If this is a W Shaped Recovery and the next wave is upon us…
If we are facing a W Shaped recovery, how do you think the FX markets will react this time? Will the dollar strenghten again (like the fall of 2008), or will the next downturn sink the dollar? If it is a W Shaped recovery, which currencies will strengthen in round 2?
I suspect we will se the dollar plummet and the EUR and AUD strenghten. MikeyD

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forget the EUR. Here u will c in the next time only read news
little update :
If euro-dollar continues to move upward so volatile ahead of the G-20 summit in November, so action at the time of the summit are expected, “said Amelia Bourdeau, Währungsstrategin at UBS
well i have to disagree. since everybody is obviously holding stocks, commodities, currency bets, financed by low yielding usd. it would be a natural thing that with the idea of a potential w shaped recovery people stock markets, commodities, carry trades would see sharp corrections to the downside, so usd would have to be covered and since everybody is one the same side it would become an ugly move to the upside…
Read the Deutsche Bank paper on “creditless recovery” for clues…based around Guillermo Calvo´s work…interesting!
Here is the link: http://www.dnb.nl/binaries/Working%20paper%20218_tcm46-220409.pdf
Saferanger, thanks for the article.
I have a feeling that the next leg down will hit us in the next two weeks. Just a Vegas like feeling, other than the bad UK news on Friday, I don’t have a lot of data to back up my hunch.