{"id":1025,"date":"2012-05-25T14:00:00","date_gmt":"2012-05-25T14:00:00","guid":{"rendered":"http:\/\/starthostunlimiteddmffassi-ss.stackstaging.com\/bondworld.ch\/home\/sites\/20b\/7\/760c69a11c\/public_html\/investmentworld.ch\/index.php\/2012\/05\/25\/forex-markets-we-have-revised-our-projections-for-the-euro\/"},"modified":"2012-05-25T14:00:00","modified_gmt":"2012-05-25T14:00:00","slug":"forex-markets-we-have-revised-our-projections-for-the-euro","status":"publish","type":"post","link":"https:\/\/www.investmentworld.eu\/ch\/forex-markets-we-have-revised-our-projections-for-the-euro\/","title":{"rendered":"Forex markets: We have revised our projections for the euro"},"content":{"rendered":"<p style=\"text-align: justify;\">We have revised our projections for the euro (A) downwards in the  short\/medium term, (B) while leaving the profile unchanged in the  medium\/long term&#8230;.<span lang=\"EN-GB\">&#8230;<\/span><strong><span lang=\"EN-GB\">&nbsp;<\/span><\/strong><span lang=\"EN-GB\">&nbsp;<\/span><span lang=\"en-GB\">&nbsp;<\/span><span lang=\"EN-GB\"><\/span><span lang=\"en-GB\"> <\/span><\/p>\n<p>  <!--more-->  <\/p>\n<ul> <\/ul>\n<hr \/>\n<p> <span style=\"font-family: arial,helvetica,sans-serif;\"><span style=\"font-size: 10pt;\"> Sign up for our free newsletter to receive weekly news from BONDWorld<br \/><a href=\"index.php?option=com_acymailing&amp;view=user&amp;Itemid=107\"><strong>Click  here to register for your free copy<\/strong><\/a><\/span> <span style=\"font-size: 10pt;\"><a href=\"index.php?option=com_acymailing&amp;view=user&amp;Itemid=1023\"><strong>&nbsp;<\/strong><\/a><\/span><\/span>  <\/p>\n<hr \/>\n<p style=\"text-align: justify;\"><span style=\"font-family: arial,helvetica,sans-serif;\"><span style=\"font-size: 10pt;\"><strong>For professional investors and advisers only<\/strong><\/span><\/span><\/p>\n<hr \/>\n<div style=\"text-align: justify;\">\n<div style=\"text-align: justify;\">\n<p class=\"MsoNormal\" style=\"text-align: justify;\">We have also revised slightly downwards our projections for sterling against the US dollar in the short term.<\/p>\n<p class=\"MsoNormal\" style=\"text-align: justify;\"><strong>EUR \u2013<\/strong> We have revised our projections for the euro (A) downwards in the  short\/medium term, (B) while leaving the profile unchanged in the  medium\/long term. Our 1m projection has changed from EUR\/USD 1.25 to  1.20. In this case, the revision intends to incorporate (i) the set of  risks tied to Greece\u2019s potential exit from EMU, (ii) the uncertainty  that in the meantime could generate market tensions, and a partial  flight of assets in euros, (iii) and increasing concern over Spain\u2019s  situation and, more in general, over potential contagion effects. We  have lowered our 3m projection from EUR\/USD 1.30 to 1.27. The  potentially negative factor on this time horizon is the risk of a  deterioration of the macro picture in its strictest sense, in particular  in terms of growth, even regardless of the debt crisis (which in any  case has restrictive effects as a result of fiscal consolidation).<\/p>\n<p class=\"MsoNormal\" style=\"text-align: justify;\">The  6m projection is down from EUR\/USD 1.35 to 1.30. The factors listed  above for the 1m and 3m projections will continue to apply, but our  choice not to indicate a lower exchange rate level than 1.30 is  explained by the uncertainties tied to the presidential elections in the  United States at the end of the year, with the risk of the federal debt  ceiling being breached, and the resulting need to put in place fiscal  restriction measures which could no longer be procrastinated.<\/p>\n<p class=\"MsoNormal\" style=\"text-align: justify;\">On  the other hand, our 12m and 24m projections remain broadly unchanged at  EUR\/USD 1.35, as (i) we assume this to be the most delicate phase (also  given the lack of precedents) of the debt crisis, and therefore that  action will start to be taken now, so that in the medium\/long term the  situation should prove better on the whole than it is at present; we  also assume (ii) that, as has generally been the case in the past year,  international investors will continue to purchase \u201ccore Europe\u201d, with  Germany at the fore, considering that \u2013 contagion issues notwithstanding  \u2013 the debt crisis is a much more serious problem for peripheral euro  area countries, and relatively manageable for the structurally sounder  and more virtuous (in comparative terms) \u201ccore\u201d countries.<\/p>\n<p class=\"MsoNormal\" style=\"text-align: justify;\">As  regards short\/very short term risks, in order to approximately quantify  downside \u2013 in case of \u201cmaximum\u201d crisis escalation \u2013 EUR\/USD 1.18 may be  taken as a downside target, based on the behaviour of the exchange rate  during the first Greek crisis (plunge from 1.45 to 1.1877<span>&nbsp; <\/span>EUR\/USD between January and 7 June 2010).