Tuesday, 15 January 2008

Buying AUD/JPY again

I bought and sold AUD/JPY last week, between 96.61 and 97.71. Today, the Yen is on FIRE against a number of currencies, and AUD/JPY is down over 2 points to 95.20. I just bought some Jun '08 at 92.81, in an amount that equates to about $2000 per big figure.

As I've said before, Japanese rates are 0.5% and either staying unchanged or going down as the Japanese economy slides back into recession, and Aussie rates are 6.75% and going up apparently. Until the commodity boom cracks, the carry here is worth clipping, and if I can combine that with some active trading, buying dips and taking my profits when they come, I think there is a fortune to be made in this cross.

Away from FX, I'm rueing some big missed opportunities yesterday. Of course, I should have let the FTSE option trade run, but I also had the chance to short some more United States Steel at a great level but didn't (down ~5% today), but didn't despite saying in a previous post how I would sell into any rallies. The strength yesterday just put me off, I guess I'm always a little suspicious that someone out there knows something I don't. Also didn't short Goldman despite it being over 200, which was a level I'd targeted, and also just irritated by Countrywide that just keeps falling!! If it hits the level where my P+L is flat, I'll just dump out of it I guess.

Hindsight makes it look so easy...


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