Currency Intervention From Japan & Switzerland, Protecting the Dollar from the Dollar (YCL, FXY, JYF, FXF, FXE, UUP)

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The Japanese Yen took a breather today on some similar news that we saw last week regarding intervention.  The Nikkei News reported this afternoon that Japan was about to intervene to keep from further Yen appreciation coming against the U.S. Dollar.  We saw a similar announcement last week that the Swiss Central Bankers warned that they would have to intervene if the Swiss Franc strength continued.  Citizens love having a strong currency when they travel because everything is artificially cheap, but having an inflated value in a currency makes it difficult to sell goods and services into the international trade markets.

ProShares Ultra Yen (NYSE: YCL) was down 0.2% at $36.85 against a 52-week range of $29.76 to $37.40.  CurrencyShares Japanese Yen Trust (NYSE: FXY) was down 0.2% at $127.87 against a 52-week range of $114.11 to $129.26.  WisdomTree Dreyfus Japanese Yen (NYSE: JYF) is more of a money market rate Yen fund and it was down 1% at $33.34 versus a 52-week range of $30.12 to $34.11.

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As far as the Swiss Franc, it hit another new high this morning per the ETF… The CurrencyShares Swiss Franc Trust (NYSE: FXF) was up 0.4% at $126.34 against a 52-week range of $93.57 to $127.99.

Will the European Central Bank be the next to intervene?  Can it even afford to worry about exchange rates with all of its woes with the lands of the PIIGS?  As far as the Euro ETF, the CurrencyShares Euro Trust (NYSE: FXE) fell 0.7% to $142.00 versus a 52-week range of $125.71 to $148.81.

The PowerShares DB US Dollar Index Bullish (NYSE: UUP), which is meant to effectively rise and fall with the U.S. Dollar Index, was up 0.55% at $21.15 today.  We have brought this up before about a speculative ‘flight to safety bubble’ being seen in the Swiss Franc.  Perhaps the same is happening in the Yen.

It turns out that a race to zero in the world of currencies doesn’t do anyone any good if the Americans can’t afford to buy manufactured goods from nations.

JON C. OGG

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