The Fed cuts the discount and the fed funds rate both by 1/4 point.
While there was a "knee jerk" reaction at first...later on, stocks rallied, the dollar dropped, the yen dropped, the swiss franc rose and the aussie dollar rose.
So as stocks rallied, it re-ignited the carry trade which brought fresh sellers into the yen and into the high yielders once again. So most things are against both the dollar and the yen. On the usd/jpy pair, the dollar is heading higher which tells me that the yen is getting taken to the whipping post worse than the dollar is.
If you're a reader of my money trader service, then you know that we just exited a very profitable position in USD/JPY.
As of this writing, the Dow is up 145 points which has really helped the EUR/JPY carry trade for instance. So this is where traders are long/buying the EUR/JPY pair.
Right now there continues to be a coupling of the Dow Jones Industrial Average and the EUR/JPY pair. They still tend to trade somewhat in tandem with each other.
So the Dow up, Yen down....Dow down, Yen up scenario lives on.
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