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Iceland Kronur carry trade

  • #1
  • First Post: Mar 25, 2008 11:08pm Mar 25, 2008 11:08pm
March 25, 2008, emergency rate change 1,25 points up... to 15% in Iceland.
They are having big inflation issues.
Anyone has experience with Iceland Kronur (ISK) - Yen (JPY) carry trades? Could be interesting. or not? What do you think ?
  • #2
  • Mar 25, 2008 11:52pm Mar 25, 2008 11:52pm
Sure if you can handle the 1500 pip intraday swings, go for it.

http://i31.tinypic.com/rjjl9c.png
  • #3
  • Mar 26, 2008 6:43am Mar 26, 2008 6:43am
heheh yeah... something to not be bored finally...
  • #4
  • Mar 26, 2008 6:48am Mar 26, 2008 6:48am
dont touch it, if u use sl, and be aware trading is only from 09.30-16.30!!!!, if carries are hit overnight, u can get hammered....BIG...
its just money
  • #5
  • Nov 9, 2008 4:51am Nov 9, 2008 4:51am
see what happened finally with Iceland Krona....since march when I posted that
wow...
I don't know if this could be restored easily
but I think they are trying to do something
look at the chart... I've never seen a chart like this

http://www.ecb.int/stats/exchange/eu...ph-isk.en.html
  • #6
  • Nov 29, 2008 10:23am Nov 29, 2008 10:23am
Quoting emda
see what happened finally with Iceland Krona....since march when I posted that
wow...
I don't know if this could be restored easily
but I think they are trying to do something
look at the chart... I've never seen a chart like this

http://www.ecb.int/stats/exchange/eu...ph-isk.en.html

wow unstoppable... eating again that chart...
Attached Image (click to enlarge)
Click to Enlarge Name: 29-11-2008 17-21-33.png Size: 23 KB
  • #7
  • Dec 12, 2008 6:22am Dec 12, 2008 6:22am
I've read that Iceland want to join the euro soon in 2009

UK also sees a possibility to join euro... but no details.
  • #8
  • Feb 2, 2009 1:02pm Feb 2, 2009 1:02pm
TraderKGB I was looking at some possible longer term carry trade scenarios, and thanks for warning me of the risk involved!

The Iceland Kronur Carry trade ;-)
does the currency still trade ?
  • #9
  • Feb 2, 2009 1:08pm Feb 2, 2009 1:08pm
Quoting privatansasa
TraderKGB I was looking at some possible longer term carry trade scenarios, and thanks for warning me of the risk involved!

The Iceland Kronur Carry trade ;-)
does the currency still trade ?
http://letmegooglethatforyou.com/?q=Iceland+Krona+rate
  • #10
  • Feb 2, 2009 1:22pm Feb 2, 2009 1:22pm
No matter one's stance on the IMH, it rare for any asset class to sport a double digit rate of return without bringing with it significant risk. That risk can take many forms: currency risk, liquidity risk (the big one), etc. Bur regardless of the form risk takes, it is there and ever present.

In short: If a given asset class is high yielding, there is probably a reason.

High interest rates are the only way for some CBs (Turkey, South America) to attract foreign capital, while at the same time offsetting political risk. In addition higher interest rates make for a slower economy which also figures into the risk taken.

Trader KGB, don't be a stranger!
  • #11
  • Feb 2, 2009 1:23pm Feb 2, 2009 1:23pm
In October 2008, the effects of the 2007/08 global financial crisis brought about a collapse of the Icelandic banking sector. The value of the króna plummeted, and on 7 October 2008 the Icelandic Central Bank attempted to peg the króna at 131 against the euro. This peg was abandoned the next day.

 The króna later fell to 340 against the euro before trade in the currency was suspended (by comparison, the rate at the start of 2008 was about 90 krónur to the euro). After a period of tentative, very low-volume international trading in the króna, activity had been expected to pick up again throughout November 2008, albeit still with low liquidity, as Iceland secured an IMF loan. However as of January 2009 the krona was still not being traded regularily, with the ECB reference rate being set only intermittendedly, the last time on December 3, 2008 at 290 ISK per euro.

One senior Icelandic official has stated that due to the crisis

"the krona is dead. We need a new currency. The only serious option is the euro."

Glad I didn't take that carry!
  • #12
  • Feb 2, 2009 1:34pm Feb 2, 2009 1:34pm
Quoting privatansasa
In October 2008, the effects of the 2007/08 global financial crisis brought about a collapse of the Icelandic banking sector. The value of the króna plummeted, and on 7 October 2008 the Icelandic Central Bank attempted to peg the króna at 131 against the euro. This peg was abandoned the next day.

The króna later fell to 340 against the euro before trade in the currency was suspended (by comparison, the rate at the start of 2008 was about 90 krónur to...
What a great idea, let's hang more dead wood onto an already shaky EUR.
  • #13
  • Last Post: Feb 2, 2009 2:40pm Feb 2, 2009 2:40pm
Quoting emda
heheh yeah... something to not be bored finally...
Are you into forex to prevent boredom or to make money? Profitable trading is usually very boring. If you're looking to stop boredom, there's a lot of other (cheaper) ways to do that
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