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24 Jun 2013
Flash: Short EUR/USD best option - Westpac
FXstreet.com (Barcelona) - With US 10yr bonds hitting 2.54 on Friday, highest since August 2011, the Westpac Global Strategy Team points that the break through 2.42 was a major move and they now expect multi-period gains int the USD going forward.
Westpac thinks the best way to play this ongoing USD strength story is through shorting EUR, as the bank think this is not just a US yield story, "the argument goes deeper" Westpac comments.
Westpac is not convinced that upcoming EU Presidencies y Lithuania and Greece "will have enough clout to overcome the very high barriers (German elections etc) to further development on the talks to create harmonised banking rules that broke down over the weekend" the bank said. This latter development, according to Westpac, "is very disappointing ahead of this week's EU Leaders Summit on Thursday and a clear sign that policy momentum is waning."
Westpac also highlights that the Greek coalition is teetering, "with rumours continuing of another Greek debt writedown, while Cyprus continues to push for a renegotiation of the bank deal that took place in the depths of its crisis" Westpac adds.
Westpac thinks the best way to play this ongoing USD strength story is through shorting EUR, as the bank think this is not just a US yield story, "the argument goes deeper" Westpac comments.
Westpac is not convinced that upcoming EU Presidencies y Lithuania and Greece "will have enough clout to overcome the very high barriers (German elections etc) to further development on the talks to create harmonised banking rules that broke down over the weekend" the bank said. This latter development, according to Westpac, "is very disappointing ahead of this week's EU Leaders Summit on Thursday and a clear sign that policy momentum is waning."
Westpac also highlights that the Greek coalition is teetering, "with rumours continuing of another Greek debt writedown, while Cyprus continues to push for a renegotiation of the bank deal that took place in the depths of its crisis" Westpac adds.