Forex: Stimulus Wars Supports EURUSD Short, USDJPY Above 100?
• Stimulus wars overtaking traditional risk trends as the FX market's dominant theme
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Are the S&P 500 and other risk-sensitive benchmarks in a 'bubble'? It's likely, but that doesn't mean a chaotic unwinding is imminent. This is something we have had plenty of time to contemplate and verify and contemplate again. Meanwhile, as we try to untangle the timeframe for the inevitable risk reset, there is a more active FX driver in play: relative monetary policy changes - or I like to call it a 'stimulus war'. The ECB's dovish turn, the BoE's priced in 2015 hike, debate over the Fed taper and underappreciated rate hikes for the RBNZ are creating trends and volatility of their own. In today' Trading Video, we look at the market with a mind to stimulus and risk potential.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.