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13 Feb 2013
Forex Flash: Rebalancing to go ahead at the expense of EM – Societe Generale
Sebastien Galy, Senior FX Strategist at Societe Generale believes that rebalancing will go ahead at the expense of Emerging Market currencies.
He is remaining short GBP/USD and looking to long USD/JPY at 90 and strategically, he writes, “ we like long Vega in EM/USD and short gamma on the chance that the broader EM/USD position will eventually correct later in the coming weeks. Short GBP/USD is partly an expression of this. US retail sales in Jan will likely survive the hit from the 2% hike in taxes supporting USD/JPY and CAD vs USD.”
He is remaining short GBP/USD and looking to long USD/JPY at 90 and strategically, he writes, “ we like long Vega in EM/USD and short gamma on the chance that the broader EM/USD position will eventually correct later in the coming weeks. Short GBP/USD is partly an expression of this. US retail sales in Jan will likely survive the hit from the 2% hike in taxes supporting USD/JPY and CAD vs USD.”