Short Term and Long Term Comparison of USD / JPY

Long-term trends in the strength of the Japanese yen were witnessed for the longest time in the currency’s history only during the period between 1985 and 1995. The only interruption that occurred was during a stint in 1989. This stability resulted in a very amazing 71% rating of the JPY against the USD

Sometimes though, sudden reversals have to occur which might have rather violent outcomes to investors. These reversals occurred in 1990 and later on in 1998. At the present indications, the USD is heading for an over-bought condition when viewed against the JPY. There is therefore a real danger of a sudden trend reversal. The world ought to be aware of these dangers and should prepare accordingly.

One might say that the further we go in the task of predicting the behavior of the Dollar against the Yen, the closer we get to the point of trend reversal. When the present scenario is closely observed, one can clearly see that things are not as bad as they were in 2002. In 2002, there was a multi-year reversal.

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The EUR / USD Debate in Light of the Current Global Economic Recession

The truth of the matter is that the dollar has become considerably weak in recent times. When the Bush administration plunged the US into war in Iraq, a trade deficit was the most immediate outcome. This weakened the dollar to a large extent. The long-term outcome was that many investors switched from the dollar to the Euro.

Another outcome of a reduced volume of trade in dollars is the increase in the prices of oil. The US economy is reeling from the effects of a biting recession although no negative growth has been reported. This is very true although the first quarter of a negative trend in growth has not yet been witnessed. Technically, there have to be two quarters of negative growth for a recession to be said to exist.

The American mortgage crisis has affected the value of the dollar against the Euro. Many realtors have stopped buying. They are standing by the fence waiting for the next shift in property prices before they can make a purchase. The mortgage in the US has spread its fangs into the UK where several banks have found themselves in liquidity crisis. One of these banks is Northern Bank, a renowned mortgage lender.

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