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11/5/2005

 

 

Comparing the implied future 3 month Eurodollar deposit rates with the implied future

3 month EuroYen rates, we get the following picture:

The rate differential will increase marginally into the 2006, and then the speed of the rate

increases of BOJ will surpass the speed of rate increases of the FED.

 

 

 

To what a degree is this a driver of the US Dollar/Japanese Yen differential?  It is a good

question, and I am not sure of the answer.  It looks like other factors might be more

important in for this currency pair than this is.

It is very interesting though, that the Nikkei Index is doing so good and the value of the

Japanese yen is eroding daily...

 

This is not a trade recommendation and no one should treat it as such.

 

Recommended Links on the topic:

 

US Dollar - Euro 3 month Expected deposit rate differential

 

Implied Eurodollar, Federal Fund, Libor, EuroYen, EuroSwiss, Euribor, Australian, Canadian

and New Zealand Interest Rates