Current Account spread & EURUSD

Some more digging on EURUSD.

Doesn't look like there is much there to explain the current move #EURUSD #GDPperHour #ProductivityDifferential

Looking at another sensible explanation #EuroBoom2018 #Macron #Merkel -> doesn't look like having big historical explanatory power. QE tantrum (Fed 2013) might explain the pink area. Even though, I don't see strong causality. What do you think?

Considering relative importance of current account on % of total Balance of Payment, this graph must be telling something. (Pink areas: 1st Fed's QE, then ECB's).

Indeed, I've been a strong believer in the Central Bank's balance sheet building and deleveraging to explain EURUSD. In that paradigm, the upcoming Fed balance sheet reduction should be equivalent to ECB's QE, pushing therefore EUR down.

However, recalling that current account is only game in FX town (current account represents most of balance of payment), one must keep in mind that this graph is telling otherwise.

It would be like a mean reversion around a sustainable current account. FX would not cause current account, nor current account causes FX. Rather it would be each time FX is too extreme OR current account is too extreme itself, then this would cause reaction on the other variable. In other words, while ECB's QE was disturbing the mean reversion mechanism, EURUSD would have accumulated strong upward power, which would be expressing itself right now. In that case, interest rates spread would move the market only when current accounts are at sustainable levels. What do you think?