Royal Bank of Scotland - "I see the odds of a cut by the ECB on Thursday as not insignificant, and are prepared to say go short EUR ahead of the meeting since few if anyone expect a cut. The EUR should weaken in any case if they do not cut, because it represents a central bank that is taking excessive risks on not easing enough in a region that is experiencing deteriorating political conditions that will dampen business confidence. A decision not to cut, even though not expected, will not sit well in the stomach of investors witnessing deteriorating conditions in confidence in Europe and potentially China and lower commodity prices.
(...) We continue to like short positions in EUR (S/L above 1.3170, targeting 1.28) and GBP (S/L above 1.5270, targeting 1.48). The extreme dovish ness of BoJ leadership nominees suggests a core short position in JPY, but we wonder why it has not moved already so prefer to bide our time.. We see increasing risks in AUD and would consider shorts from current levels with S/L either above 1.0255 or 1.0355, targeting 1.00. NZD also appears to still trading below its uptrend line since July-2012 and offers a good risk reward entry for a short position."