What Are Currencies REALLY Worth? Which is Over/Under Valued…..

June 10, 2013

We have covered this before, but now there is a much different look to the charts as Japan has tried to undercut every currency in order to kick start their economy.

Technicals are on thing, but in the end fundamentals should be the real driver of a currency. In order to get a better read on the valuation of a country’s currency, we can use the effective exchange rate. Over time this should not deviate to much from the center-line average. When it does, there should be a Read more

Guest Post: It’s Raining (men) Yen! Hallelujah! Dispatches from the Currency Wars (DAS)

May 14, 2013

Das has a great way of breaking down complex situations into bit sized chinks that are much easier to understand. He recently penned a piece that sheds some light on the problems with currency debasement by developed countries when taken to an extreme. Good reading and something to consider now that the Yen has been dropping with a vengeance as the G-7 is content simply watching the move.

It’s Raining Men Yen! Hallelujah! Dispatches from the Currency Wars – By Satyajit Das

(With apologies to The Weather Girls), it’s now raining men Yen! Japan has opened a new front in the “currency wars”, a term coined by Brazilian Finance Minister Guido Mantega in 2010. The US, UK and Switzerland are Read more

TDI Podcast: Central Banks are Doing What? (#311)

May 1, 2013

This week we explore a hair raising news story that discusses the new direction of some of the world’s central banks. It is quite disturbing and won’t end well. Earnings and Economics are also topics that we explore as well as how to properly set stops/limits in the current market environment. Gold and oil updates as well. Read more

The Yen – Trade Weighted Valuation Targets

April 29, 2013

This study shows the effective exchange rate and is a measure of the value of a currency against a `basket’ of other currencies, relative to a base date. It is calculated as a weighted geometric average of the exchange rates, expressed in the form of an index. The effective exchange rate indices for sterling and other currencies published by the Bank are based on the method the IMF uses to calculate effective exchange rates for a number of industrialized countries.

The weights used are designed to measure, for an individual country, the relative importance of each of the other countries as a competitor to its manufacturing sector. The trade weights  Read more

How Much More Could The Yen Drop? How Pissed Will China and Others Be?

March 7, 2013

We are looking at the Effective Exchange rate for the Yen. The Japanese directive to debase the currency at any cost is already starting to create some ill will amongst countries. Recently, China and Germany have been vocal about the extreme move of late, which has brought the Yen down by more than 15% over the past months. (Of course the impotent IMF and G20 did nothing but exacerbate Read more

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