28 Oct 2013
Flash: EUR/USD supported by postponement of Fed Tapering - Danske Bank
FXstreet.com (Barcelona) - Danke Bank strategists note that the last two weeks EUR/USD has been well supported by the postponement of Fed tapering, the uncertain political situation in the US, the tighter peripheral spreads for Italy and Spain and the tendency for EONIA rates to move higher.
Key Quotes
“However, it now seems that the long EUR/USD trade is beginning to be crowded. We are still waiting for
the IMM positioning reports that were delayed due to the US government shutdown, but the report with data from October 1 was released this Friday and showed net long EUR/USD positions at the highest level since May 2011.”
“The same picture emerge in the FX option market, where the so-called risk reversal is a level not seen since the beginning of February this year when EUR/USD peaked slightly above 1.37.”
Key Quotes
“However, it now seems that the long EUR/USD trade is beginning to be crowded. We are still waiting for
the IMM positioning reports that were delayed due to the US government shutdown, but the report with data from October 1 was released this Friday and showed net long EUR/USD positions at the highest level since May 2011.”
“The same picture emerge in the FX option market, where the so-called risk reversal is a level not seen since the beginning of February this year when EUR/USD peaked slightly above 1.37.”