3 Dec 2013
Flash: Long USD vs diversified global basket - Nomura
FXstreet.com (Bali) - The Nomura FX Team has entered a long USD position vs a diversified global basket, as they think we are approaching a new broad upleg of dollar gains.
Key Quotes
"There are two main reasons. First, 2014 is approaching, and we continue to expect GDP momentum to be near 3% by Q2. Second, the recent backup in US yields has been more orderly than in May-Sep. Our flow indicators seem to confirm better foreign buying of US fixed income lately."
"We are entering into fresh USD longs against a global basket of currencies. Specifically, we chose a basket of seven currencies (EUR, AUD, NZD, JPY, CHF, MYR and CLP). We want a short bias in commodity currencies (AUD and NZD) in part due to our negative view on Chinese growth in 2014. We think the euro is starting to look tired, and we think a break (to the upside) of 1.38 is quite unlikely. We think JPY has potential to weaken substantially further in the medium term, even if the current entry point is not a great one."
"We are scaling gradually into this trade. We are entering $10 million of exposure today within our model portfolio. There may be an opportunity to add after the December FOMC meeting (December 18), where there could be a bit of USD retracement, as we don‟t expect tapering to materialize."
Key Quotes
"There are two main reasons. First, 2014 is approaching, and we continue to expect GDP momentum to be near 3% by Q2. Second, the recent backup in US yields has been more orderly than in May-Sep. Our flow indicators seem to confirm better foreign buying of US fixed income lately."
"We are entering into fresh USD longs against a global basket of currencies. Specifically, we chose a basket of seven currencies (EUR, AUD, NZD, JPY, CHF, MYR and CLP). We want a short bias in commodity currencies (AUD and NZD) in part due to our negative view on Chinese growth in 2014. We think the euro is starting to look tired, and we think a break (to the upside) of 1.38 is quite unlikely. We think JPY has potential to weaken substantially further in the medium term, even if the current entry point is not a great one."
"We are scaling gradually into this trade. We are entering $10 million of exposure today within our model portfolio. There may be an opportunity to add after the December FOMC meeting (December 18), where there could be a bit of USD retracement, as we don‟t expect tapering to materialize."