Foreign Exchange Rates

Fluctuations in foreign exchange rates have been in the news recently—especially the falling U.S. dollar—for example, "Yen Advances to 18-Month High Against Dollar on Credit Concern."

Works on the foreign exchange rate of the U.S. dollar and the yen are classed in 332.4560952073 Exchange rates of Japanese and United States currencies (built with 332.45609 Historical, geographic, persons treatment of exchange rates plus T2—52 Japan plus 0 plus T2—073 United States, as instructed at 332.456093–332.456099 Exchange rates of specific currencies and groups of currencies in specific continents, countries, localities), e.g., A Structural Break in the Effects of Japanese Foreign Exchange Intervention on Yen/Dollar Exchange Rate Volatility.  The Table 2 notation for Japan precedes that for the United States because of the instruction at 332.456093–332.456099: "Give priority in notation to the currency of a jurisdiction or group of jurisdictions coming first in Table 2."  Works on the foreign exchange rate of the U.S. dollar with respect to multiple currencies are classed in 332.4560973 Exchange rate of United States currency (built with 332.45609 Historical, geographic, persons treatment of exchange rates plus T2—073 United States, as instructed at 332.456093–332.456099 Exchange rates of specific currencies and groups of currencies in specific continents, countries, localities), e.g., Dollar Adjustment: How far? Against what?

Comments

[Bradley]

Where would you class the Linden dollar?

[Anna Coulling]

As a full time currency trader in the UK, I thought I would add my comment to your post on the Yen and the Japanese economy. In simple terms I believe there are several things to remember when trading the dollar yen or investing in yen assets. Firstly, the economy is unlike any other in the western world. It is highly dependent on its export markets which in turn are highly dependent on the strength or weakness of the yen. This in turn affects the speculation on the yen and in particular the carry trade which has been a favourite for many years due to the very low interest rates. This is likely to continue for some time to come and my own personal view is that the rates may be cut later this year back to 0.25%. Now bear in mind that a strong yen will adversely affect exports, and the interventionist Bank of Japan will ensure that this does not continue. In short, a recipe for a weak yen to dollar relationship for the foreseeable future. My personal view is that the pair will bounce back from below the psychological 100 barrier, back to somewhere between 105 and 110 in the short to medium term.