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                                                                       Archives                                                                                                              4th October, 2006


Weakness in Yen, rally in High-Yielders
Recently there has been a lot of news regarding the weakness of the Yen suggesting that carry-trades are back in fashion. Not surprisingly, this has caused a rally in high yielding currencies like the Iceland Krona, the New Zealand Dollar and the Sterling Pound as they offer very attractive yields. Have a look at some of the high yielding currencies against the Yen and the Dollar since the middle of the year.


Blasphemy! Could the Chinese Yuan be "Overvalued"?
Economists all over the world believe that Chinese Yuan is undervalued. They only differ on the amount of undervaluation. Some say 20%, while others say 40%. But could they all be wrong and if so why? Here's an article which commits the equivalent of blasphemy by suggesting the Yuan could be Overvalued
http://www.bloomberg.com/apps/news?pid=20601039&sid=a_Rdndvr5F.A&refer=columnist_pesek



Update on Global Stock Markets

All stock markets, including emerging markets, have lost value since 9th of May 2006, the day world stock index topped. Emerging Europe has lost the most value. Wealth would have been best preserved by invested in a basket of all World markets, again proving that diversification pays.



Rupee-Yen correlation weakens

The Oct-05 to Jan-06 period saw very close correlation between Dollar-Rupee and Dollar-Yen. They continued to move more or less in tandem between Jan-Apr-06. The directional correlation continued in the May-Jul-06 period. USDINR gained 4.5% (from 44.98 to 47.02) while USDJPY gained about 6-7%, from 109.75 to 117.25 in this period. But, the correlation has weakened in the last 3 months. USDINR has fallen from 47.02 to 45.75 today, whereas USDJPY fell from 117.15 to 114.40 and then rose to 118.38. Is the Rupee dancing to a different tune than the Yen? Needs watching!


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Euro   Yen   Usd


Disclaimer: The above views are based on the latest available information. Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. While the views are proffered with the best of intentions, neither the author, nor the firm are liable for any losses that may occur as a result of any action based on the above. Global commodity and currencies markets are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.


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