from a fundamental side it is easily conceivable for the euro to continue going up this year, if there are no systemic shocks to the global or European economy.
when looking at the markets in terms of risk and highest possible yield.......a stable global economy will continue to entice large amount of cash and investments into higher yielding assets. By this mechanism alone you will see a depreciation of the USD, the correlation of USDX against the Euro from 2009 to now is -.91, the correlation with equities is .68.
in a low rate environment capital will flight to greater return and less risk.
Bernanke has given the benchmarks to what will be the trigger to a interest rake hikes, so improving US growth, economic indicators and global economic conditions do not necessarily mean USD positive unless and when these interest rate hikes start to come into play.
as it stands right now it is conceivable for the euro to continue appreciating and this will be evident in the fact that 1.30 will serve as support, if we do not go below 1.28 then odds are we are not going to revisit 1.20 anytime soon.
when looking at the markets in terms of risk and highest possible yield.......a stable global economy will continue to entice large amount of cash and investments into higher yielding assets. By this mechanism alone you will see a depreciation of the USD, the correlation of USDX against the Euro from 2009 to now is -.91, the correlation with equities is .68.
in a low rate environment capital will flight to greater return and less risk.
Bernanke has given the benchmarks to what will be the trigger to a interest rake hikes, so improving US growth, economic indicators and global economic conditions do not necessarily mean USD positive unless and when these interest rate hikes start to come into play.
as it stands right now it is conceivable for the euro to continue appreciating and this will be evident in the fact that 1.30 will serve as support, if we do not go below 1.28 then odds are we are not going to revisit 1.20 anytime soon.
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