Back
26 Feb 2013
Forex Flash: EUR/USD attracted to 1.30 like a temporary magnet - Societe Generale
Kit Juckes, Global Head of Currency Strategy at Societe Generale comments that uncertainty is the Euro’s arch enemy and the only good news today is a dearth of economic data or auctions to add to the market’s fears.
He writes, “Tomorrow’s 10yr auction in Italy is the next focus. Technically, as discussed yesterday, EUR/USD looks awful having failed to break back above 1.3250 and 1.30 is today’s magnet. It won’t hold for long....”
He continues to remind us that the European news shows that the UK still has some safe haven virtues, with the Pound bouncing on a classic “sell the rumour, buy the news” reaction to the downgrade over the weekend, but ultimately, he feels that it has fallen as much as it can. He finishes by writing, “If EUR/USD breaks 1.30, GBP/USD could well follow it down, and if today’s CBI Distributive trades data are soft, that won’t help. The most fashionable UK assets today are likely to be index-linked gilts.”
He writes, “Tomorrow’s 10yr auction in Italy is the next focus. Technically, as discussed yesterday, EUR/USD looks awful having failed to break back above 1.3250 and 1.30 is today’s magnet. It won’t hold for long....”
He continues to remind us that the European news shows that the UK still has some safe haven virtues, with the Pound bouncing on a classic “sell the rumour, buy the news” reaction to the downgrade over the weekend, but ultimately, he feels that it has fallen as much as it can. He finishes by writing, “If EUR/USD breaks 1.30, GBP/USD could well follow it down, and if today’s CBI Distributive trades data are soft, that won’t help. The most fashionable UK assets today are likely to be index-linked gilts.”