FX views 25th July

What a confusing week. With the Greek bail out mostly out of the way, focus is now back on the USA. Will they default? Many analyst don't think so but no one is betting thier house on this not happening. I hear many hedge funds are long Cash rather then heavily invested and e markets still looks thin. EurUsd Well, many now believe it's going up. Staying above 1.43 helps slot. Target 1.50? I don't know really. Will there be a dead cat bounce for the Usd? Are we save fro the other PIIGS countries? cDS spreads have narrowed for sure and we have just stepped away from the Bungee board, for now. A Euro rate hike may still be in the works but I d prefer to wait and see first. Not convinced. AUD Feeling bearish with data, CPI tomorrow. Weak number could see AUD fall below 1.08 , probably low side of 1.07. Good support still at 1.0650. Medium term still attractive yields but not clear. JPY Will e BoJ intervenes? Don't know. But they've come out to gesture. Buy calls on Usd? Must go check the prices.

FX Views 19/7/2011

EUR The market seems to be waiting for something to happen. Of course we have two main themes holding the market to ransom at the current moment. European sovereign debt issue and the US debt ceiling /credit rating..it's like a game of who blinks first. Well I think it is unthinkable that the US won't raise it's debt ceiling even though I can't see concrete solutions to reduce the trend of their debt. Not easy anyway. But some analyst are talking about the possibility of a Homeland Incestment Act II which in 2005 saw a repatriation of about Usd 300 billion. Should be more this time and this is dollar bullish. Of course we are dealing with politicians here and they don't think in terms of financial calamity... Or do they? That leaves Europe muddlingnthrough one year one when Greece stole centre stage with it's debt crisis. They are caught in a bind and a very tough decision - to prevent the banks from going down from a haircut and default of Greece or find some more money to prolong the agony. The markets are still calling for a haircut but are tired of this waiting game. A non concrete resolution is EUR big negative if the market perceives that European banks likely to suffer big pains and the prospect of a contagion effect. Still sell rallies with tigh stops. AUD RBA comments seems to confirm wait and see stance with interest rates and I am feeling a little bearish for AUD. Sell for test of 1.05-1.02 if risk off adds at this crucial time. JPY 79-81 BoJ could intervene if it snpmells an opportunity especially if Usd environment is helping maybe?

FX views 12/7/2011

EUR Whilst Greece had thier short term relief 2weeks ago, things did come bank to haunt them last week. the ugly issue of Private Sector Involvement or lack of rather, begs the question of who is going to take the cut. The market is demanding some answers and in not getting a clear strategy, has been losing faith in the EUR. The fear now is if there is a rollover with a haircut then the ECB cannot stand to help the banks and treat those papers as good for a draw on the emergency fund. Hence Trichet is adamant that the credit agencies are wrong. Europe cannot afford, I think, to also bailout any of the other countries like Portugal, Spain or Italy. The fear of contagion is great at this moment and the hope is for this to pass or we are likely to see prolonged uncertainty and this would eventually tire the tax payees of France and Germany who will invariably vote thier politicians out. Then what? The Euro is the dream of politicians- they ar e not in power now. So will the current or future leaders of the big brother countries be able to cling onto power if their voters don't see benefits of bailing their poor and naughty neighbors out? Until the coast is clear, don't buy what you don't need. AUD Seems the domestic front is looking a little weak with the economy not able to make up for the losses in productivity following the Queensland floods. The mood from r r A is dovish and seems we are unlikely to see a rate hike this year. China is also showing weaker numbers. Hmmm. AUD may be poised for a slide on the back of EUR though on the EurAud cross, we may see this revisit historic lows if Europe blows up. Liquidate longs. Jpy Safe haven but gingerly now as USDJPY tests below 80. Will BoJ come in? If Europe blows up, it makes no sense for BoJ to come but still short USDJPY if you must but do leave a reasonable stoploss not too far away. GBP Weak weak weak. Sell rallies I would. There won't be a rate hike, in fact talks circulating UK needs QE. 1.63 , if it ever gets back there on the back of Euro woes should be a start point to sell.

