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Mortgage Broker Bonds For Pennsylvania
By Michael Weisbrot
This is the first of our series, “Mortgage Broker Bonds: State By State”. We decided to start with Pennsylvania, as it is our home state and also one of the most difficult states to get approved for. Read more...

Forex Trading Education
By Raul Lopez, Thu Dec 8th
How difficult is it to make money trading the Forex market? Howmuch time does it take to actually be able to make a livingtrading the Forex market? These and other important aspects oftrading are Read more...

Comments On Forex Trading Account Sizes, Lots And Margin Calls.
By Adrian Pablo, Wed Dec 7th
Forex trading is one of the best business opportunities you canthink of joining these days. No other market in the world allowsthe "Leverage" that the profitable world of currency-tradingdoes. Read more...

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Concept Of Yen Carry Trades
By akbar65
Yen carry trade

Yen carry trade - implies borrowing Japanese yen at low interest rates (0.5%) to finance purchases of high-yielding assets. The investor earns the interest rate spread or "carry" as long as long as interest rates in Japan do not rise (increases borrowing cost) and exchange rates are stable (exchange rate risk if the yen appreciates).

To briefly explain the process, Japanese yen is borrowed at very low interest rates. The yen are sold to buy a stronger currency. The new can be used to purchase a high-yielding asset. At the time of unwinding the trade, the asset is sold to obtain the principal and interest in the underlying currency, which in turn is sold to buy yen and repay the yen denominated loan.

Such a trade can be hedged at about a 100bp (1%), so if an investor borrows from Japan (@ 0.5%) and invests in US treasuries at 4.5%, he clearly earns 300bp (3%). The yen carry trade has been like a continuous money generating opportunity for big investors. Trillions of dollars are estimated to be in this trade, which has indeed been profitable for investors.

Implications of Yen carry trades

Rise in prices of high-yielding assets in which investments are being made.

Weakening of the yen as more and more investors resort to yen carry trades, in turn making the trades more profitable.

Increasing risk appetite of investors has seen them borrowing yen to invest in emerging economies like China and India. Leveraged trades further magnify profits as well as risks. At present the New Zealand dollar and the Australian dollar are high-yielding currencies, while, the Japanese yen and the Swiss franc are the most popular borrowing currencies, owing to low interest rates.

The yen has been weakening against the dollar over the past two years. However, recent appreciation in the yen has seen the unwinding of yen trades. Also, the unexpected 4.8% growth in the Japanese economy in the fourth quarter of 2006 will force the country's central bank to raise rates. Japan's short-term interest rate was 0% from 2001 till July 2006. This rate was increased to 0.25% in July 2006 and subsequently increased to 0.5% in February 2007. The rise in interest rates has increased the borrowing cost of

