I’m just thinking about this and the more I think about it the more I feel that we all don’t know how 2014 will end. First of all, we have geopolitical tensions that are rising, particularly in Asia. Who knows what this will lead to? I don’t think that a war will occur, but the tensions could escalate to a point where they would have some impact on the Asian economies and on the currencies of the Asian economies, notably the yen.
So, whereas I admit that to short the yen is an extremely crowded trade at the present time, everybody is short the yen and long the Nikkei, I still feel there is a good chance that the yen will continue to weaken. That would be favorable for the US dollar.
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