<\/p>\n<p class=\"MsoNormal\" style=\"text-align: justify;\"><strong>GBP <\/strong>\u2013  We have also revised slightly downwards our projections for sterling  against the US dollar, from GBP\/USD 1.54 and 1.52 to 1.51 and 1.53, on a  1m and 3m horizon respectively. This revision was mostly prompted by  the positive correlation between the GBP\/USD and the EUR\/USD, which  increases in phases such as the present, in which the euro area crisis  is mounting. Also, economic data releases in the UK have been especially  poor in the past two weeks. Yesterday the preliminary Q1 GDP estimate  was revised downwards, placing growth contraction at -0.3%from -0.2%  q\/q, and drawing a very poor picture indeed of private consumption. By  no coincidence, the Bank of England has decided not to rule out the  possibilit\u00e0 of a further expansion of the APF, although the move was not  made at the May meeting. The implications on the pound\u2019s cross rate  against the euro should be to support resilience above EUR\/GBP 0.8000.  However, this does not rule out the possibility of the exchange rate  making a foray into the EUR\/GBP 0.79 area in the short term, although  such movements would be temporary and of limited scope.<\/p>\n<p class=\"MsoNormal\" style=\"text-align: justify;\"><strong>JPY <\/strong>\u2013  The yen still hasn\u2019t managed to drop back to USD\/JPY 80, and is  lingering in the 79 area. Tensions generated by the euro area crisis  justify the Japanese currency\u2019s downside resistance, but should not  compromise the expected depreciation beyond the very short term.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<p> <\/p>\n<div style=\"text-align: justify;\"><\/div>\n<p style=\"text-align: justify;\"><span style=\"font-family: arial,helvetica,sans-serif;\"><strong> <\/strong><\/span><\/p>\n<hr \/>\n<p> <span style=\"font-family: arial,helvetica,sans-serif;\"><strong> <\/strong><\/span> <\/p>\n<p style=\"text-align: justify;\"><strong><span style=\"font-family: arial,helvetica,sans-serif;\">Appendix<br \/>An<\/span>alyst Certification<\/strong><br \/>The financial analysts who prepared this report, and whose names and roles appear on the first page, certify that: (1) The views expressed on companies mentioned herein accurately reflect independent, fair and balanced personal views; (2) No direct or indirect compensation has been or will be received in exchange for any views expressed. Specific disclosures: The analysts who prepared this report do not receive bonuses, salaries, or any other form of compensation that is based upon specific investment banking transactions.<\/p>\n<p><strong>Important Disclosures<\/strong><br \/>This research has been prepared by Intesa Sanpaolo S.p.A. and distributed by Banca IMI S.p.A. Milan, Banca IMI SpA-London Branch (a member of the London Stock Exchange) and Banca IMI Securities Corp (a member of the NYSE and NASD). Intesa Sanpaolo S.p.A. accepts full responsibility for the contents of this report. Please also note that Intesa Sanpaolo S.p.A. reserves the right to issue this document to its own clients. Banca IMI S.p.A. and Intesa Sanpaolo S.p.A. are both part of the Gruppo Intesa Sanpaolo. Intesa Sanpaolo S.p.A. and Banca IMI S.p.A. are both authorised by the Banca d&#8217;Italia, are both regulated by the Financial Services Authority in the conduct of designated investment business in the UK and by the SEC for the conduct of US business.<br \/>Opinions and estimates in this research are as at the date of this material and are subject to change without notice to the recipient. Information and opinions have been obtained from sources believed to be reliable, but no representation or warranty is made as to their accuracy or correctness. Past performance is not a guarantee of future results. The investments and strategies discussed in this research may not be suitable for all investors. If you are in any doubt you should consult your investment advisor. <br \/>This report has been prepared solely for information purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any financial products. It should not be regarded as a substitute for the exercise of the recipient\u2019s own judgement.<br \/>No Intesa Sanpaolo S.p.A. or Banca IMI S.p.A. entities accept any liability whatsoever for any direct, consequential or indirect loss arising from any use of material contained in this report. <br \/>This document may only be reproduced or published together with the name of Intesa Sanpaolo S.p.A. and Banca IMI S.p.A.. Intesa Sanpaolo S.p.A. and Banca IMI S.p.A. have in place a Joint Conflicts Management Policy for managing effectively the conflicts of interest which might affect the impartiality of all investment research which is held out, or where it is reasonable for the user to rely on the research, as being an impartial assessment of the value or prospects of its subject matter. A copy of this Policy is available to the recipient of this research upon making a written request to the Compliance Officer, Intesa Sanpaolo S.p.A., 90 Queen Street, London EC4N 1SA.<br \/>Intesa Sanpaolo S.p.A. has formalised a set of principles and procedures for dealing with conflicts of interest (\u201cResearch Policy\u201d). The Research Policy is clearly explained in the relevant section of Banca IMI\u2019s web site (www.bancaimi.com).