Barclays trader still looks to buy USD/ZAR on dips to 8.65 or chase it through 8.75. Says on the order board this morning are stops below 8.60 while local exporters are sitting above 9.00. Adds that Wednesday’s dip to near 8.61 took out some weak stops and fast money was seen stopping out and rebuying USD/ZAR on that dip. Support comes in at 8.55. USD/ZAR at 8.6592.
Turkish lira to be capped for now says Societe Generale explaining that concerns about inflation and geopolitical risks are likely to prevent any significant appreciation in the short term. But adds that an improvement in the current account deficit in the coming months, combined with Fitch’s positive comments Wednesday, are nonetheless positive for TRY
The outbreak of optimism about a recovery in the US economy should be approached with caution, according to Societe Generale. “Someone, somewhere near you, is now going to suggest that the US economy is recovering,” says Societe Generale currencies analyst Kit Juckes. “Then, they are going to try and work out what it means for the dollar!” Mr. Juckes adds that until recently everyone was very gloomy about the chances of a US recovery, but now the prospect of QE supporting housing and growing exports is signalling genuine economic rebalancing. “I have a preference for US real estate, or equities, relative to the euro, or the overvalued Australian dollar,” Juckes says.
SocGen remains long USD/JPY short GBP/USD and short EUR/USD.
Turkey in the spotlight this week says Rabobank with the CBRT scheduled to announce its latest monetary policy decisions Thursday. Rabobank expects the benchmark repo rate to remain at 5.75% unless Turkish CPI inflation falls below the 5% target or TRY appreciates rapidly and so the reserve option coefficient policy tool fails. Sees the CBRT lowering the upper bound of the interest rate corridor by 100bps although adds 50bps can’t be ruled out. But says attention will be firmly on the new Reserve Option Coefficient policy tool. “We expect these to be raised moderately to the tune of around 0.1-0.2,”
Marex Spectron likes MXN because the outlook in South America is generally positive. “MXN remains a buy in the spot market on any rallies in USD/MXN with limits the topside and dampens the variance,” says the broker. Marex Spectron also suggests steering clear of ZAR because of the political tension and the poor economic growth outlook in South Africa.
Reports Japan Prime Minister has gave an instruction to prepare new stimulus measures ahead of 30 October BOJ meeting.
Standard Bank likes long AUD/NZD and EUR/JPY, saying its indicators have turned bullish on both. The bank buys AUD/NZD at the current 1.2620 rate, with targets of 1.2790 and 1.2940 and a stop at 1.2350. In EUR/JPY, the long is from 103.25, looking for 104.50 and 106.25, with a protective stop at 100.90.
BNP Paribas looks for SEK strength to be shortlived and therefore retains a bearish stance on the Nordic. SEK has gained sharply Thursday, a move linked to a relatively hawkish opinion piece from Riksbank Governor Ingves answering criticism for not lowering rates further. However, BNPP says the tone of the article was very much longer-term, so may not have much bearing on the rate cut expected for the October meeting.
Czech National Bank governor warned again FX intervention can be used in any moment to weaken the currency (CZK). EUR/CZK spikes higher on the news.
EURUSD seems supported at 1.3050. Heard the earlier buying at 1.3050 is central bank related.
There are talks EUR/USD will be sold at the ECB fixing, 12:15 GMT
Morgan Stanley is looking for the current risk-positive environment to hold. This should allow EUR to keep with its recovery trend and so the bank stays bullish. AUD and GBP are not benefiting however and so MS holds a bearish strategy for these two in its medium-term portfolio. The bank is running long EUR/USD, EUR/GBP and USD/JPY, short AUD/NZD. That pack trade at 1.3044, 0.8128, 79.79 and 1.2615 respectively.
Citi says CZK to weaken to 25.6 against EUR in 6-12 months compared with EUR/CZK currently at 24.876-24.896 as ample liquidity on markets and placated concerns about any immediate specter of Greece’s exist from the euro zone, support CZK in the short-term, Citi analysts Jaromir Sindel says. “In the short term our prediction for EUR/CZK is at 25.00, above our previous prediction (of EUR/CZK just under 25.00),” Sindel says. “The Czech currency will remain under the pressure of various factors, but the likely push by the central bank to relax monetary conditions further will set the course for the koruna,” he says. EUR/CZK trades little changed on the day from CZK24.88 late Friday and is likely to remain range-bound for the rest of Monday, local currency traders say.
(EUR/CZK is provided by ForexTrading.com)
CZK trades weaker, tracking the region with EUR/CZK at 24.915-24.930, up from 24.88 late Monday but below Monday’s weakest level at 24.90. “Weaker retail sales data in Poland weaken the zloty, which in turn hurts the koruna and other currencies in the region.”
EUR/USD decline is likely to be temporary says BNP Paribas as the improving capital inflows picture will have a stronger impact than the short-squeeze seen of late. The bank says EUR/USD may still see some pressure, with periodic bouts of USD support should the earnings season, which is not yet half-way through, disappoint. EUR/USD now at 1.2937, the bank says the 200DMA at 1.2835 is the next key support level.
The risk following the FOMC’s upcoming statement would likely be for a dollar rally, says Andrew Busch of BMO. While the market widely expects little news out of the statement, he notes complacency surrounding it could shift to a pro-dollar view if policymakers acknowledge the drop in the unemployment rate or improved housing data. Such a move could be especially apparent against the euro because the Fed taking notice of improved US data would further draw a differentiation with the euro zone, which just got another batch of disappointing numbers.
Speculations one the key rating agencies will downgrade or revise their stable outlook on the US (seen as the main reason for the sharp reversal in the US indices).
I am in a decent profit from selling SP500. I hope you saw the above post in time to make money on it. Good luck 
It’s safe to buy dollar-yen, but not necessarily at the current level of Y80.05, says Richard Franulovich at Westpac. Buy it at Y79.60, which has been the support level for the past few days, he says. “That’s a good spot to place a buy order,” he said, adding “sell at anything above Y81.” Any weakness in dollar-yen will be limited, he says “because it looks like an uptrend that would last until the BoJ meeting next week. Then, it depends on what they do.”
Hi Banker, why delete the post?