World FX Heatmap: Dollar Bloodbath
Remember those days when the dollar plunging (and the yen surging) meant a daily unwind in the carry trade, and a plunge in stocks? Neither do wo. Stocks are valiantly trying to confirm they are the most useless instrument ever, with bonds surging, gold skyrocketting, and stocks... about to go green (which is only due to increased speculation by MS as we pointed out yesterday, that the Fed will announce QE2 in one week). In the meantime, implied correlation in FX is starting to follow that of stock, as global capital flows are now one.