The Carry Trade: Buy or Sell? - Page 22

arodriguez · #**316** (**permalink**) 10-14-2009, 08:59 PM

82 met today morning in Asia... what next? 85?

A.

Quote:

Originally Posted by arodriguez

Hi Sean,

Now, I am seeking for 82, range's top on weekly chart. My entry was at 78.38 early in Monday. of course, BOA helped... SL at 79.40 for +100pts.

What do you think about the target?

best,

A.

the phoenix · #**317** (**permalink**) 10-15-2009, 02:44 AM

Quote:

Originally Posted by Sean Hyman

the phoenix, well it's great to have you posting here. I hope you'll continue to be an avid poster here.

I'll probably post until I go belly-up. The RBA announced today that the interest rates are going to have to go up quickly because they went down quickly....and the downturn wasn't as severe as first thought. With China's growth....Australia is like one of those birds ya see riding around on the back of a rhinoceros.

I'm now cautious of the pound overtaking the US dollar. I still hold the view that the AUD is strongest out of the three. I use 3 currencies - sort of like an isoseles triangle......i can feel the Dan Brown coming out in me.

If the above happens then the pound won't drop as far as I initially thought. That said, I think when the BoE releases its minutes next week along with GDP results ....and has its next meeting in November......a clearer picture will arise.

I'm feeling pretty confident that the RBA will put the rates up .5% on Cup Day given the spiel the bank gave today and given that aussies think the last rate rise was a good thing in that it meant the economy was improving. All in all, aussies are pretty chuffed with the govt because they gave us all at least $1000. The for low income earners - they got another $1250 tax rebate. Families with kids got $1000 for each child and themselves at last Xmas....and then in March, they got another grand for each child.

I obviously said thanks, packed my rucksack and went to Alaska. Thanks Kev!

Fear I guess can even get the governments hopping.

cheers

the phoenix

mekosmowski · #**318** (**permalink**) 10-15-2009, 09:09 AM

Is anyone running carry trades on the exotics? I noted that shorting the USD/ZAR gives 0.11 rollover while fooling around waiting for an opportunity to enter a trade last night. On the other hand, said USD/ZAR also had a 200, yes, two hundred, pip spread. Having said that, I switched to tick view for kicks and giggles and that 200 pip spread looks to be traversed quite often.

This was during Asia session though. Maybe the spread decreases during Europe session, as that is the time zone for South Afrika.

Apropo of nothing whatsoever, looking at the USD/ZAR reminds me of when I was wee and working at a Boy Scout camp. One year, we had an exchange scout from South Africa and I had the opportunity to learn a few words of Afrikaans. Unfortunately, the years have eroded those brain cells, and I don't remember any Afrikaans other than "Zuid Afrika".

Sean Hyman · #**319** (**permalink**) 10-15-2009, 11:24 AM

Quote:

Originally Posted by the phoenix

I'll probably post until I go belly-up. The RBA announced today that the interest rates are going to have to go up quickly because they went down quickly....and the downturn wasn't as severe as first thought. With China's growth....Australia is like one of those birds ya see riding around on the back of a rhinoceros.

I'm now cautious of the pound overtaking the US dollar. I still hold the view that the AUD is strongest out of the three. I use 3 currencies - sort of like an isoseles triangle......i can feel the Dan Brown coming out in me.

If the above happens then the pound won't drop as far as I initially thought. That said, I think when the BoE releases its minutes next week along with GDP results ....and has its next meeting in November......a clearer picture will arise.

I'm feeling pretty confident that the RBA will put the rates up .5% on Cup Day given the spiel the bank gave today and given that aussies think the last rate rise was a good thing in that it meant the economy was improving. All in all, aussies are pretty chuffed with the govt because they gave us all at least $1000. The for low income earners - they got another $1250 tax rebate. Families with kids got $1000 for each child and themselves at last Xmas....and then in March, they got another grand for each child.

I obviously said thanks, packed my rucksack and went to Alaska. Thanks Kev!

Fear I guess can even get the governments hopping.

cheers

the phoenix

Yeah, Australia is definitely the new "carry trade" to buy up vs. USD and JPY (AUD/USD, AUD/JPY).

I loved it how Stevens talked about how they can't be "timid" about hiking rates. You go Stevens. haha! DailyFX Forum - News in 60 Seconds

Sean Hyman · #**320** (**permalink**) 10-15-2009, 11:28 AM

Quote:

Originally Posted by mekosmowski

Is anyone running carry trades on the exotics? I noted that shorting the USD/ZAR gives 0.11 rollover while fooling around waiting for an opportunity to enter a trade last night. On the other hand, said USD/ZAR also had a 200, yes, two hundred, pip spread. Having said that, I switched to tick view for kicks and giggles and that 200 pip spread looks to be traversed quite often.

This was during Asia session though. Maybe the spread decreases during Europe session, as that is the time zone for South Afrika.

Apropo of nothing whatsoever, looking at the USD/ZAR reminds me of when I was wee and working at a Boy Scout camp. One year, we had an exchange scout from South Africa and I had the opportunity to learn a few words of Afrikaans. Unfortunately, the years have eroded those brain cells, and I don't remember any Afrikaans other than "Zuid Afrika".