GBP/USD and EUR/GBP levels?
<div style="padding:0px; margin-bottom:1.5em;"> <a href="http://www.forexlive.com/blog/2012/02/07/gbpusd-and-eurgbp-levels/" style="font-size:1.2em">GBP/USD and EUR/GBP levels?</a> <br> <span style="color:#888888;">ForexLive (blog)</span> - <span style="white-space:nowrap">6 minutes ago </span> <div style="width:80%;">By Joe Brown || February 7, 2012 at 11:43 GMT Take a 5 minute survey to help us stay in tune with readers and keep the site fresh.</div> </div>
Gold Prices Dropped while Silver was Unchanged ? USD Up vs JPY but Down vs EUR <b>...</b>
<div style="padding:0px; margin-bottom:1.5em;"> <a href="http://www.bestsyndication.com/?q=20120206_futures_forex_signals_gold_euro_dollar_yen.htm" style="font-size:1.2em">Gold Prices Dropped while Silver was Unchanged ? USD Up vs JPY but Down vs EUR <b>...</b></a> <br> <span style="color:#888888;">Best Syndication</span> - <span style="white-space:nowrap">36 minutes ago </span> <div style="width:80%;">(Best Syndication News) Brent crude oil advanced today as tensions between Iran and the United States continued to fester (see forex and commodities charts below).</div> </div>
Forex Flash: EUR/USD estimated downside to 1.1500 end of 2012 ? UBS
<div style="padding:0px; margin-bottom:1.5em;"> <a href="http://community.nasdaq.com/News/2012-02/forex-flash-eurusd-estimated-downside-to-11500-end-of-2012-ubs.aspx?storyid=118984" style="font-size:1.2em">Forex Flash: EUR/USD estimated downside to 1.1500 end of 2012 ? UBS</a> <br> <span style="color:#888888;">NASDAQ</span> - <span style="white-space:nowrap">52 minutes ago </span> <div style="width:80%;">FXstreet.com (Barcelona) - January witnessed the bloc currency surge from sub 1.2650 levels to the 1.3230 region. Better-than-expected key economic indicators in the euro zone, successful bond and T-bill auctions in Germany and peripheral debt markets ...</div> <a href="http://www.thestreet.com/story/11403437/1/euro-reversal-to-gather-pace-ahead-of-ecb-sterling-holds-tight-range.html">Euro Reversal To Gather Pace Ahead Of ECB, Sterling Holds Tight Range</a> - <span style="color:#888888">TheStreet.com</span><br> </div>
Greece sells 812 mln euros of T-bills, yield eases
<div style="padding:0px; margin-bottom:1.5em;"> <a href="http://www.reuters.com/article/2012/02/07/greece-tbills-idUSL5E8D724720120207" style="font-size:1.2em">Greece sells 812 mln euros of T-bills, yield eases</a> <br> <span style="color:#888888;">Reuters</span> - <span style="white-space:nowrap">1 hour ago </span> <div style="width:80%;">* Yield drops 4 basis points to 4.86 pct * Bid-cover 2.72 vs 2.80 in Jan * Needs to roll over 1.0 bln eur of T-bills Feb 10 ATHENS, Feb 7 (Reuters) - Greece sold 812.5 million euros ($1.06 billion) of six-month T-bills on Tuesday to fund the rollover ...</div> </div>
Euro Slightly Lower As Greek Debt Talks Linger
<div style="padding:0px; margin-bottom:1.5em;"> <a href="http://www.actionforex.com/index.php?option=com_content&view=article&id=159050:euro-slightly-lower-as-greek-debt-talks-linger&catid=193:daily-forex-fundamentals" style="font-size:1.2em">Euro Slightly Lower As Greek Debt Talks Linger</a> <br> <span style="color:#888888;">Action Forex</span> - <span style="white-space:nowrap">2 hours ago </span> <div style="width:80%;">In a thinly traded session devoid of key eco releases, attention went to the tribulations surrounding the Greek bail-out package. So some risk-off buying and maybe some short covering following Friday&#39;s correction led to modest daily gains.</div> </div>
The EUR/USD cross rate drifted lower in Asia yesterday
<div style="padding:0px; margin-bottom:1.5em;"> <a href="http://www.fxstreet.com/fundamental/market-view/sunrise-market-commentary-currencies/2012-02-07.html" style="font-size:1.2em">The EUR/USD cross rate drifted lower in Asia yesterday</a> <br> <span style="color:#888888;">FXstreet.com</span> - <span style="white-space:nowrap">3 hours ago </span> <div style="width:80%;">by KBC Market Research Desk - KBC Bank | View company&#39;s profile On Monday, uncertainty on the outcome of the Greek debt negations provided the perfect excuse for profit taking on the recent risk rally.</div> <a href="http://www.forexyard.com/en/market-analysis/lack_of_greek_deal_sends_eur_tumbling-2012-02-07">Lack of Greek Deal Sends EUR Tumbling</a> - <span style="color:#888888">Forexyard</span><br> <a href="http://www.forexpros.com/analysis/greece-talks-extended,-euro-holding-above-1.3000-113275">Greece Talks Extended, Euro Holding Above 1.3000</a> - <span style="color:#888888">Forex Pros</span><br> </div>
EUR/GBP Forecast February 7, 2012, Technical Analysis
<div style="padding:0px; margin-bottom:1.5em;"> <a href="http://www.fxempire.com/technical/technical-analysis-reports/eurgbp-forecast-february-7-2012-technical-analysis/" style="font-size:1.2em">EUR/GBP Forecast February 7, 2012, Technical Analysis</a> <br> <span style="color:#888888;">FX Empire</span> - <span style="white-space:nowrap">4 hours ago </span> <div style="width:80%;">EUR/GBP fell most of Monday as the Euro got sold off. However, later in the day saw the Euro get a bit of a reprieve by the Americans, and this pair rose as a result.</div> </div>
Ageas Outlines Settlement Impact With Fortis Bank And BNP Paribas - Quick Facts
<div style="padding:0px; margin-bottom:1.5em;"> <a href="http://www.nasdaq.com/article/ageas-outlines-settlement-impact-with-fortis-bank-and-bnp-paribas---quick-facts-20120207-00062" style="font-size:1.2em">Ageas Outlines Settlement Impact With Fortis Bank And BNP Paribas - Quick Facts</a> <br> <span style="color:#888888;">NASDAQ</span> - <span style="white-space:nowrap">4 hours ago </span> <div style="width:80%;">(RTTNews.com) - International insurance company Ageas (AGESY.PK) Tuesday outlined the impact of the settlement with Fortis Bank and BNP Paribas.</div> </div>
Daily Report: Aussie Soars after RBA Pause, Euro Soft on Greece
<div style="padding:0px; margin-bottom:1.5em;"> <a href="http://www.actionforex.com/action-insight/market-overview/daily-report:-aussie-soars-after-rba-pause,-euro-soft-on-greece-20120207159008/" style="font-size:1.2em">Daily Report: Aussie Soars after RBA Pause, Euro Soft on Greece</a> <br> <span style="color:#888888;">Action Forex</span> - <span style="white-space:nowrap">5 hours ago </span> <div style="width:80%;">Aussie jumps sharply today and hit new record high against Euro after RBA unexpected left rates unchanged at 4.25%. The RBA unexpectedly left the cash rate unchanged at 4.25% in February, in contrast with consensus of a rate cut by -25 bps.</div> <a href="http://www.ibtimes.com/articles/293874/20120206/weekly-summary-usd-eur-gbp-jpy-aud.htm">Weekly Summary on USD, EUR, GBP, JPY, AUD, CAD, MXN and RMB</a> - <span style="color:#888888">International Business Times</span><br> <a href="http://www.finnewsnetwork.com.au/BrokerCommentry/659/FX-Technical-Outlook-%7C%7C%7C-Monday-6th-February">FX Technical Outlook - Monday 6th February</a> - <span style="color:#888888">Finance News Network</span><br> </div>
EUR/USD - A Descending Triangle Pattern Emerges
<div style="padding:0px; margin-bottom:1.5em;"> <a href="http://www.actionforex.com/index.php?option=com_content&view=article&id=158995:eurusd-a-descending-triangle-pattern-emerges&catid=191:daily-forex-technicals" style="font-size:1.2em">EUR/USD - A Descending Triangle Pattern Emerges</a> <br> <span style="color:#888888;">Action Forex</span> - <span style="white-space:nowrap">9 hours ago </span> <div style="width:80%;">EUR/USD has been testing the patience of traders for the better part of 2-weeks now, chopping around in a 200 pip range between 1.3030 and 1.3230.</div> </div>

