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Insight - Making Sense of the Narrative


Markets are often emotional things, never more so than last Saturday, when England produced a fantastic performance to beat the favourites New Zealand in the semi finals of the Rugby World Cup in Japan.

The $ has lost momentum, as have the major $ bond indices, all of which have had a tremendous run year to date,

Sterling is rallying for market reasons more than politics, but the DXY is rolling over suggesting a possible rotation back to non US Equities is coming.

The following post is a long form read about the principles of Market Thinking as applied to currencies.

The sharp response in markets to assorted mildly positive news items was less a vote of confidence and more a reflection of a lot of hedges (against things ‘ we know for certain to be true’) catching fire if not blowing up entirely.