Wall Street Journal Article: Pound Emerges as Possible New 'Carry-Trade' Currency

Generali

sabretoothtigger wrote: »

Ive never carried anything more then a suitcase between countries and that was on wheels

I do think foreign investment is subject to currency risk so that makes me an interested party.
Right now I reckon risk is low, are we really going to go from 1.6 to 2 dollars for a pound. That could only be dollar weakness and Im not investing there on purpose anyway

I think the opposite of Generalii's example might happen (long term). I think currency traders use stop loss to cash in before it goes bad ideally because losses can be so great. Really depends how liquid the investment is and yea stoozing fits, stay flexible and it can work

Also many investments will alter in price in line with an exchange rate roughly. Gold in australia should not be that different to the uk, the numbers once passed through an exchange rate should match.
Thats the perfect case and other types like housing will do it less but the effect is still there.
When people say well my house didnt fall in price at all, they probably need to check did the price fall in yen or australian dollars because its likely the world moved while you were sleeping.
Also the big bears might be wrong if they dont include falls in currency imo!

There are a lot of drivers of FX movements. Carry is just one.

sabretoothtigger

yea I wouldnt count carry as the major influence, Ive only followed currencies since I realised how much it affects asset prices including shares

inspector_monkfish wrote: »

Sterling been whached down from 1.6520 to 1.6220 over the past 24hrs
largely on the back of the WSJ article

also down to 1.1065 against the Euro

I reckon its more then just sterling, isnt this some dollar strength also.
Was reading some speculators who think so, big chart pic from one of them:

http://img29.imageshack.us/img29/7133/dollarindexpng.gif

inspector_monkfish

sabretoothtigger wrote: »

yea I wouldnt count carry as the major influence, Ive only followed currencies since I realised how much it affects asset prices including shares


I reckon its more then just sterling, isnt this some dollar strength also.
Was reading some speculators who think so, big chart pic from one of them:

http://img29.imageshack.us/img29/7133/dollarindexpng.gif

Sterling has just been hammered since the WSJ article overnight.
Its at a 24yr low against AUD :eek:

Generali

inspector_monkfish wrote: »

Sterling has just been hammered since the WSJ article overnight.
Its at a 24yr low against AUD :eek:

I can think of a couple of reasons why the AUD would be favoured right now.

Positive carry is one.

Degenerate

inspector_monkfish wrote: »

Sterling has just been hammered since the WSJ article overnight.
Its at a 24yr low against AUD :eek:

I wonder how much they bribed that WSJ hack to write the article?

Generali

Degenerate wrote: »

I wonder how much they bribed that WSJ hack to write the article?

Who are they, please?

Mr_Mumble

Given the number of Japanese housewives who participate in the carry trade there must be a money making opportunity in facilitating frustrated British savers to do likewise. :think:

purch

There are a lot of drivers of FX movements. Carry is just one

Just a very small one under normal circumstances too.

The JPY carry trade was pretty unique occurance (that is for a Carry trade opportunity to continue to be available for such an extended period).

As Gen say's there are a lot of drivers, one of them being a newspaper story that might or might not happen :eek:

sabretoothtigger

Mr_Mumble wrote: »

Given the number of Japanese housewives who participate in the carry trade there must be a money making opportunity in facilitating frustrated British savers to do likewise. :think:

The only large amount of savers we have are people trying to own their own home.
Its quite a leap from building society savings to international currency speculation and investment.

The japanese spend money on gold lotion which they rub into their skin, alot of their money can literally be thrown away it seems.
Remember that story about the tokoyo sewage treatment works reclaiming more gold per ton then a gold mine typically makes.

Put simply, I dont think we have such an excess of wealth and our money saved here is for pensions and housing, it should not be gambled and the majority of people will lack the sound judgement to call it anything else

tomterm8

Mr_Mumble wrote: »

Given the number of Japanese housewives who participate in the carry trade there must be a money making opportunity in facilitating frustrated British savers to do likewise. :think:

I thought that they gave up, borrowing in one currency and lending in another is a good way to lose money.