Johanes

JLS: JPY and CHF Carry Traders Out of the Market -Deep Drop

FX:USDJPY   U.S. Dollar / Japanese Yen
JPY exits from carrying and CHF already exit. USD stronger than ever. I have to adjust all my trades.

Short all JPY-pegged pairs
Short all CHF-pegged pairs
Short all USD-pegged pairs (except USDCAD long)
Mar 06
Comment: Short JPY-pegged pairs:
Short USDJPY, CADJPY, NZDJPY, AUDJPY, GBPJPY, EURJPY, CHFJPY

Short CHF-pegged pairs:
Short USDCHF, CADCHF, NZDCHF, AUDCHF, GBPCHF, EURCHF

Short USD-pegged pairs:
Short NZDUSD, AUDUSD, GBPUSD, EURUSD, excluding USDCAD long

Most controversies, while EURUSD to downward
Long EUR-pegged pairs:
Long EURCAD, EURNZD, EURAUD, EURGBP.

Read the Triad Monetary System Structure of the IMF/BIS
Mar 07
Comment: Collective asset disposals (unwinding) made by the JPY and the CHF carry traders by the timing the USD is stengthened to other major pairs may result the major and derivative pairs prices to chrushes.

This is one of the issue researched and analyzed by the CEPR - Center for Economic Policy Research on "carry trading and currency crushes" to advocate the IMF/BIS and the OECD as well as central banks.

CEPR (http://www.cepr.org)
Mar 07
Mar 07
Mar 07
Mar 07
Comment: The Federal Reserve Bank of New York, the executing agency of the Federal Reserve, consistently manage and maintain the medium term and the short term exchange rate target zone in the market. The carry trading activities by the carry traders are "restricted and limited" interior the medium term and short term exchange rate target zones to maintain the global economic and price stability.

Target zones however are allowed to align and re-align and continuously re-align to downward or to upward by the changes of interest rate differential structures and matching the economic and financial stability trend.

The Fed's 2018 report however indicated that misalignment advocated by the IMF/BIS for selected major and emerging market currencies and the US Treasury indicated over pricing/under pricing from emerging market currencies. Overall, no large issues were reported with minor adjustment recommended.
Mar 07
Comment: USDCHF Price Performance Analysis and Re-carrying Outlook

The original estimated target zone for USDCHF is 0.9700-1.0200-1.0700. After pressured down to 0.9925, the pair resumes to move to upward to above 1.0100, and should the USDCHF visit the 1.0200 then CHF carry traders will be re-entering the market to carry CAD, NZD, AUD, GBP and EUR.

At such, the CADCHF, NZDCHF, AUDCHF, GBPCHF and EURCHF will be rally to upward to her equivalent rate to USDCHF at 1.0700. This carry trading and re-carry trading could be confirmed if and when the USDJPY not to break 109.50 and the JPY carry traders also resume to re-carrying the CAD, NZD, AUD, GBP and EUR by pushing the CADJPY, NZDJPY, AUDJPY, GBPJPY and EURJPY to equivalent rate of USDJPY at 117.00.

The current movements however the USDCAD to upward, NZDUSD, AUDUSD, GBPUSD, EURUSD to downward in parallel to CADJPY, NZDJPY, AUDJPY, GBPJPY, EURJPY and USDJPY.
Johanes could you elaborate on why you're saying to short all usd pairs while also stating that asd is stronger than ever? I am very confused..
Reply
raovida raovida
@raovida, Johanes could you elaborate on why you're saying to short all usd pairs while also stating that USD is stronger than ever? I am very confused..
Reply
Johanes raovida
@raovida, Short JPY-pegged pairs:
Short USDJPY, CADJPY, NZDJPY, AUDJPY, GBPJPY, EURJPY, CHFJPY

Short CHF-pegged pairs:
Short USDCHF, CADCHF, NZDCHF, AUDCHF, GBPCHF, EURCHF

Short USD-pegged pairs:
Short NZDUSD, AUDUSD, GBPUSD, EURUSD, excluding USDCAD long

Most controversies, while EURUSD to downward
Long EUR-pegged pairs:
Long EURCAD, EURNZD, EURAUD, EURGBP.

Read the Triad Monetary System Structure of the IMF/BIS
Reply
raovida Johanes
@Johanes, Just read it, this makes a lot more sense now, thanks for the response :)
Reply
Johanes raovida
@raovida, Short JPY-pegged pairs:
Short USDJPY, CADJPY, NZDJPY, AUDJPY, GBPJPY, EURJPY, CHFJPY

Short CHF-pegged pairs:
Short USDCHF, CADCHF, NZDCHF, AUDCHF, GBPCHF, EURCHF

Short USD-pegged pairs:
Short NZDUSD, AUDUSD, GBPUSD, EURUSD, excluding USDCAD long

Most controversies, while EURUSD to downward
Long EUR-pegged pairs:
Long EURCAD, EURNZD, EURAUD, EURGBP.

Read the Triad Monetary System Structure of the IMF/BIS
Reply
the result for usdchf is also unclear
Reply
Johanes lapin_eliott
@lapin_eliott, Short JPY-pegged pairs:
Short USDJPY, CADJPY, NZDJPY, AUDJPY, GBPJPY, EURJPY, CHFJPY

Short CHF-pegged pairs:
Short USDCHF, CADCHF, NZDCHF, AUDCHF, GBPCHF, EURCHF

Short USD-pegged pairs:
Short NZDUSD, AUDUSD, GBPUSD, EURUSD, excluding USDCAD long

Most controversies, while EURUSD to downward
Long EUR-pegged pairs:
Long EURCAD, EURNZD, EURAUD, EURGBP.

Read the Triad Monetary System Structure of the IMF/BIS
Reply
short all jpy pegged pairs (means short usdjpy) and short all usd pegged pairs (means short jpyusd, means long usdjpy) does not give an answer on what to do for usdjpy
Reply
Johanes lapin_eliott
@lapin_eliott, Short JPY-pegged pairs:
Short USDJPY, CADJPY, NZDJPY, AUDJPY, GBPJPY, EURJPY, CHFJPY

Short CHF-pegged pairs:
Short USDCHF, CADCHF, NZDCHF, AUDCHF, GBPCHF, EURCHF

Short USD-pegged pairs:
Short NZDUSD, AUDUSD, GBPUSD, EURUSD, excluding USDCAD long

Most controversies, while EURUSD to downward
Long EUR-pegged pairs:
Long EURCAD, EURNZD, EURAUD, EURGBP.

Read the Triad Monetary System Structure of the IMF/BIS
Reply
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