The pair trade of this era is Long Japanese Yen, short Yuan, basically betting that hot money flows out of China back to Japan. Both trades are at multi-year highs with speculators...
Meanwhile, Fed chair Yellen, in her testimony to Congress tomorrow can't win. If she's too hawkish, the dollar rises, hammering commodities and exporters. If she's too dovish, she hammers banks and further weakens dollar/Yen.
For its part, the ECB's negative interest rate policy is doing its best to demolish European banks, now at multi-decade lows. And the next ECB meeting isn't until March 10th.
All four Central Banks are totally out of ammo and the markets are totally ignoring them now.
Yen bulls are at a five year high:
Japan's current account (trade) surplus of 3% of GDP overrides BOJ easing.
"Their latest easing to -.1% is insignificant"
"The trend in the balance of payments will remain the primary driver"
"We are looking for Fed Chair Yellen to indicate recovery is on track, if she notes economic weakness, that will further pressure Dollar/Yen and Dollar/Euro"