FXstreet.com (Barcelona) - Sebastien Galy, Senior FX Strategist at Societe Generale notes that as external imbalances correct from Japan to the UK, the size of the adjustment in portfolio positions is pressuring GBP and JPY crosses, with EURJPY putting pressure on EURUSD.

He writes, "As GBP corrects lower it will pressure EUR and USD higher as alternative investment destinations. The size of existing portfolio positions in commodity currencies of the expensive AUD and to a lesser extent CAD are part of the reason why these find it increasingly difficult to outperform the USD even in a risk supportive environment. Portfolio Positioning models (BBOP) based models help to formalize these concepts, but should be used with caution."

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Forex pairs in this Article » EUR/JPY, EUR/USD

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