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26 Feb 2014
Flash: USD strength would need more patience - Societe Generale
FXStreet (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale, would prefer to wait for a better moment to reinstate USD longs.
Key Quotes
"The US Richmond Fed index of manufacturing activity and the Conference Board's consumer confidence index both came in a good bit weaker than expected when released yesterday but at lead house price data were strong. We will blame the weather, of course, and that is surely the right thing to do."
"But the temptation to conclude that QE and ZIRP have done more for asset prices than for real economic data won't go away. Only when we get a clearer picture of the underlying strength of the US economy will be be able to conclude anything meaningful."
"For now, that leaves Treasuries in their range (but drifting down bait within it yesterday), the dollar steady and equities flirting with new highs. It's all becalmed and new home sales data this afternoon - probably soft - are not going to shake things up."
"We want to wait for better levels to re-instate USD longs vs CAD, AUD, NZD, we want to be ultra-patient with GBP shorts, and we aren't terribly interested in EUR/USD while it is in a 1.3630-1.3840 range. Volatility will continue to fade away."
Key Quotes
"The US Richmond Fed index of manufacturing activity and the Conference Board's consumer confidence index both came in a good bit weaker than expected when released yesterday but at lead house price data were strong. We will blame the weather, of course, and that is surely the right thing to do."
"But the temptation to conclude that QE and ZIRP have done more for asset prices than for real economic data won't go away. Only when we get a clearer picture of the underlying strength of the US economy will be be able to conclude anything meaningful."
"For now, that leaves Treasuries in their range (but drifting down bait within it yesterday), the dollar steady and equities flirting with new highs. It's all becalmed and new home sales data this afternoon - probably soft - are not going to shake things up."
"We want to wait for better levels to re-instate USD longs vs CAD, AUD, NZD, we want to be ultra-patient with GBP shorts, and we aren't terribly interested in EUR/USD while it is in a 1.3630-1.3840 range. Volatility will continue to fade away."