<br \/>Member companies of the Intesa Sanpaolo Group, or their directors and\/or representatives and\/or employees and\/or members of their households, may have a long or short position in any securities mentioned at any time, and may make a purchase and\/or sale, or offer to make a purchase and\/or sale, of any of the securities from time to time in the open market or otherwise. Intesa Sanpaolo S.p.A. issues and circulates research to Qualified Institutional Investors in the USA only through Banca IMI Securities Corp., 245 Park Avenue, 35th floor, 10167 New York, NY,USA, Tel: (1) 212 326 1230. Residents in Italy: This document is intended for distribution only to professional investors as defined in art.31, Consob Regulation no. 11522 of 1.07.1998 either as a printed document and\/or in electronic form. Person and residents in the UK: This document is not for distribution in the United Kingdom to persons who would be defined as private customers under rules of the FSA.<br \/>US persons: This document is intended for distribution in the United States only to Qualified Institutional Investors as defined in Rule 144a of the Securities Act of 1933. US Customers wishing to effect a transaction should do so only by contacting a representative at Banca IMI Securities Corp. in the US (see contact details above). <br \/><strong><br \/>Valuation Methodology<\/strong><br \/>Trading Ideas are based on the market\u2019s expectations, investors\u2019 positioning and technical, quantitative or qualitative aspects. They take into account the key macro and market events and to what extent they have already been discounted in yields and\/or market spreads. They are also based on events which are expected to affect the market trend in terms of yields and\/or spreads in the short-medium term. The Trading Ideas may refer to both cash and derivative instruments and indicate a precise target or yield range or a yield spread between different market curves or different maturities on the same curve. The relative valuations may be in terms of yield, asset swap spreads or benchmark spreads.<br \/><strong><br \/>Coverage Policy And Frequency Of Research Reports<\/strong><br \/>Intesa Sanpaolo S.p.A. trading ideas are made in both a very short time horizon (the current day or subsequent days) or in a horizon ranging from one week to three months, in conjunction with any exceptional event that affects the issuer\u2019s operations. In the case of a short note, we advise investors to refer to the most recent report published by Intesa Sanpaolo S.p.A\u2019s Research Department for a full analysis of valuation methodology, earnings assumptions and risks. Research is available on IMI\u2019s web site (www.bancaimi.com) or by contacting your sales representative.<\/p>\n<p>Source: BONDWorld &#8211; Intesa Sanpaolo \u2013 Research Department<\/p>\n<p style=\"position: absolute; left: -10000px; top: 0px; width: 1px; height: 1px; overflow: hidden;\" id=\"_mcePaste\">Normal 0 14       MicrosoftInternetExplorer4<\/p>\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>We have revised our projections for the euro (A) downwards in the short\/medium term, (B) while leaving the profile unchanged in the medium\/long term&#8230;.&#8230;&nbsp;&nbsp;&nbsp;<\/p>\n","protected":false},"author":2,"featured_media":3461,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"telegram_tosend":false,"telegram_tosend_message":"","telegram_tosend_target":0,"footnotes":"","_wpscp_schedule_draft_date":"","_wpscp_schedule_republish_date":"","_wpscppro_advance_schedule":false,"_wpscppro_advance_schedule_date":"","_wpscppro_dont_share_socialmedia":false,"_wpscppro_custom_social_share_image":0,"_facebook_share_type":"","_twitter_share_type":"","_linkedin_share_type":"","_pinterest_share_type":"","_linkedin_share_type_page":"","_instagram_share_type":"","_medium_share_type":"","_threads_share_type":"","_google_business_share_type":"","_selected_social_profile":[],"_wpsp_enable_custom_social_template":false,"_wpsp_social_scheduling":{"enabled":false,"datetime":null,"platforms":[],"status":"template_only","dateOption":"today","timeOption":"now","customDays":"","customHours":"","customDate":"","customTime":"","schedulingType":"absolute"},"_wpsp_active_default_template":true},"categories":[22],"tags":[],"class_list":["post-1025","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-makrooekonomische-daten"],"blocksy_meta":{"styles_descriptor":{"styles":{"desktop":"","tablet":"","mobile":""},"google_fonts":[],"version":6}},"_links":{"self":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/1025","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/comments?post=1025"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/1025\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/media\/3461"}],"wp:attachment":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/media?parent=1025"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/categories?post=1025"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/tags?post=1025"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}