Forex Flash: Euro-politics, US sequester and Chinese data feed risk-off sentiment - Societe Generale

Kit Juckes, Global Head of Currency Strategy at Societe Generale notes that the US sequester, softer Chinese non- manufacturing PMI data, and on-going Italian political uncertainty are giving us, again, a somewhat risk averse start to the week.

He feels that we are in a slightly strange market where risk aversion rules, but major equities are in a bull market all the same thanks to Fed policy. However, he writes, “For all that though, starting the week long USD against GBP, AUD, and a raft of other over-priced European currencies (EUR, CHF, NOK) seems the right strategy. Long-term yen shorts remain in place, but USD/JPY is firmly in its 91-94.5 range and an upside break probably requires some action (rather than just words) from the new regime.”