The position is: Long USD 3m short Yen at 103.10 average.
However I am not comfortable being long USDs, as I believe the USD has some serious weakness ahead in the next few years. However I am happy being short JPY.
Sooooo, I began discussions with my bankers. If I went long AUD and short USD3m would they offset the USD3m long/short and treat it as a AUD/JPY deal for limit purposes?
Essentially doing another 3m USD and marking the position to limits on a gross basis would mean I would not have enough capital to do this and my other trades as well, or at least not comfortably.
I got an agreement today that they would net the trades and treat it as a AUD/JPY deal if I added the AUD/USD leg.
So sold USD3m and bought AUD at 0.8030, thus making the trade long AUD3,735,990.04 short JPY at 82.79. Given that the current spot is at 78.00 I still have a long way to go, but at least I do not have a USD exposure, which is what I wanted to move to.
And I haven't impacted on my limits at all!
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3 comments:
Dude what does this mean
"Sooooo, I began discussions with my bankers. If I went long AUD and short USD3m would they offset the USD3m long/short and treat it as a AUD/JPY deal for limit purposes"?
Does this means you borrow money for trading purposes?
Does long USA mean you have to buy USA at a rate set now?
Does short Japan Yen mean you sell now and buy back later?
USA should drop ten per cent against all currencies soon.
I would put $NZ100,000 on it and I only have NZ money now, and we are going to rise by that 10%.
I went into Nuplex too early, and sold out on Fisher and Paykel too early.
My only long term proposition is to leave this bloody cold winter in the south island,
It means that I use a bank rather than a broker to do all my foreign exchange trading.
Long USD means bought USD as a forward exchange contract for delivery in the future. Short JPY means sold Yen for delivery in the future.
The idea being that in the future the USD will be worth more to sell and the Yen will be cheaper to buy back.
But I have done the opposite, expecting the AUD to be worth more and the JPY to be worth less, given the direction of their respective economies.
Kiwi trader says:
"The idea being that in the future the USD will be worth more to sell and the Yen will be cheaper to buy back"
pq say
surely the $USA dollar will decline over time,
the $AUD should remain strong I agree, do you have any comment about the $NZ against $AUD.
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