Looks like traders are opening up the playbook that they used successfully for much of 2009, trading the USD and JPY in lockstep with the S&P 500. When stocks go down, buy USD and JPY and sell them when they go up.
It’s been the biggest down-day of the year on Wall Street and we’re seeing risk reduction across the board. Oil (-$1.25 at 81.25) and gold (at $1140 from $1158) are sharply lower on the day and even copper has taken a rare tumble. Chinese monetary tightening has thrown a wrench into the works of the reflation trade, it appears.
1.4460/65 is the key spot on dips if EUR/USD loses additional ground.
