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FX 2017 highlights
  • Euro was the strongest performer last year on dissipating geopolitical risk, strong economic growth and ECB tapering.Pound,
  • Aussie and Loonie also did well.
  • Dollar Index down by 10%. The reason for this big move is that other CBs will likely tighten following FED.
FX year to date
  • Sizeable movement for short span of time.
  • Dollar still is the punching bag.
  • Pound outperformance on Brexit optimism.
  • Aussie, Kiwi outperformed on better global economic prospects and rising commodity prices.
  • Yen is not as bearish as expected.
United Stated Economy

  • Annualized growth topped 3% in Q2 and Q3 but Q4 GDP growth missed the expectation to grow by 2.6%. However growth to return above 3% after tax rate cut effect.
  • Headline Inflation for December 2017 was 2.1% y/y, below the 2017 high of 2.7% hit in February. Core PCE came in at 1.5 % y/y in December.
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Verona888 avatar

Great job!)

Vlad73 avatar
Vlad73 16 Mar

good luck

habiemile avatar

Interesting article!

pramuk avatar
pramuk 3 Jun


mydream avatar
mydream 8 Jun


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FX performance Q3 highlights

  • Dollar slightly down in Q3, dollar/yen flat as Fed maintains rate hike path but other central banks catch up.
  • Euro rally pauses after reaching 2 and ½ years high in September. ECB is proceeding gently with tightening policy. Political risks re-emerge in Europe.
  • Pound has a good Q3 quarter after a surprise hawkish shift by Bank of England. Brexit talks gather some momentum but take its toll on UK economy.
  • Commodity rally (especially metals). Oil also has a positive quarter amid signs that market is finally re-balancing.
FX year to date

  • US dollar off its lows as one more rate hike expected.
  • Euro’s rally has stalled on some political setbacks and ECB’s dovish tapering. Rise in German yields.
  • The pound up versus the dollar, down versus the Euro.
  • Aussie did well despite correction in Oct 2017, Kiwi is flat versus dollar.

United Stated Economy

  • Q3 GDP growth came in at 3.0%.
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mursei avatar
mursei 25 Nov

مقال رائعه

Annyrio avatar
Annyrio 30 Nov

very interesting!

khalidamassi avatar

Good luck +1

Yonggi7 avatar
Yonggi7 12 Dic

This article is well done!
And it is well presented!

thedoctor avatar

well done

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1. What drives the pair?
One of the important fundamental factors driving the pair is safe haven versus yield search. We must remember though, that New Zealand is not a high risk country! This is why we can see NZDJPY going up sometimes in spite of JPY currency index going up too. Both countries are 'far' from the rest of the world and both are 'isolated' as they are 100% insular. Although initial reactions to events like Brexit make JPY or CHF appreciate against everything, after the first moments NZD and similar currencies also go up, as they give better yield while not being affected that much by general pains of economy and politics.
Let's see relevant data for both countries when it comes to trading the pair:
  • New Zealand
  1. Politics: Constitutional monarchy with parliamentary democracy. Constitution is not codified. British monarch is the head of state.
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ak10 avatar
ak10 23 Nov

Useful method, Ito new for me.

Uliana_Alexandrova avatar

Very interesting!!!

brilliant avatar

I like those pairs too

marina2016 avatar


FXRabbit avatar
FXRabbit 14 Dic

Good article!

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At a time when the world is facing a major financial disruption investors look for a safe haven for their money, and despite the economic backdrop the yen is seen as one of the safe havens, a place with little risk.
Paradoxically, the world's largest debtor nation, with negative interest rates and an ageing citizenry don't seem to gather the regular conditions for the country’s currency to spike, but that’s exactly what has been happening to the yen during this year.
Polls over the past year have shown that more than three quarters of the Japanese population have not benefited from Abenomics.
The economy is at a standstill, wages and household income are stagnant and deflationary pressures remains strong.
When it was first advertised, Abenomics filled the Japanese stakeholders with encouraging expectations over an economic rebound.
With too little changes in the economic situation, the current policy is gathering the acronym of the “welfare for the wealthy” - it only boosts Nikkei and Topix.
William Pesek [1] author of Japanization: What the World Can Learn from Japan’s Lost Decades (2015) stated by Jeff Kingston:
Abe’s catchy marketing campaign wowed a media establishment accustom
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Tasha_Mk avatar
Tasha_Mk 26 Oct