yen carry traders. This coupled with the recent appreciation in the yen has left two exit routes for traders - book losses by squaring positions or hedge the trade using swaps.

India and Yen carry trades

Several funds investing in India have raised money from the Japanese market, for example, Fidelity Investments, Deutsche Asset Management and several others. Japanese money has also entered Indian markets through Japanese and other investors who are borrowing yen to invest in Indian asset classes, and corporates borrowing yen denominated funds.

Excessive speculative funds in the economy, caused in part by yen carry trades, have raised the inflation rate to 6.7% and, may lead to overheating of the economy.

Unwinding of Yen Carry Trades

The recent appreciation in the yen will compel traders to sell their assets and repay borrowed yen, leading to a fall in asset prices and further strengthening of the yen.

In October 1998, a mass unwinding of yen carry trades lead to excessive volatility in financial markets. During that period the yen had been depreciating over three years. Mid 1998, the yen began to appreciate finally leading to a mass selling of high-yielding assets and underlying currencies to repay yen denominated borrowings. This led to a sharp appreciation in the yen (due to bulk buying of yen for repayments) and also led to a steep fall in high-yielding asset prices (due to bulk selling). The Federal Reserve was forced to reduce the fed rate twice to bring liquidity in the markets.

Currently, hedge funds have low exposure to forex carry trades as against in 1998, when yen carry trade was a very popular strategy for hedge funds. Overall, the current quantum of yen carry trades seem lower than those during the 1998 period, even then, a possible future mass unwinding of yen carry trades would most definitely create volatility in the markets. For an Indian investor, this is just one of the unexpected effects of increasing globalisation!

Fatima Jiwani is the author and webmaster of Global Information Centre For more infoClick Here!

