What is the prevailing factor in the currencies market: dollar direction or carry trade?

Posted on 18. Oct, 2016 by Jean Jacques Ohana in Weekly Focus

The currencies markets have experienced successive wild moves since 2010 (figure 1) due to the following events:

2010-2012: The Euro Zone Crisis weighs on the euro (EUR) exchange rate.

2012-2015: The Japanese yen (JPY) devalues following massive quantitative easing undertaken by the Bank of Japan.

2014-2015: The US dollar (USD) appreciates after the Federal Reserve starts to taper [...]