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25 Jun 2013
Flash: USD/CHF offers greatest scope for recovery – UBS
FXstreet.com (New York) - According to Research Analyst Gareth Berry at UBS, “The previous USD/CHF liquidation in the run-up to the Fed meeting seems offer the greatest scope for a recovery – indeed, this did materialize though the net volumes still leave much to be desired.”
Asset managers were strong buyers throughout the week, but surprisingly private clients chose not to add to USD longs. The EUR/CHF also was net bought, but client interest was more uniform this time. The GBP/USD was one of the casualties of the Fed as well, with strong selling on Thursday led by asset managers and hedge funds. We still see further downside potential in GBPUSD from current levels.
The risk bloc did not suffer as much as expected from Fed normalization, probably because the individual currencies were already trading heavily on the back of their own issues. NOK was net liquidated post Norges (and
Fed), but the strong SEK buying reflects the removal of NOKSEK longs put on in the run up to the decision. The NZD and CAD were net sold, while AUD tried to catch some bids from asset managers and hedge funds. However, “developments in China and adverse policy expectations will likely continue to weigh.” Berry warns.
Asset managers were strong buyers throughout the week, but surprisingly private clients chose not to add to USD longs. The EUR/CHF also was net bought, but client interest was more uniform this time. The GBP/USD was one of the casualties of the Fed as well, with strong selling on Thursday led by asset managers and hedge funds. We still see further downside potential in GBPUSD from current levels.
The risk bloc did not suffer as much as expected from Fed normalization, probably because the individual currencies were already trading heavily on the back of their own issues. NOK was net liquidated post Norges (and
Fed), but the strong SEK buying reflects the removal of NOKSEK longs put on in the run up to the decision. The NZD and CAD were net sold, while AUD tried to catch some bids from asset managers and hedge funds. However, “developments in China and adverse policy expectations will likely continue to weigh.” Berry warns.