Q: Why would the EUR go up while the ECB has just cut interest rates?
A: Because the more overwhelming Forex event is the cancellation of the dissolution of the entire Euro-Zone, i.e. the cancellation of a popular/democratic vote about the Greek situation. Huge cancellation! (for now.) In other words, the people of Greece have no say at the present time.
Q: Why did US Equities rise today?
A: As usual, because the EUR/USD rose today and the supercoms maintain the arbitrage so that the difference between EUR/USD and US Equities is zero (within about 200 ppm or so. That is quite close to zero.) Also, the FED has communicated it will print US$ (printing press) easily and quickly if needed. (A stock traded in US dollars is worth 2x as much if there are 2x more dollars floating around after they have been printed from the FED printing press. Easy... not good, but easy.)
Q: Well in that case, what about the price of a fast-food hamburger?
A: 2x more, sorry. Math works. Sometimes it works against you. We hope your "salary" increases by 2x - ha ha.
Q: What will happen to EUR/USD ratio with all the political events?
A: Unfortunately, it depends on the success of the media on populations. If the EU can keep the Greek citizens deprived of a popular vote (anarchy) then the EUR/USD will go up for now based on that present-circumstance. If there is a popoluar vote, Greece will erase/default on any and all debt and simply say "goodbye" to the creditor banks, etc.
Q: Would someone start a war in the Euro Zone with all this?
A: Not today. That is currently impossible. Instead, all currencies would have less value than today. Simple as that. Printing presses would print money globally.
Q: Is that bad?
A: Only for wealthy folks, poor folks, and everyone in between. Everyone else would be OK... ... ... (?)
