FX Daily Wrap Up

The polls are in from 2006 and Forex is the hands-down winner, with volume up 45% over 2005 and more than 287% since 2001. More volume means more liquidity, and liquid markets provide more short-term trading opportunities while being less prone to large whipsaws of volatility. Still, how to apply these benefits to trading is the million dollar question. Professional traders normally adjust their parameters in a shorter cycle with better range-bound trading. Looking at today’s markets, the USD/JYP is in a holding pattern waiting for a possible rate hike, with Japanese policymakers holding their annual meeting to set direction for the currency. A strong Yen is not necessarily a good thing for Japan – higher cost of exports decreases the competitive balance in the market and ultimately reduces export sales. However, if the Yen remains at its current “cheap” price, it is possible for new growth and opportunities to arise, including expansion beyond projected growth. The USD/JYP is currently trading at 120.64, only 10 pips below the open. XPRESSTRADE Analyst David Hilgeman