How have investors coped with 'lizard risk' of euro collapse?

The first question to answer when discussing the 2013 FX outlook is whether risk on – risk off (RORO) will continue to dominate financial markets. Since the Lehman collapse, markets seem to alternatively believe in either total meltdown (first banks, later the euro), or an ongoing recovery. In this environment, local developments have less impact on currencies, and getting the general risk sentiment right is the most important call. There are reasons to believe that RORO will be less important going forward. The global financial industry is no longer on the edge of a meltdown, and the...