Are Currencies Sending a Key Portfolio Construction Message?
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When the Euro-Dollar and Australian Dollar head higher, the majority of the time they impact risk assets in a positive way and put downward pressure on the U.S. Dollar. This morning the Euro-$ and AU$ are both attempting to break above falling resistance lines that have been in place for almost 18 months.
These currencies are often quality leading indicators for important macro moves. As the media hopes to keep investors focused on the "Fiscal Cliff", we should keep at least one eye on what these important currencies do, because their message could be much more important than what is being fed to investors by the media!
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