Forex Flash: USD relatively weak for next 2 years - HSBC

“Over the next two years we see the dollar remaining relatively weak, as the US continues to struggle with its fiscal deficit,” the HSBC Global Currency Strategy Research Team says, adding: “We see the euro remaining relatively strong, as the sovereign debt problems are gradually addressed. Upward pressures on many EM currencies may intensify, but official resistance to appreciation will be strong.”

“Once US economic recovery is better established,” they add, “we would expect the dollar to move back towards long term fair values. We expect JPY to remain relatively strong longer term for structural reasons, but expect CHF to unwind some of its extreme overvaluation,” the Team concludes.

Feb 4, 2013

Forex Flash: CAD net longs reduced - Nomura

The Loonie has had the largest change in investors positioning, notes Nomura FX strategists, "following the indication by the BoC that a rate hike is ‘less imminent than previously thought’ and the weaker than expected CPI."

Forex Flash: Draghi isn't likely to begin talking down the Euro just yet - UBS

According to Mansoor Mohi-uddin, Managing Director of Foreign Exchange Strategy at UBS Macro Research: “The euro continues to benefit across the board from the unwinding of last year's short positions,” the analyst says, who adds: “Given the likely dovishness of Japan's, Britain's and Australia's central banks, EURJPY at 1.26, EURGBP at 0.87 and EURAUD at 131 are likely to be bought on dips still for now. But euro bulls also need to be wary of increased verbal interventions,” Mr. Mohi-uddin suggests.