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19 Jun 2013
Flash: EUR/USD a conundrum - Societe Generale
FXstreet.com (London) - Kit Juckes at Societe Generale mentioned that the dollar has been a conundrum to clients - with EUR/USD settling above 1.3400.
His underlying thought is still not to sell it below 1.3600, but more particularly not until relative rate trends become more helpful. He notes that 2y/2y US rates are up about 60bp since the start of May, but 2y/2y euro rates aren't far behind, up 43bp. He feels the current 1.22% in 2y/2y Euros is too high, but can be dragged even higher by the next leg of the US move.
His underlying thought is still not to sell it below 1.3600, but more particularly not until relative rate trends become more helpful. He notes that 2y/2y US rates are up about 60bp since the start of May, but 2y/2y euro rates aren't far behind, up 43bp. He feels the current 1.22% in 2y/2y Euros is too high, but can be dragged even higher by the next leg of the US move.