k_morocco avatar

very intersting

Boznow avatar
Boznow 29 Oct

Bardzo interesujące

Alexander22 avatar

good job

Mani avatar
Mani 17 Nov

good job

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It proceeds not to remember such hot summer long ago (the past, the right was similar, but .. )and! We consider a top of 7 events of July, we try to understand what expects us in August, and a lot of things seem: while wrote article the fresh data Non-Farm and decisions on an interest rate of RBA have been published. Bank of England! The bank of England sat on August 4, on Thursday!
Last week of the seventh month
RBA after the publication of inflation
The rate of inflation remains the same for the weighed indicator: 1,7% against 1,5% forecast for annual size. Standard CPI at the level of 1,0% against forecast 1,1% and the previous 1,3% for annual value. Well it or is bad before RBA meeting?
From the point of view of news trade – it is good as in transparent calculation "inflation is lower, the probability of decrease in a rate is higher" turbidity is brought. Citi, for example, has reviewed the forecasts of change of a rate of RBA since August for November.
We saw the prevailing majority of forecasts for a meeting on August 2:-0,25% of a rate (from 1,75% to 1,5%). Change of inflation expectations gradually prevented forming of uniform forecasts that has resulted in their inconsiste…
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Yulia10 avatar
Yulia10 15 Ago

well done

Wovch avatar
Wovch 16 Ago

very good!

Natalia_Kisenko avatar

useful article!

yellownight avatar

хороший рейтинг

yellownight avatar

удачи в конкурсе

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As the global oil and energy prices plummeted in 2015, so did the inflation and growth rates. This left most central banks in quandary as inflation and growth rate numbers ran far below their targeted levels.
This article looks at the successes and failures of the current expansionary monetary policy regimes in the world with particular emphasis on the economies employing the negative interest rate policy.
What is Negative interest rate policy?

A negative interest rate policy is a monetary policy tool whereby nominal target interest rates are set with a negative value.
Rationale for Negative Interest Rate Policy

During periods of economic downturn and deflationary pressures, central banks often lower rates to stimulate growth and to raise the inflation rate. The main objective of negative rates is that they provide an incentive for private banks to make loans. With the negative interest in place, storing money at the central bank in the form of reserves or holding lots of cash will become unattractive and projects that were not worth funding even in a low-interest-rate environment might now look worthwhile.
In some cases, central banks turn to negative rates to lower…
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juraj avatar
juraj 3 Ago

Ilolor- it does not matter what the CBs state on their website, important is what they actually DO and how they make their decision.

Fed never even declared its 2% target in the way ECB did, yet we are presuming they want to achieve 2% inflation. Their models are based upon PCE numbers and when you look at the history it becomes clear that FED always acted as if they were targeting core PCE. They were ok with headline inflation of 3%+ yet core PCE was at roughly 2% so they did nothing. Back 3 years ago when headline surpassed 2%,

juraj avatar
juraj 3 Ago

Fed was in no hurry to lift the accommodation  because core PCE was still well below 2%.

If ECB officials declined to cut rates and step up QE saying core inflation was still positive and much better than headline, then they are de facto targeting core and not headline.

And if BoJ is refusing to step up easing for 2 years because core inflation is faring well, even though headline is back below 0 then they cannot be targeting headline inflation, no matter what their website says.

And lastly there are good reasons why you should overlook supply shocks (food&energy)

juraj avatar
juraj 3 Ago

I am finished here- the comment system is a piece of... limiting me to under 600 characters which makes it impossible to express my intricate arguments.

Take care, it was a nice talk to you.