USD/ZAR is also ONLY a 14 cent per pip move on a mini account vs. most being $1 a move too. So there's the big difference.

Yes, the spread is wider in pips..but also so is your cost per pip...dramatically lower. That's what you have to take into account with USD/ZAR. Also, you have to take into account how easily it moves in number of pips each day too. It averages OVER 1,300 pips a day of movement...how many pairs can say that.

So all of that has to be taken into account and then you realize that the spread isn't so bad when the pip cost is so cheap and the potential movement is so big.

mekosmowski · #**321** (**permalink**) 10-15-2009, 01:26 PM

Quote:

Originally Posted by Sean Hyman

USD/ZAR is also ONLY a 14 cent per pip move on a mini account vs. most being $1 a move too. So there's the big difference.

Yes, the spread is wider in pips..but also so is your cost per pip...dramatically lower. That's what you have to take into account with USD/ZAR. Also, you have to take into account how easily it moves in number of pips each day too. It averages OVER 1,300 pips a day of movement...how many pairs can say that.

So all of that has to be taken into account and then you realize that the spread isn't so bad when the pip cost is so cheap and the potential movement is so big.

Thank you for bringing that to my attention. I actually hadn't looked at the cost per pip for this pair, since everything else tends to be fairly uniform. Glad I posted - I'll look closer into this pair. Maybe not for today, but to file away for the future.

Again, thanks!

Sean Hyman · #**322** (**permalink**) 10-15-2009, 02:29 PM

Quote:

Originally Posted by mekosmowski

Thank you for bringing that to my attention. I actually hadn't looked at the cost per pip for this pair, since everything else tends to be fairly uniform. Glad I posted - I'll look closer into this pair. Maybe not for today, but to file away for the future.

Again, thanks!

Yeah, it seems like a lot until we realize that the pip cost is about 8 times cheaper than the average pip cost. hehe! That makes a huge difference.

Plus, this one will cover TONS of pips more than most pairs out there.

I always look at the spread in light of the potential move that the pair typically does. In other words, what's my cost relative to what the pair could move/profit on.

Also, you'll find that the spread is far less in the U.S. session because it has more "dollar volume" then and helps to narrow that spread quite a bit too.

the phoenix · #**323** (**permalink**) 10-16-2009, 10:13 AM

Quote:

Originally Posted by Sean Hyman

Yeah, Australia is definitely the new "carry trade" to buy up vs. USD and JPY (AUD/USD, AUD/JPY).

I loved it how Stevens talked about how they can't be "timid" about hiking rates. You go Stevens. haha! DailyFX Forum - News in 60 Seconds

Yeah I loved it too! I take that timid to equal .50% rise on Cup Day. The RBA certainly dropped enough hints prior to the last rate rise......for about 2 weeks before the decision was handed out, he was constantly saying how rates would have to rise soon.

I guess, it is better to forewarn the homeowners rather than to surprise them out of the blue.

Aaaahhhhhh....its a fascinating world we live in. Should i bring up the age-old question....."whats the meaning of life?".......LOL.

Well its 12:12am in Kangarooland and so cyers!

the phoenix

Sean Hyman · #**324** (**permalink**) 10-16-2009, 12:38 PM

Quote:

Originally Posted by the phoenix

Yeah I loved it too! I take that timid to equal .50% rise on Cup Day. The RBA certainly dropped enough hints prior to the last rate rise......for about 2 weeks before the decision was handed out, he was constantly saying how rates would have to rise soon.

I guess, it is better to forewarn the homeowners rather than to surprise them out of the blue.

Aaaahhhhhh....its a fascinating world we live in. Should i bring up the age-old question....."whats the meaning of life?".......LOL.

Well its 12:12am in Kangarooland and so cyers!

the phoenix

Yeah, I think their hikes could be fairly close together and could have some greater than 0.25% if they keep talking that way.

Also, NZD may be right behind them too. We'll see.

Sean Hyman · #**325** (**permalink**) 10-19-2009, 09:55 AM

Canadian interest rates out tomorrow. See if they hike or hold. Expectations from the economists are for them to hold rates steady.

Sean Hyman · #**326** (**permalink**) 10-19-2009, 11:29 AM

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Sean Hyman · #**327** (**permalink**) 10-20-2009, 10:29 AM

More bullish rate comments coming out of the Aussie central bank. Good for Aussie carry traders (AUD/USD, AUD/JPY, etc.).

http://forexforums.dailyfx.com/blogs...unchanged.html

arodriguez · #**328** (**permalink**) 10-22-2009, 10:56 PM

Quote:

Originally Posted by arodriguez

82 met today morning in Asia... what next? 85?

A.

85.00 hit this morning in Asia. I see now 85.53, 61.8% of 104.46-54.91.

A.

Sean Hyman · #**329** (**permalink**) 10-23-2009, 11:55 AM

AUD/CAD could potentially be one to watch for a carry trade.

Aussie, without a doubt, wants to raise rates.

Meanwhile Canada's central bank is doing everything within their power to "talk down" their currency. See what you guys think.

Sean Hyman · #**330** (**permalink**) 10-23-2009, 04:01 PM

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