Just read brief notes from two interbank FX analysts who are more or less saying the same thing (don’t they always!). Market pessimism has been very high in recent weeks and the lack of QE3 language has many suddenly jumping on the risk-aversion train. This pessimism is over done according to both, and while the EUR negativity is justified, the heavy selling of AUD, CAD and NZD is getting ahead of itself.
Doesn’t feel that way to me and I still think the danger is down but they may well be right and we see a correction first.
