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23 May 2013
Flash: Analyzing structural G10 positioning and safe havens – UBS
FXstreet.com (Barcelona) - In G10, “structural positioning (post-QE commencement in 2009) is short dollars and euros – the 'safe-havens' of the JPY and CHF enjoy significant net longs (especially vs. the euro).” notes Research Analyst Gareth Berry at UBS.
The standout longs are actually in NOK, SEK and CAD - which have served as hedges against 'QE risk' from the US and Europe. Despite all the talk of 'policy normalization' in 2013, especially on the dollar leg, with the exception of USD/NOK purchases, we do not see any meaningful 'unwinds' yet.
“This is consistent with trades are not there to back up policy exit as lack of improvement in fundamentals in developed markets means a full unwind is hard to justify. Still, in positioning terms, the euro will benefit most from a 'surprise' exit.” Berry adds.
The standout longs are actually in NOK, SEK and CAD - which have served as hedges against 'QE risk' from the US and Europe. Despite all the talk of 'policy normalization' in 2013, especially on the dollar leg, with the exception of USD/NOK purchases, we do not see any meaningful 'unwinds' yet.
“This is consistent with trades are not there to back up policy exit as lack of improvement in fundamentals in developed markets means a full unwind is hard to justify. Still, in positioning terms, the euro will benefit most from a 'surprise' exit.” Berry adds.