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Currencies  |  March 03, 2013 13:03:01

John Hardy: Optimism for the euro is steep, soon comes to weakening 1.12 EURUSD



The market to sell the yen and the British pound little overplayed, both currencies can therefore briefly strengthened. A view of the distant horizon, but suggests that it went down legitimately. Same course sooner or later picks up the euro against the dollar. Course the common European currency will weaken either concerns about the stability of the euro area, or other ECB policy easing, predicts chief currency strategist at Saxo Bank London John Hardy.

Most City predicted that this year will be better than last year. The first two months confirm this. Recovery will continue or will we see another slump?

I'm not sure whether the current optimism sound foundations. For me, the belief built on the water, not really good news. Certainly, China seems to have stabilized and some European surveys look better, but many are driven only joy in the fact that nothing and no one currently nekolabuje, not that things really started to improve. However, there are issues that still look worse, as one of the key I named France. From America comes the mix of good and bad news.

What strategy, given the situation on the market to choose you advise? Who will be the winner, and one loser?

Euro walks the unsustainable path, even though we may see a strengthening, a shudder over recent maximum, thus limit 1.37 EUR / USD.At these levels, I would without hesitation sold because I expect to return to Europe either fear of systemic risk - it will look so bad, that we start to worry about the entire framework, which certainly does not stand on solid ground - or one of the members of the eurozone will ask for help. This opens the door to the OMT of the European Central Bank, in other words, the next release, which should keep the euro in the current global game the weakest currency.

It is this scenario in many City seems most likely. What would it mean?

If you have a problem that is not Germany, spreads are again somewhat smaller and the euro weakened. By the way, I agree that this is the most likely scenario in the medium term - one of the countries of the southern euro-zone starts OMT. So Euro against the dollar weakens.Currently counting limit 1.15 EUR / USD, her goals for quite a long time. Sure, it looked better when the exchange rate was 1.20 EUR / USD, but even after the strengthening of the euro with it too, I did not move. I just believe in long-term weakness in the 1.15 to 1.12 EUR / USD.

EUR / USD

What do you expect from the Japanese yen, which in recent times due to the steps the Japanese government is experiencing a lot of wild ride. A lot of investors now makes it.

Just recently certainly interesting. To me that much but reflected in the price, before it actually happened. What is happening now, you can not also somehow break away from the global environment where inflation occurs repeatedly minibublin, dominated by complacency and the like. I therefore believe that we can not wait to relatively quick turnover. For example, suppose the Fed gets into trouble, it's the U.S. markets starts to bubble, then followed by correction to a stronger yen level. On the other hand, in the long term, the current level of weaker Japanese currency justifiable, without a doubt.

USD / JPY

What do you think about John Hardy sterling and yen, can be found on the web Investment

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John Hardy: Optimismus na euro je přehnaný, brzy přijde oslabení na 1,12 EURUSD

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