{"id":1032,"date":"2012-06-01T14:00:00","date_gmt":"2012-06-01T14:00:00","guid":{"rendered":"http:\/\/starthostunlimiteddmffassi-ss.stackstaging.com\/bondworld.ch\/home\/sites\/20b\/7\/760c69a11c\/public_html\/investmentworld.ch\/index.php\/2012\/06\/01\/forex-markets-we-have-revised-our-projections-for-the-euro-sp-1862324758\/"},"modified":"2012-06-01T14:00:00","modified_gmt":"2012-06-01T14:00:00","slug":"forex-markets-we-have-revised-our-projections-for-the-euro-sp-1862324758","status":"publish","type":"post","link":"https:\/\/www.investmentworld.eu\/ch\/forex-markets-we-have-revised-our-projections-for-the-euro-sp-1862324758\/","title":{"rendered":"Forex markets: Dollar and yen the only safe havens against the euro area crisis"},"content":{"rendered":"<p style=\"text-align: justify;\"><span lang=\"EN-GB\"> <\/span>Anticipation ahead of the ECB meeting&#8230;..<span lang=\"EN-GB\">&#8230;<\/span><strong><span lang=\"EN-GB\"> <\/span><\/strong><span lang=\"EN-GB\"> <\/span><span lang=\"en-GB\"> <\/span><span lang=\"EN-GB\"><\/span><span lang=\"en-GB\"> <\/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&#038;view=user&#038;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&#038;view=user&#038;Itemid=1023\"><strong> <\/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;\"><span lang=\"EN-GB\">USD  (NEER) \u2013 Once again this week risk aversion mounted further, fully to  the dollar\u2019s benefit, on the back of both (i) the euro area crisis (ii),  and disappointing economic data releases in the United States. The  dollar should continue to be considered as a safe haven in the short  term, at least until uncertainty tied to the euro area crisis lingers.<\/span><\/div>\n<div style=\"text-align: justify;\">\n<p class=\"MsoNormal\" style=\"text-align: justify;\"><strong><span lang=\"EN-GB\">EUR<\/span><\/strong><span lang=\"EN-GB\"> \u2013 The euro depreciated further, breaching 1.25 on the downside and  stopping in the EUR\/USD 1.22 area. In addition to worries tied to  Greece, concerns have mounted over the resilience of the Spanish banking  system: specifically, focus is on the awaited proposal for the  recapitalisation of Bankia. <\/span>The outcome of the ECB meeting on Wednesday will be crucial. <span lang=\"EN-GB\">In  the absence of new initiatives or declarations of openness to directly  tackle the recent developments of the crisis, the exchange rate could  weaken further. The key support before EUR\/USD 1.2000 is 1.2150.  Downside, barring \u201cserious\u201d developments, should be contained within the  EUR\/USD 1.18 mark, i.e. the low hit at the height of the Greek crisis  in June 2010. On the other hand, if the ECB opts to cut interest rates,  the immediate reaction could be a drop, followed however by a potential  rebound, as a token of \u201cconfidence\u201d in the active role taken on by the  central bank, also aided by the impressive size of short euro exposure  on the market.<\/span><\/p>\n<p class=\"MsoNormal\" style=\"text-align: justify;\"><strong><span lang=\"EN-GB\">GBP<\/span><\/strong><span lang=\"EN-GB\"> \u2013 Sterling also depreciated, from GBP\/USD 1.57 to 1.52, both as a  result of the strong positive correlation with the EUR\/USD, and of some  disappointing domestic data: the May manufacturing PMI plunged from 50.2  to 45.9. There is also some anticipation ahead of the Bank of England  meeting on Thursday, not so much in terms of rates, which are again  expected to stay put at 0.50%, as for a potential expansion of the APF,  in light of the recent worsening of the situation in the euro area. We  continue not to expect changes in terms of the APF, in line with  consensus estimates (which, however, are not unanimous). A no-action  decision should not affect the pound. If on the other hand the central  bank decides to step up the APF, sterling could weaken further, both  against the dollar (to between GBP\/USD 1.52 and 1.50) and the euro (to  between EUR\/GBP 0.81 and 0.82).<\/span><\/p>\n<p class=\"MsoNormal\" style=\"text-align: justify;\"><strong><span lang=\"EN-GB\">JPY<\/span><\/strong><span lang=\"EN-GB\"> \u2013 Like the dollar, the yen also benefited from mounting risk aversion, rising from USD\/JPY 79<\/span> to 77. <span lang=\"EN-GB\">The BoJ may well decide to wait for market sentiment to stabilise before intervening to halt the yen\u2019s ascent. <\/span>Therefore, it could decide to hold out until the ECB meeting. <span lang=\"EN-GB\">In terms of levels, the latest intervention on 31 October took place when the exchange rate was at between USD\/JPY 75 and 76.<\/span><\/p>\n<\/p><\/div>\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>Anticipation ahead of the ECB meeting&#8230;..&#8230;<\/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-1032","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\/1032","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=1032"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/1032\/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=1032"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/categories?post=1032"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/tags?post=1032"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}