Equities pushing the risk pairs higher. FTSE and CAC both up close to 1.0% pushing #EURUSD to re-test 1.3367 high

(Last Updated On: March 30, 2012)

Equities pushing the risk pairs higher. FTSE and CAC both up close to 1.0% pushing #EURUSD to re-test 1.3367 high.

 

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you bring up a real interesting point. My take is that equities often act as the cash market which often affects the movements of the zero sum markets (like spot fx). With equities moving higher, and traders/investors perceiving a less risky environment, this is partially driving the longs in the riskier currencies (i.e. long EUR).

If that is, indeed, your thinking, what’s your take with what’s been going on the last couple months in the Yen markets?

 

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Yes, equities seems to help dictate risk in thin markets. I didn’t think too much about the JPY while it was stuck between 75.50 and 78.00, but it seems like it has been moving as more of a USD play. We’ve seen it retreat a bit with the rise in gold and oil prices. The main focus with Japan right now is their monetary policy, which they expressed yesterday will remain “easy” which generally means they will continue to purchase bonds and add more paper money to the economy: weakening strength. I will be paying close attention to the commentary that comes out of the BOJ.
Thanks for the message.

 

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