100430 DrFX Daily Briefing - Some important comments about RA

“You must build the following into your relational analysis.  There are core drivers that cause natural directional moves over time but more prevalent is the very short term naked speculation that feed on and leverage the core drivers and this cause the type of gyrations we see inside our grids.
The other thing that naturally may cause it is the economic growth differential and potential for the Fed to begin earlier than the ECB to normalize rates, and thus rate differential expectations.  Since these expectations build in a multi month, even multi year increase in rates that may be quite dominant in determining the directional drift (down)… In the euro's favor, which will limited such a "drift" down, over time is the ECB inflation fighting mandate which makes it easier for them to hike rates on any sight of inflation or at least talk dirty about hiking rates”.