Back
12 Sep 2013
Flash: EUR/USD bounce seen as selling opportunity – TD Securities
FXstreet.com (Lisbon) - Earlier today there was weak Italian and Eurozone industrial production releases only had a mild impact on the EUR, leaving the EUR/USD consolidating overnight, notes the TD Securities Team.
Key quotes
However, “softer European equities and wider peripheral Eurozone yield spreads point to a bit more risk aversion in the broader markets than is reflected in the FX spot rate. German-US short term spreads widened further overnight (in a EUR/USD-negative way), and are now at a point that would be more consistent with EUR/USD at 1.30 (according to the relationship over the past year).”
“In the options market, a shift in the trend for risk reversals shows an increased demand for downside protection in EUR/USD for the first time since the pair started rallying last week. Overall, we continue to see this recent bounce in EUR/USD as a selling opportunity.”
Key quotes
However, “softer European equities and wider peripheral Eurozone yield spreads point to a bit more risk aversion in the broader markets than is reflected in the FX spot rate. German-US short term spreads widened further overnight (in a EUR/USD-negative way), and are now at a point that would be more consistent with EUR/USD at 1.30 (according to the relationship over the past year).”
“In the options market, a shift in the trend for risk reversals shows an increased demand for downside protection in EUR/USD for the first time since the pair started rallying last week. Overall, we continue to see this recent bounce in EUR/USD as a selling opportunity.”