Market now focusing on events in emerging markets

The logic in the market is that any contraction in quantitative easing by the Federal Reserve will cause a flood of funds back to the US from international asset markets. If this starts to happen, it will obviously be bullish for USD/AXY (Asian currencies excepting the Yen). The FX market is treating the AUD/USD as a proxy for this trading idea, hence the big sell-off. Keep an eye on events in regional equity and debt markets for indicators of what’s likely to happen next.

  1. Hi Sean, Any thoughts on AUD/NZD? I am starting to fancy long there, I recall some smart people aiming for 1.15 goal on the downside from a month back. It seems quite close, and it could rhyme with your view on AUD/USD basing around 92….

  2. Thanx Sean, it rymes with my thinking and positioning.

    I just have started at new place, moved to Houston, so will not be able to give view on power until recreate models. Most probably untill Oct-Nov

  3. Hi Sean. Mate, my short order in EUR/AUD at 1.4350 got clicked just after the Chinese data. Do you still believe in this trade? What should be stop loss in your opinion. Thanks for your time mate 🙂
    Regards, Pete

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