21 Aug 2013
Flash: EUR moved high on risk off – BMO
FXstreet.com (Barcelona) - Stephen Gallo, Head of European FX strategy at BMO sighs risk off back in markets.
Key Quotes:
“Days like today, so far, remind us of what the “new breed” of risk off looks like: developing market weakness, equity market weakness and a general rise in sovereign debt yields. We’ve been here before, just not really in July or most of August”.
“The bulk of activity this morning in FX and rates in part appeared to be retracement from yesterday’s illiquid price action, whilst some of the moves also suggested a degree of pre-FOMC minutes positioning”.
“There is probably a multitude of non-macro factors which caused the sharp move higher in EUR/USD on Tuesday, so the retracement this morning is not hard to justify, but the modest move lower in the pair today taken alongside weakness in the commodity currency and equity spaces is an important reminder that there is an important “growth” trade attached Fed QE”.
Key Quotes:
“Days like today, so far, remind us of what the “new breed” of risk off looks like: developing market weakness, equity market weakness and a general rise in sovereign debt yields. We’ve been here before, just not really in July or most of August”.
“The bulk of activity this morning in FX and rates in part appeared to be retracement from yesterday’s illiquid price action, whilst some of the moves also suggested a degree of pre-FOMC minutes positioning”.
“There is probably a multitude of non-macro factors which caused the sharp move higher in EUR/USD on Tuesday, so the retracement this morning is not hard to justify, but the modest move lower in the pair today taken alongside weakness in the commodity currency and equity spaces is an important reminder that there is an important “growth” trade attached Fed QE”.