Who’s Your Daddy! – Kuroda and Abe Are Dominating the Currency Wars
- Posted by Greg Harmon
- on May 10th, 2013
Make no doubt about it. If you thought that the Quantitative Easing in the US was inflating asset prices and that our markets are benefiting from the combined efforts of the Treasury to weaken the dollar, especially against the Euro, than you are missing the big picture. The performance chart below shows 10 of the worlds major currencies over the past 200 trading days. Notice anything? There is only one currency, the Japanese Yen, that is out of the box. And it is not only out of the box but running 20% worse than any other
currency over this period. And it does not look to be letting up at all. Clearly Kuroda and Abe are sitting around the IMF, G-7 and G-10 meetings, finger wagging and saying ‘Who’s Your Daddy’ as everyone brings them another scotch. Can it go on forever? No! But it can go on for more time than you can fight against it. So embrace it. What does a weak yen mean? Gold in Yen will continue to outperform Gold in other currencies. And the Japanese market will continue to rise. Yes these charts may have ginormous Relative
Strength Index (RSI) readings and be extended from their Simple Moving Averages (SMA) but this is Kuroda and Abe working. Remember who your Daddy is and continue to embrace these trends, and then when they are over, look for the next one.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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