Yen May Gain as Weekend Dow Jones Futures Fall, NZD Eyes RBNZ Stimulus
In the past week the Yen May had gained a little in reaction to the weak USD. Currently the Yen May has declined as the dollar rises against the Japanese Yen.
I am also monitoring the Nymex (Nike Japan) for further weakness against the Yen and for more ‘going green’ initiatives. Those are strong words to use when talking about Nike’s efforts to promote sustainability and green products. Last week was the 1st week in a year that the Nike brand name has lost out to none other than Yum Brands.
The one thing that I do like about Yum their brands like KFC and Pizza Hut, but the fact is, they do not take advantage of the ability to transfer their sales and marketing budget to their core business like their competitor’s. They are totally reliant on that for profit generation. I believe that this is very unfortunate and a huge source of frustration for the franchise owners who were hoping for dividends from their franchise.
Now I am not saying that I think that Yum is out of touch with what consumers want or need. I am simply pointing out the fact that most fast food chains do not put sustainability issues front and center. If you think of the corporate world, McDonalds for example and the product that they are selling, I would assume that they had a lot to do with helping to create a more sustainable planet for future generations.
I know that the latest move by the Japanese government is to allow for a higher conversion rate for cars. The problem with that is that the Yen May is getting weaker versus the dollar so the average auto buyer will be paying a little bit more in a move to protect the value of their currency. Even if the Yen gains back some of the ground it has lost since the beginning of the year, the result will still be a huge loss for the Japanese economy.
With the Asian Crisis becoming a bigger problem for Japan, there may be a recession brewing in the near future. It is my belief that the yen has already depreciated far too much and the Yen May falls even further before too long. I am watching the yen closely for future weakness or strength based on how it would respond to the weakening of the dollar.
The Canadian Dollar may be poised to gain because of what may be seen as negative events by the Fed. I mentioned last week that I am thinking about looking at the green movement in a financial sense. The people who are going green are certainly getting a lot of publicity and the media are covering the story.
If the green movement continues the Canadian Dollar may gain. I also mentioned the Nymex/USD with a strong rebound to close at a four-week high. If there is another big announcement from the Fed or if the news on Canadian Wood Products rebounds, the stock market could see a major move.
Look at the last time a country like Mexico issued a bond using their ‘Unicorn’ as their currency and did well. This has happened before and we know that the Green movement goes on forever. I am talking to a lot of people in the know in currency trading and they all think that the Mexican Nymex may be one of the next currencies to reach parity with the Japanese Yen.
We need to understand the potential of the Yen if we want to make money in forex. The last thing that you want to do is to over trade. The best time to trade is when the market is already at its ‘hot’ stage.
Sell when it is down. If the market is already trending down then that is the time to sell. I usually think about the long term and try to stay away from short term speculation.
I just learned that the Euro may rally after Greece leaves the Euro. It is not known exactly when they will leave the Euro or when they will start printing their own currency again. Stay tuned for more news!