- EUR/USD relief rally on EU measures. Long run underlying problems not addressed.
- Market reaction - Risk On eg UST and Bund yields up, equities up, gold down, EUR/JPY up.
- Of all the Risk On trades going on now, the EUR/USD rally is the most suspect. Good reason for others eg unwinding of flight to quality from UST (and Gold) also supported by strong US data, selling bunds due to impairment from rescue, equities up on removal of contagion fears, etc. [Looks like too hasty in shorting S&P earlier].
- In other words, not all Risk On trades are created equal.
- Am going to scale into short EUR/USD very very slowly and allowing a very big range on top to sell into. Started at 1.3066 today.
12 comments:
From Barclays FX via FT Alphaville..
http://ftalphaville.ft.com/blog/2010/05/10/224816/the-smell-of-burnt-fingers-wafts-across-europe/
-1.3044 .. average in rate 1.3055
-1.2922
+1.2832
-1.2867
-1.2811
-1.2784
I thought you had shorted EURUSD at higher levels?
Took profit last week between 1.28 and 1.2950 before the Thurs blow up.
eur/usd is eventually going to 0.90 ... because i can't believe that a half an hour taxi ride from the airport costs eur65 !
Hahaha .. if that's the case then :=
1 hour taxi ride from Shanghai airport costs RMB 180
ie EUR 65 = RMB 90
EUR 1 = USD 1.27 = RMB 90/65
USD 1 = RMB (90/65)/1.27 = RMB 1.09 !
Yes I agree that EURUSD is going lower. My prediction is parity against USD. But first it must break the 4 year low at 1.2500.
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