Forex Markets and USD/Yen Drops to a 15 Year Low October 27, 2010 at 1:38 pm
There have been several interesting moves in the financial markets following the G20 meeting, as they decided against ‘competitive devaluation’. This presumably means that we will can all sit back and watch on as America devalues the Dollar through quantitative easing
There was also pressure applied to China to simply do something about the Yuan without, of course, actually doing anything. Overall it was a pretty standard G20/G7/G10 meeting and little was actually agreed. Following the G20, the markets traded up but that was probably due to a weakened Dollar.
Then there is poor old Japan. Note that the Dollar has dropped to new 15 year lows versus the Yen. According to a recent Financial Spread report, “The Yen is basically the only truly floating major currency in the Far East and this is causing incredible pressure which appears to have very little to do with reality and everything to do with the fact that forex traders cannot ‘buy’ any other Asian currencies in volume. At a certain point, this is all going to unwind with a big bang. However, probably not soon”.
The Greenback is once again the whipping boy in the CFDs and forex markets, closely followed by the Pound. Any piece of information that even hints at further quantitative easing leads to both of these currencies plunging.
Elsewhere, Sterling/Euro is dangerously close to its yearly lows, as the Pound edges closer to parity with the single currency. All is far from quiet in currency markets.
Note that if you are trading the FX markets with spread trading and/or CFDs you can lose more than your initial investment. CFD trading and spread trading carry a high level of risk, so before trading, ensure that they match your investment objectives. Where necessary, seek independent financial advice.