I tend to look for alternate ways to look at things to what appears to be the mass media take on things, and what I gather is also the prevailing view of traders.
I think that attitude is part of what adds the "Edge" to Global Edge Investors
So I make no apology for going against "perceived wisdom". In fact I strive to do that.
OK, lets examine the case. First, lets view the same currencies relative to the Euro:
Just looking at that, is that a simpler or more complex picture compared with the one relative to the Yen:
To me, part of the aim is to simplify the picture.
Now, what do these currencies have in common: US$, GBP, AUD, NZ$ ?
I'll give you a clue:
They are all debt countries. To me, that puts them together as a group.
How about the Yen ? That's not a debt country. That's a money 'exporter'.
That's why I like to view the currencies relative to the Yen. To me it often makes a simpler picture, and it shows the relationship between money import and money export countries.
Now, view this for NZ as an example:
The blue is a massive Yen carry trade winding up. The red is the potential unwind. Repeat that picture for all the money import countries.
That is why they talk about the Yen carry trade as being another "weapon of mass destruction". (or similar expression).
Now what about the US$ Index.
What exactly is the point ?
It's mainly the US$EUR. It's not even trade weighted, which is why Jim Sinclair uses a different index.
What is ridiculous is rejecting alternate views out of hand without thinking about it. They may have merit you don't yet see.
And IMO finding that new insight that may be contrary to the mainstream media view is one thing that can give us that "edge".