Euro Rebound Continues
The euro continued its broad-based advance overnight in the wake of Thursday’s upbeat ECB press conference. EURUSD briefly traded through 1.3400, EURJPY broke 120.00, and EURCHF hit a 13-month high. The ten big-figure rally in USDJPY is exactly two months old today (it began the moment former-Prime Minister Noda declared his intention to dissolve the Lower House), yet it may still have a little further to run. True, levels implied by fundamental drivers (such as US yields) were left behind long ago, but the next BoJ policy decision is still over a week away and political pressure on the BoJ seems to mount with each passing day. Over the weekend Prime Minister Abe insisted that any new inflation target must be accompanied by a pledge to hit it over the medium-term (not the long-term). The 90.00 level could present some psychological resistance, but our technical strategists see scope for an eventual m o ve up towards 94.14.
Click here to read the full report: UBS Morning Adviser Europe
UBS Investment Bank