Forex Flash: EUR to show more strength; EUR/CHF uptrend not over - Societe Generale
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EUR/CHF
FXstreet.com (Barcelona) - The EUR is still doomed to some temporary strength, says Sebastien Galy, currency strategist at Societe Generale. His rationale has as main pillar signs that Europe wants to pursue a tightening of monetary conditions as others (US, Japan, UK) prove more aggressive in their policy easing.
Sebastien notes that recent comments from ECB Weidmann over currencies not being politicised, is a hint that the verbal intervention is moving towards the acceptance of current Euro levels as not that problematic.
"The risk is to send Europe in a deflationary spiral with an overly expensive currency and plumbing problems. Thankfully valuations of EURUSD are not extreme yet, depressing. EUR should outperform GBP, JPY, NZD.. and eventually again CHF" Mr. Galy says.
On EURCHF domain, "the odds are that it is only a matter of time before the next uptrend as investors continue to pile out of overbought safe havens" the analyst notes. Being short CHF "is the strategic funding not to miss as many missed JPY, although the later has better grounds" he concludes.
Sebastien notes that recent comments from ECB Weidmann over currencies not being politicised, is a hint that the verbal intervention is moving towards the acceptance of current Euro levels as not that problematic.
"The risk is to send Europe in a deflationary spiral with an overly expensive currency and plumbing problems. Thankfully valuations of EURUSD are not extreme yet, depressing. EUR should outperform GBP, JPY, NZD.. and eventually again CHF" Mr. Galy says.
On EURCHF domain, "the odds are that it is only a matter of time before the next uptrend as investors continue to pile out of overbought safe havens" the analyst notes. Being short CHF "is the strategic funding not to miss as many missed JPY, although the later has better grounds" he concludes.
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