr. Market turn other way round, you will curse me. if I am right, you may not remember me."
Professional traders will never ever ask this kind of questions. Regardless where the market move, we look for right time to strike. One of my team mate always related trading forex to sports. I agree his point of views." Lin Dan is a world class badminton player, he know when is the time to smash, drop short, long ball etc in the tournament, but sometimes he make mistakes too." This apply to all the sportsmen. Trading Forex apply the same concept, even you are the best trader, once a while market will not syn with your mind.
Many amateur players think they learn some technical analysis skills and try to play professionally. My advise to them." If you think trading is so easy, anyone can become millionaires by reading this type of books. Ironically, most legendary traders like Mr. Soros and Jim Rogers don't even know how to read chart but they can 'create' the future chart pattern. I hope all the amateur players get my points here.
Professional traders will never ever ask this kind of questions. Regardless where the market move, we look for right time to strike. One of my team mate always related trading forex to sports. I agree his point of views." Lin Dan is a world class badminton player, he know when is the time to smash, drop short, long ball etc in the tournament, but sometimes he make mistakes too." This apply to all the sportsmen. Trading Forex apply the same concept, even you are the best trader, once a while market will not syn with your mind.
Many amateur players think they learn some technical analysis skills and try to play professionally. My advise to them." If you think trading is so easy, anyone can become millionaires by reading this type of books. Ironically, most legendary traders like Mr. Soros and Jim Rogers don't even know how to read chart but they can 'create' the future chart pattern. I hope all the amateur players get my points here.
Monday, July 26, 2010
A Flaw Market.
If you are a Forex Trader and rely on economic news, you will find the whole market is a flaw deception. Some gurus and data will tell you certain currency will go up or down, the data really make sense for you to follow their thoughts.
Once you are confirmed the so called fundamental point of views. You enter the trade and the market start go against you. Huh? Sound familiar for those who follow the fundamental.
I agree with one of the gurus view that currency basically is a flaw deception. Trader and Speculators who are experienced would not follow the news instead have their own thoughts. In many ways, Forex trade 24 hours and almost 7 days, millions of participants with different motives buy and sell the pairs of currency. Some of them are pure model fund, other may be speculation or for hedging purpose. The so called intrinsic value of the currency always depend on the political and economic situation. When Europe hit by sovereign debts, people start selling Euro and buy USD. Once consider as save haven of currency players is no more safe when the news start pop out the double dips possibility in US. The different perception created by big boys will change the market sentiment and the direction of the currency.
I strongly agree the points of view below;
Bloomberg 27 July 2010:
“Foreign exchange is the world’s biggest fruit and vegetable store, with millions of people playing it 24 hours a day,” Goldman Sachs Chief Global Economist Jim O’Neill said on July 21 in a radio interview with Tom Keene on Bloomberg Surveillance. “Anybody who thinks they can get foreign exchange right all the time should be in a lunatic asylum.”
Once you are confirmed the so called fundamental point of views. You enter the trade and the market start go against you. Huh? Sound familiar for those who follow the fundamental.
I agree with one of the gurus view that currency basically is a flaw deception. Trader and Speculators who are experienced would not follow the news instead have their own thoughts. In many ways, Forex trade 24 hours and almost 7 days, millions of participants with different motives buy and sell the pairs of currency. Some of them are pure model fund, other may be speculation or for hedging purpose. The so called intrinsic value of the currency always depend on the political and economic situation. When Europe hit by sovereign debts, people start selling Euro and buy USD. Once consider as save haven of currency players is no more safe when the news start pop out the double dips possibility in US. The different perception created by big boys will change the market sentiment and the direction of the currency.
I strongly agree the points of view below;
Bloomberg 27 July 2010:
“Foreign exchange is the world’s biggest fruit and vegetable store, with millions of people playing it 24 hours a day,” Goldman Sachs Chief Global Economist Jim O’Neill said on July 21 in a radio interview with Tom Keene on Bloomberg Surveillance. “Anybody who thinks they can get foreign exchange right all the time should be in a lunatic asylum.”
Thursday, June 24, 2010
Everyone like fiat currencies...
In the midst of world cup, my favorite team Argentina is doing very well... Today the fiat currency /money conquer the financial world. The strongest nation will define the rules of money works.
From wikipedia:
From wikipedia:
The term fiat money is used to mean:
- any money declared by a government to be legal tender.[1]
- state-issued money which is neither legally convertible to any other thing, nor fixed in value in terms of any objective standard.[2]
- money without intrinsic value.[3]
The term derives from the Latin fiat, meaning "let it be done", as the money is established by government decree. Where fiat money is used as currency, the term fiat currency is used. Today, most national currencies are fiat currencies, including the US dollar, the euro, and all other reserve currencies, and have been since the Nixon Shock of 1971.
China is the last victim fall under the U.S. 'trick' to accept the US fiat money/bonds. Once again, do you care money without intrinsic value that rules the financial world? I think everyone love to see millions of USD even it is only paper that declared by USA government to be legal tender. The fiat currency also provide a playing ground for people to play with it which has created the world largest transaction financial market: FOREX Market.
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