EURUSD and GBPUSD Rally Flimsy, Will US GDP Support Risk On?
After the hearty risk aversion move made at the start of this week, EURUSD and equities were prone to a correction. However, the volatility of the realized turn was particularly surprising. What was the catalyst behind this move? A move of the magnitude seen with EURUSD, GBPUSD and AUDUSD would suggest a dramatic change in risk appetite and/or definitive progress on the Euro-area financial crisis. Neither were realized Thursday. The market seems to connect the market's swell to comments that were made by ECB President Draghi, but the content didn't stray from the standard comments made by policy officials for months. If this is a mere corrective move, these markets are highly exposed to further fundamental developments - like Friday's US GDP reading.