Derek Halpenny Interest Quotations

There is no more obvious way to play interest rate differentials than buying dollar/yen.

Given the rhetoric we've seen from the government today, the pressure, beyond moving away from quantitative easing will be very, very much on the BOJ to maintain a zero interest rate structure.

His number one objective will be to stress continuity. Continuity means more interest rate increases, so that means the dollar can keep going up.

There has been a shift this week towards expectations of another U.S. interest rate rise in March -- the interest rate differential is there and it is helping the dollar.

We could argue possibly that we've seen a little bit of stability since we've had the interest rate cut out of the way. Certainly the market is not as convinced over the need for further substantial monetary tightening in the UK.

Any shift in policy on Thursday from the BOJ is very likely to be accompanied by a strong commitment to maintaining zero interest rates. There is no trade more obvious than selling the yen against the dollar.

The market is now beginning to look beyond the potential first step in terms of a shift from quantitative easing to interest rate targeting.