Mattie avatar
Mattie 3 Ago

More often than not, it is for political reasons that the Fed Banks raise or lower rates. 

FXRabbit avatar
FXRabbit 26 Ago

Very interesting article!

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The yen is being traded with an unfavourable volatility. This is due to the negativity of the interest rate. Nikkei 225 index has fallen from 19,033 points at the beginning of the year till 15,960 points at the end of February. The recent sell off in equities is lightening that recent BOJ measures are short-lived, pointing out into further intervention.
Japan’s economy shrank 0.4% quarter on quarter in the last three months of 2015, dragged down by a fall in consumers spending and housing investment, failing 0.3% GDP (QoQ) shrinkage forecasted by analysts.
Reporting Mario Blascak and Matus Mader [1],
With the Japanese yen breaking to multi-year highs, the likelihood of further monetary stimulus from the Bank of
Japan (BoJ) rises.

Kuroda’s efforts enhanced in 2013 with a massive Q.Q.E. program to combat the 15-year long era of deflation are not providing the results yet predicted.
The recent downtrend in yen vs other major currencies is unwelcome, as it tightens the competiveness of Japan’s exports. It also pressures the unwanted Japanese imports purchase power, which unweighs in BOJ’s 2% targeted inflation.
Markets are questioning the effectiveness of negative interest rates to lift [/1]…
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Sveetlana avatar

Very good article. Good luck!

EliasOmar avatar

great article .. keep going

angelina_may avatar

i like it)

rajib217 avatar
rajib217 25 Mar

Nice Article

Olkiss70 avatar
Olkiss70 31 Mar

excellent article!

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I didn’t expect to be writing this article so soon. The idea first came up after the Bank of Japan unexpectedly eased monetary policy on October 31st The BOJ increased its bond buying program from 70 to 80 trillion and tripled its ETF purchases from 1 to 3 trillion yen. The surprise move lead to a 292 pips rally in the USD/JPY and on October 31st the currency closed off the week at 112.32. In the next month the Yen continued to be sold aggressively and last Thursday the Dollar/Yen spiked at a high of 118.97. But let’s start from the beginning.
The Rise of Abenomics
The latest round of easing is a continuation of a BOJ policy started back in 2012. After coming to power in December of 2012, the current prime minister of Japan, Shinzo Abe, started to implement a set of policies termed ‘’Abenomics’’. The aggressive policy changes involve radical quantitative easing, increase of public investment and structural reforms. Abe appointed Haruhiko Kuroda as head of the Bank of Japan with a mandate to generate 2 percent inflation. The inflation goal lead to the bank embarking on a massive buying spree during which the BOJ balance sheet almost doubled.
What’s Behind the Japanese Obsessio
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Convallium avatar

wonderful job!

fxigor avatar
fxigor 17 Dic

I agree with this article.My aproach to forex market is technical but I agree that There Will be No Japanese Bailout.

fxsurprise8 avatar

fxigor glad you agree with me :)

Durden avatar
Durden 26 Ene

Good job

driven avatar
driven 3 May

Extremely well-written article. I think your long-term assessment is probably true, but there is always danger in making short-term predictions.

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Introduction:The unmissable Bank of Japan (BoJ) meeting on Thursday the 4th of April has put in place a huge "shock and awe" level of QE, they have promised to purchase Japanese Government Bonds (JGB), ETF's and REIT's in order to increase the monetary base and help raise inflation.A breakdown of what the BoJ is actually doing is listed below;BoJ to buy 7 Trillion Yen of JGB's per month, all maturities up to 40 year bonds. Thus extending the average maturity to 7 years from 3 currently.BoJ to purchase "low risk" ETF's at a pace of 1 Trillion yen per year and REIT's at 30 Billion yen per year.2 year time zone to achieve 2% CPI Y/Y target.The overall aim of these measures is to double the monetary base, and hopefully, they believe, because of this they will start to see inflation. The current CPI Y/Y currently stands at 0.7% and has been almost stagnant for the past 18-20 years.Japan CPI Y/Y. Thomson ReutersAs you can see, they are aiming to target 2% (the yellow line) in a relatively short time frame, even though there is a 2 year target, if there is no improvement in the next 6-9 months there will be politcal pressure mounting._______________________________________________________…
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alifari avatar
alifari 28 Abr

Excellent Article +1

valentine avatar

Finally i get the chance to read a truly in-detail article, not only crap "hmm x is going down, its good to sell". More articles like this please! Thanks!

