Analyst Insights, Monday, 10th of August, 2020
As we have said in the past, a lower dollar is supportive for markets and the world economy. Currently the Euro has had one of the greatest runs against the dollar on record. And while one can debate the future value of the Euro vs the dollar, what is probably not debatable is the fact that nothing goes up or down in a straight line without corrections along the way.
And since equity markets have also had one of the best runs on record, one has to be very cautious on a forward basis, because a correction might also be greater that most of us can imagine.
So I would be looking for a correction in the Euro to see if equity markets will give way also. Both have gone up in tandem and chances are that both will correct in tandem.
The bottom line is that I would keep an close eye on the EURUSD pair, both for an opportunity of a correction in the pair, and also as a clue for what equities might do.
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