There's Only One Chart That Really Matters for Currency Traders
- Dollar's direction versus euro is locked into borrowing costs
- Central bank, payrolls this week poised to set market tone
Will We See More Crises in Emerging Markets?
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During a week when central banking is the prime focus of the currency market, traders who were whipsawed in August are looking to their colleagues on interest-rate desks for clues about whether they should buy or sell the dollar.
The U.S. currency is increasingly moving in tandem with the difference between dollar- and euro-based interest rates. The 120-day correlation between euro-dollar and the gap between two-year swap rates reached the most since January.