Fx Views 5/7/2011
EUR
Analyst are expecting 3 hikes from now till 2012++ The market seems to be treating the Greek issue resolved for now except a small blip after a rating agency said that with the new rollovers, it could be deemed as a credit default event. But the market pro pm toy and calmly took EUR back up. Focus may also be on the US debt ceiling issue(read UsD bearish) but I believe this will be met with some kind of agreement between the Democrats and Reoulbicans by Aug 2.
I think EUR will tend upwards with some pullbacks unless a big news about Greece or other Europena peripheral countries come to spook the market.
Dips could see 1.42 for this week. 1.47 may be on the cards in the following weeks.

AUD
RBA didn't raise (not unexpected) rates but appear more dovish about global growth. This could mean no rate hikes this year and leaves AUD bulls hanging. I don't hink market is very long AUD but it leaves investors to watch more carefully the minutes of today's meeting by RBA and to watch China for signs of falling growth and poor data. With EUR buoyed by impending rate hikes, look to EUR AUD cross.
AUD could see some pull back 1.0450 if it doesn't push past 1.07 this week.

GBP
Lots of yoyo trading here amidst data on PMI today. 1.5950 must give way for this to fall. I still don't like GBP. I would look to sell rallies.
JPY
Bid. But overall still 80-83 range.

FX Views 27 June 2011
EUR
All hinging on Greece outcome on their acceptance elf further austerity measures in order to secure the needed funding from IMF/ECB mid-July. If this fails, as it can happen as 75% in Greece oppose them, the EUR could see a quick fall through 1.40. On the side but close, is a French suggestion to rollover 70% of the debt and that is likely to trigger a credit event, sending the EUR down quickly. China has again come out, as it did last year, to support Europe and the EUR. This will likely limit the fall. Don't forget the US is not out of their own messy debt problem too.
1.35 if a default gets triggered, otherwise back to 1.45

AUDUSD
Following risk appetite. Possibly fall to 1.02-1.00 on account of bad news from Greece.possibly more if markets feel it's more severe then expected. Medium term still a buy with good fundamentals. Delayed hike in OZ might allow more weakness initially if risk appetite falls away quickly.
GBOUSd
Weak weak weak. Likely to remain below 1.60. No interest rates now from comments from their MPC. GBP might benefit if EUR takes a tumble. Short EurGbp cross.
USDJPY
Safe haven buying JPY could test 79.50 but question is will BOJ intervention again. Was successful last two rounds.

FX views 20/6/11

EUR 12billion by IMF/ECB provided they can agree to stringent targets via another slew of austerity measures by 30 June. Greek PM going through vote of no confidence. How does that leave the creditors? Never mind that the Greeks, through their seemingly generous benefits and widespread non-payment of their taxes fro swimming pools to under declarations of earnings, have over borrowed as a country. Now have to tighten their belts significantly or cough up money due to the state. The other Eur110. Billion is still in the air and it will take up to at least mid July before a decision is reached about those loans! The market has however priced in quite a lot fir a technical default and probably expect a haircut for creditors eventually. This will trigger one of the scenarios I mentioned on this blog before. On the other hand, US still looks weak. EUR still looking weak, rallies could be sold for a break of 1.40 AUD Hawkish comments by RBA bid for AUD. Watch China widening band for CNY trading. More appreciations? Or more rapid appreciation? Buy dips to 1-1.02 GBP Weak weak weak. See 1.60 tested and may break. Target 1.57 JPY Supported still at 80 but may drift through to 79.50. Market still wary of BOJ. Top side 83 provides ceiling for now.

FX Views 6-6-2011

EurUsd With Greece getting their much needed bail-out (again) the EUR continued to rise. US non farm payrolls came in weaker then expected and helped EUR gain more ground. Risk is On. Likely to see EUR bid through the week with shallow pull backs to maybe 1.45 area. Possibly retest the highs around 1.49. Ebb meeting this week as well and comments might point to a EUR rate hike. So it's bid. AUDUSD RBA expected to talk this week and clues as to when they will hike might get clearer. This puts AUD in bid mode. Pull back looking at .0550 and we could see a retest of 1.09. USDJPY Boring 80-82.50 most likely. Gbpusd Weak Usd fundamentals keeping this bid but itw own story looks weak still. Sell rallies to 1.64-1.65