Tuesday, June 16, 2015

Euro: the New Yen?

In terms of carry trade it already is. We are not talking about that.

We are talking about a currency that rallies in risk off and sells off in a risk on mode. It has shown some strange correlation.

And it is not one off in this year itself, if I remember correctly. I discussed it some time back here.

More or this later. But it might well be the case.


  1. Are you suggesting EUR is a safe haven?

  2. It is showing behaviors in yen, definitely not as in dollars. So safe heaven is a bit stronger. The common things between yen, swissy and now euro are 1) low interest rate and 2) either backed by a strong institution and economy (like swissy), or has a domestic source of capital outflow (like yen).

  3. I don't even know what risk on/ off is anymore. Aren't bond selloffs supposed to be risk positive :(