7 Jun 2013
Flash: Risk-off bypasses dollar - Societe Generale
FXstreet.com (Barcelona) - Societe Generale strategists feel that risk assets have soured and the yen and Swiss franc have gained ground since 22 May, when Bernanke admitted the possibility of a gradual Fed exit from its asset purchases.
They add that in G10 FX space, currencies have behaved on cue to risk-off sentiment with JPY and CHF outperforming, and AUD and NZD underperforming. Further, the recent mixed US data flow and general risk-off environment have not benefitted the US dollar. They write, “However, we maintain our bullish dollar view for the remainder of the year. As the Fed starts to retreat gradually from its ultra-loose policy, we expect the BOJ, the ECB and possibly the BOE to step forward and ease further. As monetary policy differences sharpen, so will cross currency performances.”
They add that in G10 FX space, currencies have behaved on cue to risk-off sentiment with JPY and CHF outperforming, and AUD and NZD underperforming. Further, the recent mixed US data flow and general risk-off environment have not benefitted the US dollar. They write, “However, we maintain our bullish dollar view for the remainder of the year. As the Fed starts to retreat gradually from its ultra-loose policy, we expect the BOJ, the ECB and possibly the BOE to step forward and ease further. As monetary policy differences sharpen, so will cross currency performances.”