EUR/USD – More stuff
The ECB has managed to get the EUR/USD down. The Fed funds repricing has been paused by dovish Yellen. Thus leaves the EUR/USD in the range with upward bias for the summer.
JPY – J for Japan
Reasonably good data has killed expectations that Bank of Japan would take action. The final thing missing is growth in export.
FX volatility – Time to hedge?
FX volatility has fallen against expectations. The monetary policy of ECB has provided liquidity and monetary easing pushing some FX volatilities to levels not seen since pre-Lehman.
EM FX – Mixed zone
Recent performance in EM FX has been mixed. EM FX has once again been supported by the big central banks, but remain vulnerable to summer liquidity, re-pricing of the Fed and autumn elections.
NOK – Rising from the debris of the Olsen Storm?
NOK destroyed by the rate massage from Norges Bank Thursday last week. NOK is the weakest currency against EUR, but it has the third highest carry-to-risk in the G10 Space.
SEK – Guilt by association
The last time the Riksbank cut the repo rate, December 2013, the SEK weakened into the meeting and then strengthened on better data after. It looks like there is a repeat on the cards for the July 2014 meeting
Read the full report: FX Strategy