Shorting the Euro on here. Someone's bound to start taking profits and this is too fast for too short of a time. Looking for a drop back to 1.2350 in a couple of weeks if that.
GF - I saw ECI as very tame as well. Doesn't change the fact that the Fed will hike in May to 5%, then pause, and the ECB will probably not hike at all because, as you say, they don't want a stronger euro. I also agree with your synopsis on the RBA hiking. At the end of the day, maties made an excellent point: "For every $10bil I leave in a US bank will provde me with $259mil more in one year than in the EU Bank." Rates may be pausing in the US, but no one has said they will be done there. In fact, Bernarke stated the opposite actually - a pause doesn't mean we're done. When does anyone expect the EZ to hit 5%? How about 4%? I continue to maintain that this latest EUR craze is based on emotional fallout from the G7, with some diversification mixed in for good measure.
I think your correct. I think there has been a deliberate attempt to weaken the dollar: G7 comments (who are the asian currencies going to strengthen against...umm let me guess their main trading partner the USA), Fed governers warning of a pause. It changes the way we intrepret data, by saying we'll stop raising rates despite positive data. Whereas, before the interpretation of that data would have been dollar positive.
What supports a market is humans buying the market at higher prices. Fundamentals could be totally against the particular market and prices will still rise to due human sentiment. Best not to be an economist--just be a trader.
a phrase once coined comes to mind: the market stays irrational longer than that you can stay solvent you can be right on the market but if your timing is off then you are nowhere - this is the challenge with options: not only the handicap of getting the direction and move right but also of getting the timing right. Maria
And now the rumors in the market are flying about the ECB holding because of the strong EUR. Self defeating prophecy. Drive the EUR up because of rate increase expectations, only to find it was the drive up that prevented the rate increase.
You mean holding, as in not raising rates? I think Eur/Usd just wants to iht 1.2590 for its ambition to be fulfilled. I cant believe there is anyone else out there to be long?
Yes. It was inevitable - the ECB fears a strong Euro, and will not raise rates because the effect a strong euro will have on the highly dependant export market of the EU will be similar to raising rates.
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