Quote:
Originally Posted by winterwhite
John:
Here:
Lehman Fails And AIG Is On The Verge - What Is The Currency Impact?
you state under "alternatives"
"a long carry currencies (Japanese yen and Swiss franc) and short dollars against comparatively strong currencies will find at least short-term interest."
END OF Quote
John, To further explain the above, could you give example/s of what you
mean in the above quoted statement?
Thank you for your commentary. |
Hello winterwhite,
The alternatives in this sort of market environment come in two brands: a cautious approach or an aggressive one.
In being cautious you would want to avoid the US dollar and long major carry trade pairs (GBJPY, AUDJPY, NZDJPY, etc) until the financial crisis is worked through. Otherwise, you are inviting incredible volatility into your trades where technicals and fundamentals mean very little and can be broken with little effort. This means trading pairs like EURCHF, CHFJPY, AUDNZD, EURGBP, etc.
The more aggressive trade would be to short those risky things that you don't want to be long in. So, if you see strong technicals and
long-term fundamental reasons for it, you can look for good short dollar and carry trade positions.
