Forex Flash: Divergence in the Force - Societe Generale (Barcelona) - Sebastien Galy, Senior FX Strategist at Societe Generale feels that the risk reward of ultra easy monetary policies continues to be reassessed.

He feels that Norway is going against the grain and digging in, wanting its currency to weaken, Sweden is choosing to let external forces tighten its monetary conditions (unemployment dropped), Switzerland is maintaining its stance choose prudential regulation to cool down the housing market as did Canada.

Galy adds that China meanwhile has just done an operation which effectively tightens policy and with less sugar in the blood the local stock market took a plunge. He writes, “Australia is willing to look through signs of a recovery to maintain an easy policy stance with its economy fragmented between a commodity and non commodity sector (RBA minutes overnight). This diversity of reaction and its impact on the sugar rush makes for an interesting trading environment.”