27 Mar 2014
Waiting for levels to sell AUD - RBS
FXStreet (Bali) - Greg Gibbs, FX Trading Strategist at RBS, shares his thoughts on the FX market for Thursday, noting that focus remains on selling the AUD at higher levels.
Key Quotes
"There are some strange bed-fellows in the performances of currencies recently, suggesting we are seeing a squeeze of positions and testing views established in the main last year on heightened fear of Fed tapering, rising Chinese financial risks, pockets of significant emerging market upheaval such as that in Turkey and India, and Japanese QQE policy."
"On the whole, the market is trading as if it is short AUD having priced in a significant risk of Chinese financial upheaval last year, It is underweight some emerging markets established on Fed taper fears, it is short JPY on QQE policy, and it is long EUR on a persistent narrowing in periphery spreads (although perhaps less so since it started from a very short EUR position in late 2012)."
"We remain focuses on waiting for levels to sell AUD (perhaps .93/.95) and still prefer to be short JPY, and see some further downside in EUR near term."
Key Quotes
"There are some strange bed-fellows in the performances of currencies recently, suggesting we are seeing a squeeze of positions and testing views established in the main last year on heightened fear of Fed tapering, rising Chinese financial risks, pockets of significant emerging market upheaval such as that in Turkey and India, and Japanese QQE policy."
"On the whole, the market is trading as if it is short AUD having priced in a significant risk of Chinese financial upheaval last year, It is underweight some emerging markets established on Fed taper fears, it is short JPY on QQE policy, and it is long EUR on a persistent narrowing in periphery spreads (although perhaps less so since it started from a very short EUR position in late 2012)."
"We remain focuses on waiting for levels to sell AUD (perhaps .93/.95) and still prefer to be short JPY, and see some further downside in EUR near term."