AdrianWS avatar
AdrianWS 29 Abr

cheers for the positive feedback guys :) not sure if I'll write these detailed articles much more, dukascopy don't seem to like them and they require a lot of effort, they seem to prefer trading strategies or coding, so depending on how this does I might write an article on potential housing bubble in singapore / new zealand as per request from a webinar but we'll see!

Thanks anyway.

xau avatar
xau 30 Abr

Very professional i may say, hope to be at this level some day. All strategies dies at some point, but such analysis is everlasting. Thanks for your effort.

valentine avatar

This article has to get in top 3, after dukascopy rating! I hope at last their rating will sort the actual quality of articles posted this month.

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I think every single trader, newbie or not, tried to take advantage of Japan’s “economic recovery efforts” by shorting the yen in the last 4 months. There were so many opportunities to make good money every time Japan PM, Shinzo Abe, had something to say about his strategy to boost GDP growth.We reached now a point where the world is asking if this chosen strategy, to weaken the yen, is not dangerous for the important economies as USA, China, Europe, and others. We just had a strange statement of G7 saying “nothing” but shortly after an unidentified official said: “The G7 statement was misinterpreted! The G7 is concerned about unilateral guidance on the yen. Japan will be in the spotlight at the G20 in Moscow this weekend.” That’s even stranger if you look at the US Treasury’s Undersecretary for International Affairs, Lael Brainard, that gave the Japanese administration a nod of approval in the way they have been handling their currency situation. Are u confused ? Because this is not everything: I red today an article where I found this: “In private, the US has been pressuring Japan's new government to refrain from mentioning the yen as it attempts to revive growth and end deflatio…
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Behrooz_MB avatar

excellent :)

SpecialFX avatar

Well, Japan may be doing easing measures to weaken their currency, but the US has been doing that for longer with their Quantitative Easing programs, and China won't let the Yuan appreciate as it should, so basically it would be highly hypocritical of them to say anything against Japan :)

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Shorting the yen and Japanese Government Bonds (JGBs), over the past 2 decades, has been such a disastrous trade for so many long term investors/traders that it is called by industry veterans as the "widow-maker" trade, and it is still making victims today. This article will explain why so many smart people were "killed" by this trade, why it didn't work then, and why it may finally make sense to short the yen in the not so distant future.______________________________________________________ ► Historical background: the good times and then the bubble...In the mid-1950's, agriculture still accounted for about 40% of the workforce, and the economy was characterized by low wages and uncompetitive industries, but the next three decades would bring such an unprecedented economic growth that by 1980 nominal GDP was estimated at US$1.065 trillion, compared to only US$44 billion a mere 20 years before. After WWII Japanese citizens were encouraged to save more of their income. With so much money in the banks, the country running bigger and bigger trade surpluses, and falling interest rates, credit was easily available. This led to a bubble of biblical proportions in the real estate and sto…
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SpecialFX avatar

The Bank of Japan yesterday joined other central banks around the world and decided to ease monetary policy more than expected. The BoJ increased asset purchases by 10 trillion yen, so that's why's the yen is getting weaker today.

alifari avatar
alifari 24 Sep

Everyday we learn something new, nicely written article +1

OneGoodTrade avatar

Very well presented topic with interesting ideas.

doctortyby avatar

the Yen is preparing us a surprise :)

kostas19 avatar
kostas19 29 Sep

The Asian economys are slowing down right now and the N1 printer in the world is the USA so i think specificly the yen vs the dollar should go down alot more

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