Four currency regimes for the yen, loonie, pound and Australian dollar

A currency sits inside a market-regime

A single currency position is not a self-contained story. Intermarket-analysis reads the unit through linked markets such as equities, real estate, commodities, neighbor-economy growth, and energy, then places that unit inside a market-regime that can last weeks to months.

The moving-average is the confirmation step, not the opening forecast. It is a multi-week average of price used as a baseline to judge whether a currency has left a long downtrend or is only oscillating inside an old range.

The yen as an equity-and-property-linked-currency

The yen is described as the third most widely traded currency after the US dollar and the euro. It is described as aligning more closely with Japanese equities and real estate than with commodity production, so the archive treats it as an equity-and-property-linked-currency.

The yen is described as having declined steadily since 1995. Revival efforts after late-1980s equity and property bubbles are described as tending to favor a weaker yen.

The Canadian dollar as a commodity-linked-currency

The Canadian dollar is framed as responding both to US economic fortunes and to commodity-export prices, including forestry and energy. That mix makes it a commodity-linked-currency that also tracks the neighbor economy.

Retreating inflation and lower policy rates are cited as major contributors to Canadian-dollar weakness through the 1990s. A later lift is tied to a weaker US dollar and firmer energy prices.

Canada is described as posting 4.4% growth over the first three quarters of the referenced year and only one negative-growth quarter, versus three in the United States, with oil-price strength supporting the energy sector.

The pound checked by long-horizon averages

The pound is described as a major traded currency that still trails the yen and the euro. The archive notes a late-1970s surge, an early-1980s drop, and a later-decade rally.

Pound strength against the dollar over about one and a half years is tied to a first-half-2002 move above both the 50-week and 200-week moving averages, after which price sat in a 1990s-style range.

The Australian dollar and commodity demand

The Australian dollar is presented as a commodity-based currency used for exposure to minerals, farm products, and energy, and later as a possible beneficiary of Asian, especially Chinese, raw-material demand. That is another commodity-linked-currency, with the later driver sitting in Asian industrial demand.

After a long US-dollar bear market and a spring-2001 low near 0.45 US dollars, the Australian dollar is described as advancing more than 25%, clearing the 50-week average at the start of 2002 and the 200-week average at the start of 2003.

A contemporaneous Australian-dollar print of 58.70 US cents is described as a two-year high, with one-month peaks versus the euro and the yen and support from a weak US dollar plus high yields.

Editorial reading of the four cases

TradersWeek editorial reading: the four units do not share one driver. Pair the yen with equities and property, pair the Canadian and Australian dollars with commodity-export prices and neighbor or Asian demand, and treat the pound as a major traded currency whose regime is confirmed when it clears long-horizon moving averages.

The same moving-average test appears on both the pound and the Australian dollar. Clearing the 50-week and 200-week averages is used to ask whether the old downtrend has ended. In the pound case, price then sat in a 1990s-style range, which keeps the average in the role of a regime check rather than a price target.