10 Jun 2013
Flash: USD/EM rising sharply again - Societe Generale
FXstreet.com (Barcelona) - Sebastien Galy, Senior FX Strategist at Societe Generale notes that USDEM is once again rising sharply as investors fear the potential for a much milder Asian crisis as UST yields rise and credit conditions tighten there.
He see that the tightening of credit conditions was the talk in China but INR and MYR suffered the most while THB is flagged for its USD dependency. Further, he comments that once again markets are trading far ahead of the economic reality as Fed tapering is not expected before September. He writes, “It is the nature of this market to see concentrations of positions correct one after the other. EM is a much bigger asset class than gold was, FI and Junk orders higher.” Additionally, he comments that the USD is rising but only slowly versus EUR/USD. He finishes by writing, “I find it difficult to be bearish GBP vs EUR as I sit in a proper Starbuck. Just looking around the streets of London, the UK seems to adapt much faster than the US to shifts in demand and has an ample pool of foreign and eager talent available from continental Europe to pick from.”
He see that the tightening of credit conditions was the talk in China but INR and MYR suffered the most while THB is flagged for its USD dependency. Further, he comments that once again markets are trading far ahead of the economic reality as Fed tapering is not expected before September. He writes, “It is the nature of this market to see concentrations of positions correct one after the other. EM is a much bigger asset class than gold was, FI and Junk orders higher.” Additionally, he comments that the USD is rising but only slowly versus EUR/USD. He finishes by writing, “I find it difficult to be bearish GBP vs EUR as I sit in a proper Starbuck. Just looking around the streets of London, the UK seems to adapt much faster than the US to shifts in demand and has an ample pool of foreign and eager talent available from continental Europe to pick from.”