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Strategies & Market Trends : John Pitera's Market Laboratory
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To: Hawkmoon who wrote (7956)6/16/2007 10:16:33 PM
From: John Pitera  Read Replies (1) of 33421
 
$/JPY ripped right through resistance at 122.00 on Friday, and the EUR and GBP etc had big up moves on the JPY cross.

The Yen could go to 130 from here or even 136.50 on a technical break out basis. I'm not sure how you reconcil the need for a stronger RNB - Yuan with the Yen weakening and making itself vulnerable to further weakening. I would say that it's going to be a turbulent summer in the currency markets and that should extrapolate to volatility and some unpredictability in the other asset markets as well.

I don't see the Yen stabilizing now that it has broken down the USD. I'm franking very curious about exactly what is going to happen over the next 3-4 months. I saw a really excellent article in a New Zealand paper regarding the New Zealand central bank intervention in the NZD this past week, it made a most excellent point that the central bank is trying to achieve diametrically opposed policy objectives at the same time recently, by raising rates to combat inflation and then pushing the currency down which of course makes imports more expensive and exacerbates inflationary pressures. I'll see if I can find that article. I also saw an argument that the New Zealand Central Bank action was resulting from Global liquidity issues, but I don't know if I subscribe to that theory.

John
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