Well now. It appears many things are coming together for my EUR/USD short. I check out FT for one last bit of reading before I call it a day and I come across this.
Now that is certainly something. The highlights:
"Senior eurozone officials believe that the dollar-euro rate had reached levels unhelpful to both the US and Europe."
"The US is still a long way from agreeing to intervene in currency markets or identifying desired exchange rates. But both sides believe fundamentals and central bank policies are turning in the direction of relative dollar strength. After cutting interest rates aggressively, the Federal Reserve has indicated its desire to pause. Meanwhile, the ECB is softening its hawkish tone, and could shift further if weaker growth reduced inflation risk."
"The central banks have not co-ordinated their policies to manage the exchange rate. But policymakers feel communicating the change in relative fundamentals and monetary policies may be effective"
I'm curious if officials agreed to come out like this in hopes of sidetracking oil. Macro Man and Brad Setser both have been writing about how central banks that were dollar sellers have turned dollar buyers in the past couple of weeks. And we also have a recent string of negative economic data coming out of the Eurozone. I'm thinking EUR/USD can see sub 1.50 in the next month. And I'm positioned accordingly to take advantage of that.
