A Chart – For Those Evaluating Risk
Remember this beauty? The swing in AUD/JPY Monthly now firmly taking hold. We’ve got a loooong way to go here.
I’ve made light of it before as it’s a handy thing for “non forex traders” to also consider keeping in mind.
The currency pair AUD/JPY has long ago been directly associated with the “risk on” trade, as traders simply borrow ( sell ) Yen ( as the base lending rate in Japan is practically 0% ), then invest (buy) the same money in a higher yielding currency such as AUD ( base interest rate currently paying 2.5% )
It’s essentially free money, and rests pretty much as “the backbone” for most major banks – as far as forex strategy is concerned.
When this trade “unwinds” ( when risk appetite wanes, and banks and major investors begin to seek “safety” ) you certainly don’t want to be on the other side of it – as the move is nothing short of amazing.
Lets take a look at the “unwind” back in…
View original post 399 more words
Forex Trading with Kong 
Enjoy your post. In 2008, aud/jpy went down hard and us treasuries (ie TLT) went up. Now you say that everything goes down and it cash position. Why wouldn’t TLT go up in this scenario if it went up in 2008 when aud/jpy went down hard. thanks.
LikeLike