"The chart shows the correlation between EUR/USD and interest rate differentials - which collapsed at the start of 2015 but has now recovered, and in Q4, it's the short rates which are once again dominant.
Correlation isn't the same as causation, but we are back in a similar
world to the one we saw before this year, when a 1% move in 2-year
rates was associated with a 12-figure move in EUR/USD.
On this super-simple measure, it would take a move in 2-year
US rates to 2%, to drag EUR/USD to parity. That should happen in H2."
