Cdm,
Great points I agree if the approval comes through EUR/USD would continue higher but this might not mean a higher AUD/USD also.
Some European indices are trading at a multiple of 10 and if this is indeed a bottom on the EUR the funds could flow from treasuries, Repos, Bank deposits and hot currency plays like the AUD. I pointed out briefly last week about correlation between EUR/AUD and AUD/USD and if we start to see EUR optimism take hold the chart would reverse like clockwork. Now I agree historically EUR/USD and AUD/USD have followed each other in synch (especially during 06-08' but the EURO has been hammered so much I am relying more on the EUR/AUD AUD/USD inverse correlation to play out here if flows really do shift back to Europe. See below as this year's correlation coefficient reading has been near -1 YTD
Great points I agree if the approval comes through EUR/USD would continue higher but this might not mean a higher AUD/USD also.
Some European indices are trading at a multiple of 10 and if this is indeed a bottom on the EUR the funds could flow from treasuries, Repos, Bank deposits and hot currency plays like the AUD. I pointed out briefly last week about correlation between EUR/AUD and AUD/USD and if we start to see EUR optimism take hold the chart would reverse like clockwork. Now I agree historically EUR/USD and AUD/USD have followed each other in synch (especially during 06-08' but the EURO has been hammered so much I am relying more on the EUR/AUD AUD/USD inverse correlation to play out here if flows really do shift back to Europe. See below as this year's correlation coefficient reading has been near -1 YTD