News Column

CURRENCY STRATEGIST CHRIS VECCHIO ANALYST'S PICK

July 8, 2014



My pick: Long sterling-Swissie, short euro-sterling, short euro-dollar Expertise: Fundamental and technical analysis with risk management Average time frame of trades: A few days to a few weeks The ECB's "lower for longer" stance is prohibitive for the euro, because sterling and the US dollar are being bombarded with strong economic data and rising sovereign yields, as market participants start to price in interest rate hikes from the Bank of England and the Federal Reserve. In this interim period of ECB inaction, we turn our attention outwardly to the Bank of England and the Fed as the more significant drivers of price action in euro-sterling and euro-dollar (and sterling-Swiss franc and dollar-Swiss franc, given the highly significant, nearly perfect positive correlation (~+0.92 daily) between the euro and the Swiss franc since September 2011).


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Source: City A.M. (UK)


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