Easy come, easy go. EUR/USD is pretty much back where it started in New York after a short-lived rally following the ADP report and the opening of the equity market in the US. Those stock gains have faded as well, alas. As noted yesterday, the reflation trade seems to be well-subscribed at the moment so a shakeout in both the stocks and currency market may be needed before further gains.
The Euro looks likely to be a laggard if and when any reflation rally resumes. Selling dollars against almost anything (except the JPY) had been an easy way to play the reflation trade. We have entered a phase where traders will have to be more choosy. The trouble is the currencies of choice, like AUD are among the more crowded trades.
We may need a signficant correction before more “easy” money can be made.