Monday, February 25, 2013

Midweek Position Summary

Portfolio Composition 

Long EUR/CHF   16.67 percent 

Short USD/MXN   25       percent 

Cash                    58.33 percent    


Heightened market uncertainty, on the back of murky results from Italian elections and ahead of Bernanke's testimony, has caused a violent reduction in risk sentiment.  The Yen appears to be the big winner in all this, resuming its status as safe haven as the markets wait with baited breath.  The recent pullback caused me to book some sizable losses on some short JPY positions, but I am looking to get back in after the market settles down.  The announcement of ultra dovish Haruhiko Kuroda as the next head of the BOJ sent the Yen tumbling last night in Asia, with USD/JPY touching 3-year highs, only to violently pullback.  
EUR/JPY is down an astonishing six big figures, or 4.8 percent in a single trading session. A It's days like these that make me want to stick to carry trades with undervalued EM currencies like MXN.                  

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