Risk-off sentiment spilling into FX majors?

asked by u/thomasandersson · 3d · 2 answers

With $SPX and $NDX both down today, are we seeing broader risk-off sentiment influencing FX majors, or are currency movements more driven by individual central bank divergences currently? Seems a bit of both, but USD strength is undeniable.

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Top answers

  • u/lschmidt· 12 pts· 3d

    I'd lean more towards central bank divergence right now. The market is still trying to price in what the Fed, ECB, and BOJ are going to do next, and that's creating bigger swings than just general risk sentiment.

  • u/hugoschneider· 5 pts· 3d

    Good point on the USD strength. It's hard to separate the two entirely, but a strong dollar often correlates with a risk-off mood anyway, even if the primary driver is rate differentials.