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usd/jpy Fed Rate Cuts
- Thread starter nealvan
- Start date
Quote from 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..
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.
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.Quote from 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.
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.
What I do is watch the usd/jpy but instead work the gby/jpy because there is better moves it seems.Quote from 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
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...
<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...
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.
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.