UBS - "This week we visited clients in Saudi Arabia, Kuwait, Qatar and Abu Dhabi. Middle East accounts remain cautious on the euro, have little interest in sterling and believe the yen may weaken. Thus they continue to be overweight dollars. This is partly a reflection of increased social spending since the Arab Spring began, reducing accumulated foreign reserves. But it also reflects ongoing concern about the Eurozone debt crisis. In short, the region's clients largely share our underlying bullish view on the greenback.
(...) This week's key points are:
- Fed easing will only cap dollar temporarily
- ECB to stay on hold in the week ahead
- yen to remain under pressure into December elections
- BoE on hold but stay cautious on Cable
- SNB won't raise EURCHF floor despite slowing data
- December Riksbank rate cut to keep NOKSEK supported
- RBA to cut, stay bearish Australian dollar"
Mansoor Mohi-uddin, Managing Director & Head, Foreign Exchange Strategy at UBS Macro Research