FXstreet.com (Barcelona) - "Euro underperformance has been the clear trend in FX markets in the second quarter of 2012, a theme which we expect to continue," said Chris Walker, strateist at UBS. "Our year-end EURUSD forecast is 1.15. Aside from the heightened political and financial risks involved, relative balance sheet dynamics and reserve recycling have led to significant euro underperformance, not just versus the dollar but versus euro-crosses as well," he added.
Implied-volatilities in the euro-crosses remain low relative to historic levels so "we look to take advantage of favourable pricing to position for further euro-downside. We are already short EURJPY via a put spread and EURUSD via a digital put but now add further EURJPY downside exposure and also some EURGBP downside." He concluded.
Implied-volatilities in the euro-crosses remain low relative to historic levels so "we look to take advantage of favourable pricing to position for further euro-downside. We are already short EURJPY via a put spread and EURUSD via a digital put but now add further EURJPY downside exposure and also some EURGBP downside." He concluded.
