Forex Flash: Breaking the mould – OCBC Bank

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FXstreet.com (Barcelona) - Looking to EUR/USD, OCBC analyst Emmanuel Ng feels that the weight of consensus is tilted to the south for the pair on the belief that the Eurozone economy remains mired in recession and with the ECB potentially loosening further.

Ng feels contrarian in this sense, given that he feels that the pair will likely continue to tradeprimarily within a risk on/risk off metric with the ECB on hand to forestall systemic risk. He writes, "macroeconomic weakness is also commonly cited for the expected generalised weakening of GBP/USD"

He feels that the implication is therefore that the market at large is expected to veer towards broad USD strength on the basis on a relatively faster improvement in the US economy. The Dec 12 FOMC minutes released last week ignited this train of thought although we do not think the Fed is as yet ready to stage a reversal of its monetary policy stance at this juncture. More importantly, Ng feels that the results seem to imply a market abandoning the Risk-On/Risk Off paradigm witnessed since the Lehman crisis and reverting back to trading off fundamentals and a US-centric dollar story.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Forex and Currencies

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