《外汇交易实战图表与交易心理》 作 者：(新加坡)许强 (美国)Gary Weiss

There have been many studies that have tried to quantify the effectiveness of intervention, particularly by a singular bank within a particular region. And broadly speaking, the consensus has been that there has mostly been very little quantifiable benefit. However, it is still true that many central banks, regardless of this opinion, still operate a reasonably aggressive intervention policy. The question as to why, goes to the point of what might be called the second type of intervention, which has to do with maintaining the currency value or peg, within an acceptable band over time. Notice in this definition, I refer to the “band over time” .

The reason for emphasizing this phrase is that unlike a concerted intervention that tries to achieve immediate results that correspond to a change in policy, singular bank intervention generally tries to reinforce or maintain the existing status

quo. This type of policy has been pursued over the years by a number of regional banks including the Bank of Japan, and Bank of China, who have been fairly successful in achieving their particular goals. But of even greater interest are the circumstances where maintaining the peg through intervention did not work. These situations eventually led to more broadly catastrophic events than might have been anticipated. Included within this category are not only some of the notable currency meltdowns that occurred in Latin America (most recently being Argentina) but also the more widely known episode with the Bank of England in the early 1990* s. In this situation, the Bank of England tried to hold the Sterling peg against the German mark at a level that was eventually breached via the component dollar equivalent trades being sold under the implied value of the cross that was being bid for by the central bank. On the day this level was breached it was widely rumored that currency hedge fund speculators, in particular those led by George Soros, were responsible. Still, the question remains as to whether the market moved because of Speculative hedge funds or, whether the true cause was the unsustainable nature of policy and intervention initiatives undertaken by the central bank in general. In this case, as with others, I would argue that the two are inextricable. Which of course goes to the issue of how and by what means are the trading positions of hedge funds of concern or even interest to the average speculator.

To address this point it is useful to view hedge funds as being, in many ways, the first level of critics to a central bankpolicy mandate in general. The reason for this is that hedge funds as a group are mostly concerned with valuation models that appear unsustainable. When analyzing broad policy, the issues of whether this disagreement can then be turned into a trading expression, is mostly how the larger hedge funds tend to formulate their decisions. The situation involving the Bank of England was a classic case of just this type of dynamic. Prior to the breakdown of price support for the Pound Sterling a gainst the Deutschemark, the Bank of England had intervened unilaterally on multiple occasions, for the purpose of supporting the currency against the perceived outside policy band at the time. The hedge funds, did not take immediate action at this stage however, but rather chose to watch the situation unfold. During the initial phase of the exercise, the policy of the Bank seemed to hold.

Only after watching the market for a number of days however, did the hedge funds come to realize that the intervention would be unsustainable. This led to the hedge fiinds betting in huge numbers against the success of the single bank being able to support the rate on a unilateral basis. In doing this，the hedge funds chose a very particular sense of timing and began to sell increasingly larger amounts of sterling at the end of the European trading day. Additionally, these trades were mostly executed through dollar equivalents as opposed to the outright cross rate. The thinking of course, was that these two trading parameters would be the most difficult for the Bank to defend against. Which, of course proved correct. The point here however, is that even though hedge funds can trade in sizethat is big enough to move the market, often times these trades are done in a reactive mode against a view towards unsustainable policy. This means, once again that the real issue for trying to follow the impact of a hedge funds trading, may actually go back to an analysis of the underlying economic environment in the first place.

Against this backdrop of action versus reaction between the central banks and the large hedge funds that try and second guess their policy initiatives, is the environment for “cor porates” or what might be termed as real money users of the foreign exchange market. In this case, as opposed to the two other types of trading vehicles, corporate users, access the foreign exchange market usually for the purpose of physically transferring funds, or, in certain situations, to hedge against price movements related to production activity in the future. Unlike the central banks and hedge funds，however, the trading related to this specific group of users is not necessarily indicative of price movements in the future. The reason for this tends to relate, interestingly to the issue of leverage. When a corporate user trades foreign exchange it is usually for a specific amount that will eventually be physically delivered at maturity, or for an amount that represents the same.