Why is the EUR/USD Not Rallying?
October 16, 2008
Unlike the other major currencies, the EUR/USD has not joined in the rally today. For currency traders looking for an explanation, the answer is OIL.
Crude prices have fallen for the third trading day in a row and have even broken below $70 a barrel. Since the beginning of the year, there has been a 70 percent positive correlation between oil prices and the EUR/USD.
Here are the charts to prove it. The first chart is the daily correlation, the second is the hourly.
Source: GFT Dealbook
Source: GFT Dealbook
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Posted in ECB, Federal Reserve, Forex News, US Dollar, US Economy, euro, euro oil, forex blog
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October 19th, 2008 at 9:25 am
Good article.. I hope this week eur/usd will go up
October 20th, 2008 at 3:21 am
Nice. Will Eur/Usd follow the downtred of oil for this week?
October 20th, 2008 at 10:43 am
The EUR/USD is not rallying because the media has the markets in fear mode. Think about it the media can say anything true or false and cause a panic sell off or a rally.