Deutsche Bank - EURUSD: We are Looking for 1.20 Over the Course of H2; USDCAD The Best Long Dollar Trade?
Deutsche Bank - "Given our bullish USD view for the rest of the year, we’re turning bearish EUR/USD. Even if Fed QE continues throughout 2013, US 2-year yields will turn up this summer and there’s little additional good news that can be priced into the euro. EUR/USD should lag broad dollar moves however, as the Euro-area’s external accounts look good, suggesting most EUR-crosses are likely to hold up. We’re looking for 1.20 over the course of H2.
(...) For the last three years, the market assumption has been that the Canadian economy is a "high beta" version of the US. With such close ties, the thinking goes, CAD will perform well as the US picks up steam. There are four reasons why this notion could be challenged this year. USD/CAD could end up being one of the best long dollar trades over the next twelve months.
(1) Short CAD is the world's best valuation trade
(2) Canada's current account dynamics look terrible
(3) Bank of Canada will lag, not lead Fed re-pricing
(4) Portfolio inflows exceptionally vulnerable"
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Comment by Peter jcp on March 4, 2013 at 11:36am -
Yes Grigore- and Deutsche are the largest player with estimates of between 19% and 24% of the total forex market. I believed them prior to the new year when they were looking for 1.3500 and then at 13600 you are correct - they were after 1.4000. Now they are looking at selling with a 1000 pips drop - can they manufacture it themselves - if not - they only need a couple of other players to join them and its on the cards.
However will I just sell the EU and wait - no - do I trust anything in this market - no. Do I expect to make at least 500 pips scalp buying the EU over the next 3 months - yes ;-)))
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