Just a quick update on my blog, I had twittered earlier that I short the USDJPY twice; once at 104.75 and another time at 104.93 for an average cost of 104.84.
USDJPY came off from a high of 105.44 before midnight Asia time on Friday and by 2am in the morning it was down to 104.55 and closed at 104.63.
Let’s see what this week brings for the yen, however, I must admit that I am not entirely comfortable with FOMC rate decision on Thursday morning.
I know Yellen won’t raise interest rates in a FOMC decision date that has no press conference, will cause way too much irrational volatility and also so close to the election.
She will raise interest rates and I do believe it will be in December. However, two weeks ago, in a speech she mentioned that it is alright for the economy to overheat a little before the Fed steps in to curb it by raising interest rates. She felt that there was no real danger in terms of significant negative impact for the US growth to run away a little.
This was something I discussed in one of my earlier blog post. The USA is such a mature economic dinosaur, just how fast can the economy run if it wishes to overheat? 3% or 4% GDP, but that is fine.
Anyway, I will probably square my yen position before Thursday, simply because I do not wish to get caught on the wrong foot. After all, all my expectations is 0.5 yen or slightly better and I am out.
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