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GBP/USD and EUR/GBP levels?
<div style="padding:0px; margin-bottom:1.5em;"> <a href="http://www.forexlive.com/blog/2012/02/07/gbpusd-and-eurgbp-levels/" style="font-size:1.2em">GBP/USD and EUR/GBP levels?</a> <br> <span style="color:#888888;">ForexLive (blog)</span> - <span style="white-space:nowrap">6 minutes ago </span> <div style="width:80%;">By Joe Brown || February 7, 2012 at 11:43 GMT Take a 5 minute survey to help us stay in tune with readers and keep the site fresh.</div> </div>
Gold Prices Dropped while Silver was Unchanged ? USD Up vs JPY but Down vs EUR <b>...</b>
<div style="padding:0px; margin-bottom:1.5em;"> <a href="http://www.bestsyndication.com/?q=20120206_futures_forex_signals_gold_euro_dollar_yen.htm" style="font-size:1.2em">Gold Prices Dropped while Silver was Unchanged ? USD Up vs JPY but Down vs EUR <b>...</b></a> <br> <span style="color:#888888;">Best Syndication</span> - <span style="white-space:nowrap">36 minutes ago </span> <div style="width:80%;">(Best Syndication News) Brent crude oil advanced today as tensions between Iran and the United States continued to fester (see forex and commodities charts below).</div> </div>
Forex Flash: EUR/USD estimated downside to 1.1500 end of 2012 ? UBS
<div style="padding:0px; margin-bottom:1.5em;"> <a href="http://community.nasdaq.com/News/2012-02/forex-flash-eurusd-estimated-downside-to-11500-end-of-2012-ubs.aspx?storyid=118984" style="font-size:1.2em">Forex Flash: EUR/USD estimated downside to 1.1500 end of 2012 ? UBS</a> <br> <span style="color:#888888;">NASDAQ</span> - <span style="white-space:nowrap">52 minutes ago </span> <div style="width:80%;">FXstreet.com (Barcelona) - January witnessed the bloc currency surge from sub 1.2650 levels to the 1.3230 region. Better-than-expected key economic indicators in the euro zone, successful bond and T-bill auctions in Germany and peripheral debt markets ...</div> <a href="http://www.thestreet.com/story/11403437/1/euro-reversal-to-gather-pace-ahead-of-ecb-sterling-holds-tight-range.html">Euro Reversal To Gather Pace Ahead Of ECB, Sterling Holds Tight Range</a> - <span style="color:#888888">TheStreet.com</span><br> </div>
Greece sells 812 mln euros of T-bills, yield eases
<div style="padding:0px; margin-bottom:1.5em;"> <a href="http://www.reuters.com/article/2012/02/07/greece-tbills-idUSL5E8D724720120207" style="font-size:1.2em">Greece sells 812 mln euros of T-bills, yield eases</a> <br> <span style="color:#888888;">Reuters</span> - <span style="white-space:nowrap">1 hour ago </span> <div style="width:80%;">* Yield drops 4 basis points to 4.86 pct * Bid-cover 2.72 vs 2.80 in Jan * Needs to roll over 1.0 bln eur of T-bills Feb 10 ATHENS, Feb 7 (Reuters) - Greece sold 812.5 million euros ($1.06 billion) of six-month T-bills on Tuesday to fund the rollover ...</div> </div>
Euro Slightly Lower As Greek Debt Talks Linger
<div style="padding:0px; margin-bottom:1.5em;"> <a href="http://www.actionforex.com/index.php?option=com_content&view=article&id=159050:euro-slightly-lower-as-greek-debt-talks-linger&catid=193:daily-forex-fundamentals" style="font-size:1.2em">Euro Slightly Lower As Greek Debt Talks Linger</a> <br> <span style="color:#888888;">Action Forex</span> - <span style="white-space:nowrap">2 hours ago </span> <div style="width:80%;">In a thinly traded session devoid of key eco releases, attention went to the tribulations surrounding the Greek bail-out package. So some risk-off buying and maybe some short covering following Friday&#39;s correction led to modest daily gains.</div> </div>
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EUR/GBP Forecast February 7, 2012, Technical Analysis
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Ageas Outlines Settlement Impact With Fortis Bank And BNP Paribas - Quick Facts
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Daily Report: Aussie Soars after RBA Pause, Euro Soft on Greece
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EUR/USD - A Descending Triangle Pattern Emerges
<div style="padding:0px; margin-bottom:1.5em;"> <a href="http://www.actionforex.com/index.php?option=com_content&view=article&id=158995:eurusd-a-descending-triangle-pattern-emerges&catid=191:daily-forex-technicals" style="font-size:1.2em">EUR/USD - A Descending Triangle Pattern Emerges</a> <br> <span style="color:#888888;">Action Forex</span> - <span style="white-space:nowrap">9 hours ago </span> <div style="width:80%;">EUR/USD has been testing the patience of traders for the better part of 2-weeks now, chopping around in a 200 pip range between 1.3030 and 1.3230.</div> </div>

Simultaneously buying one currency and selling another.