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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (2508)	8/15/2000 11:16:13 AM
From: Henry Volquardsen	Read Replies (3) \| Respond to of 3536

Hi John, first a warning. I'm not watching the currencies as closely as I once did. I had a friend send me a couple of charts to refresh my aged memories :) let me start by saying as background that I am incredibly negative on the yen. the structural and demographic hurdles remain large. my biggest concern is the huge and ever growing budget deficits and the mountain of debt. Eventually I see currency debasement as the only viable exit. The offset to this is that until a catalyst occurs that will show the currency debasement has begun there will still be a lot of head wind from yen repatriation and the trade surplus. I've been bearish on Europe and still have long term structural questions. However the core have quietly been addressing tax and structural issues and I am beginning to believe we may be near a bottom in the Euro in the next six months. euro/yen three months. I would be inclined to go short the yen but I'm going to look to $/yen and $/GBP for a clue. The yen has weakened against both recently and are nearing near term resistance. I suspect we will likely see some yen repatriation shortly as we approach the topside trend lines on these two. Once we resolve that resistance I would look to short the yen. If it backs off you get a better level and if it breaks through you should get a decent run. In either case the carry is good.