Rising sensitivities in FX

There’s a real sense that pressure is building in the market. As Neil Mellor from Bank of New York Mellon wrote in research on Tuesday, the recent price action has, “highlighted the foreign exchange market’s sensitivities.” Reading through much of the excellent research I get sent, it seems clear that there are no easy explanations for some of the price gyrations, which you’d expect in the era of relative devalue trading.

Plausible arguments can be made for both why the EUR – and any other currency – might rise or fall.