1. [Presentation]
Silver & USD/JPY
[Prepared by: Mohammad Adnan]

2. FXCM
• Forex capital markets
• Established in 1999
• Works in more than 20 countries
• One of the top three brokers in the world
• Shares of FXCM are floated in NYSE
• Regulated by:
NFA (USA)
FSA (UK)

3. Silver
• Ag
• Soft, White Precious Metal
• Used in used in currency, decorative items, and mirrors
• Symbol XAG/USD
• Trading unit $/T.OZ
• Standard lot 5000 T./OZ.
• Exchange COMEX

4. History
• Mining of silver began 5000 years ago
• Roman currency depended on silver
• Chinese Empire used Silver as a medium of exchange
• Silver Standard was used in 19th century

5. Demand
• 1040.6 Million Ounces annual global demand
• Top silver consumers (2010):
USA 21.6%
China 14.5%
Japan 11.6%
India 10.7%
• Uses:
Industrial 46.8%
Photography 6.4%
Jewelry 15.4%
Coins and Medals 11.4%

6. Producers
• Top three producers of Silver:
Mexico 152.8 M Oz
Peru 109.8 M Oz
China 103.9 M Oz

7. Price action of Silver
Net increase of 100% in value of silver in
last 5 years

8. Rise in Silver prices?
• When dollar is weak Silver is used as an hedge against
inflation
• Increase in industrial demand of silver
• Decrease in supply of Silver
• Correlation with Gold

9. Reasons for investment in Silver
• Hedge against inflation
• Safe Haven asset
• Poor Man’s Gold
• Average annual return of silver has been 88%
roughly is last 5 years
• Prices are expected to go up:
#China Net importer
# Demand supply mismatch
# New uses of silver
# No recycling and quickly increasing
silver production

10. Forecasts
• Upward trend is expected in prices of silver:
Increase in Industrial use
Increase in Demand by China
Global economic problems

11. US Dollar/Japanese Yen
• USD/JPY
• Bank of Japan
• 3rd most traded currency globally after Dollar and Euro

12. History
• Officially adopted in 1871
• After world war II Yen was fixed at 360
USD/YEN
• This continued till 1971 when us started Free
floating exchange rates

13. Price action
High 110 low 76, A downward trend

14. Intervention by Bank of Japan
• Export based economy of Japan so devalued
yen can result in favorable current account
balance
• BOJ intervenes to devalue Yen whenever its
on the rise
• The value of increases due to Japanese trade
surplus and Net Inflows of Yen
• BOJ intervenes through asset purchase
program to devalue Yen

15. Reasons for Investment in USD/JPY
• Safe haven
• Continuous intervention by BOJ ensures that
USD/JPY value increases
• Lowest interests rate in Japan means no
strengthening of yen

16. Forecasts
• Price of Yen is expected to go up:
BOJ intervention
Pressure of Automobile giants Mitsubishi
Toyota and Honda.