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10 Jun 2014
EUR/USD could challenge ytd lows around 1.3480 - Societe Generale
FXStreet (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale, sees the chance of a visit to the 1.3480/75 area.
Key Quotes
"The Euro however, is testing support levels again. A break through EUR/USD 1.3570 could well see technical analysts re-target the year's low at 1.3480, now that the post-ECB squeeze has reduced positioning."
"This, to my mind, remains a question of range-trading rather than the start of something bigger (yet) but psychologically the failure to make any further upward progress yesterday is significant. The bigger story though, continues to be the flow of money into anything with more yield than either dollar or euro."
"In a race to the bottom, FX vol, VIX, peripheral spreads, and corporate spreads, all look to have less downside from here than EM yields, as EM bonds in particular have regained less of last year's sell-off than other asset classes. That doesn't mean they don't look rich compared to where they were a few months ago, but in relative terms, this is where the 'value' still lies."
"Easy money at G3 central banks will go on encouraging money to flow from Treasuries to Mexican Mbonos, from Bunds to Poland and in both cases, more exotic alternatives benefit too. In FX terms, short Euros vs PLN and TRY to the east, NOK and GBP within G10, still works for us."
Key Quotes
"The Euro however, is testing support levels again. A break through EUR/USD 1.3570 could well see technical analysts re-target the year's low at 1.3480, now that the post-ECB squeeze has reduced positioning."
"This, to my mind, remains a question of range-trading rather than the start of something bigger (yet) but psychologically the failure to make any further upward progress yesterday is significant. The bigger story though, continues to be the flow of money into anything with more yield than either dollar or euro."
"In a race to the bottom, FX vol, VIX, peripheral spreads, and corporate spreads, all look to have less downside from here than EM yields, as EM bonds in particular have regained less of last year's sell-off than other asset classes. That doesn't mean they don't look rich compared to where they were a few months ago, but in relative terms, this is where the 'value' still lies."
"Easy money at G3 central banks will go on encouraging money to flow from Treasuries to Mexican Mbonos, from Bunds to Poland and in both cases, more exotic alternatives benefit too. In FX terms, short Euros vs PLN and TRY to the east, NOK and GBP within G10, still works for us."