10 Apr 2014
EUR and GBP potential upside ahead
FXStreet (Barcelona) -Kit Juckes, Global Head of Currency Strategy at Societe Generale, believes both the EUR and the GBP could test higher levels.
Key Quotes
"The US 1yr rate, 5yrs forwards, is now just above 3.7%, near the bottom of the range it has been in since last August. Bloomberg's dollar index is at its lowest level since last October."
"2-year US swap rates are back below 0.5%, barely above Euro area levels. At 80bp, the 3yr Spain/German spread is at its lowest levels since April 2010."
"These are the two components of my silly EUR/USD model and the result is that this is back at its highest levels since early January. UK/US 2yr rate spreads likewise, are testing their widest levels of recent months again, and GBP/USD like EUR/USD will probe highs."
Key Quotes
"The US 1yr rate, 5yrs forwards, is now just above 3.7%, near the bottom of the range it has been in since last August. Bloomberg's dollar index is at its lowest level since last October."
"2-year US swap rates are back below 0.5%, barely above Euro area levels. At 80bp, the 3yr Spain/German spread is at its lowest levels since April 2010."
"These are the two components of my silly EUR/USD model and the result is that this is back at its highest levels since early January. UK/US 2yr rate spreads likewise, are testing their widest levels of recent months again, and GBP/USD like EUR/USD will probe highs."