The big picture at the moment would seem to revolve around US investors, specifically those who bought overseas assets in bulk after QE1 and QE2. These investors are selling out of their overseas assets and are bringing their USD home, hence the big volumes of USD buying seen over the last week. We can only guess on what happens next, but I’m thinking that US stockmarkets should now find some new buyers as I doubt if this money will be happy to sit in a cash account for a lengthy period? In fact one analysis that I’ve just read suggests that commodities and precious metals may also benefit from an influx of buyers. These macro events normally take some time to work themselves out but are certainly worth bearing in mind.
