QuoteDisliked3. Please explain more about crude dropped 2 days before EUR/USD drop?
While we were rallying on future interest rate hikes the market chose to ignore sovereign debt. When Trichet finally came out dovish on interest rates, which was way out of line with market expectations. Participants speculating on future interest rate hikes suddenly no longer had a reason to be long. All that was left was bad sovereign debt news in an overall overbought market. Combine this with margin hikes and commodity sell offs and you have yourself a very risk off environment.
This is just a loose generalized interpretation off the top of my head. If someone would like to correct me or elaborate feel free.
Cautiously optimistic. . .