Investors take profit on long dollar/yen trades

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By Beth Shah
25 Aug 2014

Some market participants have been unwinding long options positions on the dollar against the yen in a bid to take profit as the Japanese unit has steadily weakened against the greenback. At the end of last month, $/¥ was trading at 101.36. On Monday, spot on the pair was 104.28.

On 30 July, strategists at Credit Suisse suggested buying three-month 30 delta $/¥ calls struck at 103.75. The trade cost 0.62% of $ notional and was recommended as an emerging market fx hedge against a pick-up in hawkish Federal Open Market Committee policy expectations.

Since the trade ...

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