Auslanco - GBP/JPY and GBP/USD (newstrade)

Quoting Eulogy

Disliked

People are obviously positioning themselves for a rise in the interest differential between the $ and yen. That seems to be the only reason for the yens big declines these last 3 months even on the back of very bad USD data.

I'm actually gonna be asking if the rate expectations is reflective of reality. 30 day Future funds rates have already fully priced in a 75 bps hike by Dec08 and a 175 bps hike by Dec09. Can anybody here realistically think that the Feds will hike by that much that soon? If that truly happens then proponents of the V shaped recession will be blown out of the water with the US economy sinking into a deep U shaped recession that is 15x more wide in shape than it is tall.

Ignored

Quoting Piters

Disliked

Good question, If the OIL price is "normal" then I would say YES, you're right. But with the OIL price high, we saw not many buyers in last 2-3 weeks to RUN YEN. So, it is questionable. Only $ and GBP are constant now, and predictable, but YEN is on Crossroad at this moment, we wait and see what the "BIG GUYS" are going to do. After yesterday's DOW action, we should see South PA for all Yen pairs, but in this moment everyone hedge their position with Oil.. Big ??? for me.. I wait and play on smal TF 2min, 5min.

Ignored

Quoting chonchy

Disliked

but the ? remains why gbp/jpy falls if dollar (lehman) falls, what gbp have to do with lehman, I guess I don't know how to formulate the question I'm sorry

Ignored

Quoting Eulogy

Disliked

Historically speaking the jpy has been more reactive (both scale and speed) to a mass usd sell off than any of the other major currencies. Obviously with the yen vs equities correlations flying out of the window, its really anybodies guess.

Ignored

Quoting chonchy

Disliked

becouse for gbp/jpy to fall we need bad gbp data not usd, so why gbp/jpy falls when dollar falls, if gbp/usd go up when dollar falls., I guess when usd falls brings jpy up, henze bringing gbp/jpy down to, I think I get it, but don't understand it, enough of this bs, sorry guys.

Ignored

Quoting Eulogy

Disliked

What happens is that when USD drops the it causes the U/J to fall creating yen appreciation that more often than not overwhelms any gains made to the G/U pair on USD depreciation.

When mass risk aversion sets in it drops both the U/J and the GBP also drops against the USD making the G/J really plummet

Ignored

Quoting chonchy

Disliked

got you big guy I get it belive me but not to the logic of, that, if risk aversion kiks in them people should get there money out the yen too, or is it, that, the yen is stronger than the gbp when this fenomenon happens?

Ignored

Quoting chonchy

Disliked

why people buy jen when dollar falls, why don't they buy oil or gold wish I think is the case, so the jen should't apriciate so much with only .50% INTEREST rate, any ways thanks for the platique, or should I said conversei, good luck on your trade man, let see if this this go down or blow my acc ither way I'm ready for her, she allready blow a small acc I had for hedging, now looking forward to blow the other one ust kidding

Ignored

Quoting Eulogy

Disliked

What happens is that when USD drops the it causes the U/J to fall creating yen appreciation that more often than not overwhelms any gains made to the G/U pair on USD depreciation.

When mass risk aversion sets in it drops both the U/J and the GBP also drops against the USD making the G/J really plummet

Ignored

Quoting Eulogy

Disliked

Mostly the reason for the jpy appreciation during risk aversion cycles is because investors use the jpy as a funding currency. They borrow from the jpy, and invest it in US, UK, Euro region, Aus, NZ...etc where they can get better returns. When risk aversion hits, these carry trades have to unwind massive positions in other currencies back into the jpy (repatriation) when they close their positions. This mass buyback of the jpy causes it to appreciate fast and furiously.

BTW guys, nikkei coming back to the 14k mark

Ignored

Quoting Spectator

Disliked

If the USD is the only currency "affected" by a piece of news, then GBP/JPY will remain the same. We've seen this a few times this past week, where changes in UJ are more or less precisely balanced by changes in GU. However, generally the US and UK economies are affected by similar things - negative sentiment in one about banking etc. affects the other. In this case GBP also weakens, hence GJ weakens.

Ignored

Quoting Scrat

Disliked

oh yeah, that one . showmethamoney!!!
how about mine?

Ignored

Quoting rogerdoger

Disliked

is anyone long gbp/chf?

Ignored

Quoting samclider

Disliked

GJ

Ignored

Quoting Clouds

Disliked

Maybe, but I personally will wait till Sunday to buy, as long as dollar selling has been exhausted...

Ignored