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28 Feb 2013
Forex Flash: Higher Beta currencies have rallied on risk move - Societe Generale
Kit Juckes, Global Head of Currency Strategy at Societe Generale comments that higher beta currencies have uniformly rallied on the risk move and equity rally but several still look short of momentum.
He sees that AUD/USD is re-testing the 1.03 level from which it broke down, but has been left behind by equities and other risk measures since mid-2011. He feels that the same to some degree, that’s the pattern across EMFX too, with INR softer, EMEA definitely not on fire and KRW up against the yen rather than the dollar. he writes, “These are all warnings that yield-hungry investors have scraped the bottom of the barrel (almost) dry and risk-reward is unhelpfully skewed from here.”
He sees that AUD/USD is re-testing the 1.03 level from which it broke down, but has been left behind by equities and other risk measures since mid-2011. He feels that the same to some degree, that’s the pattern across EMFX too, with INR softer, EMEA definitely not on fire and KRW up against the yen rather than the dollar. he writes, “These are all warnings that yield-hungry investors have scraped the bottom of the barrel (almost) dry and risk-reward is unhelpfully skewed from here.”