Using weak EUR/USD to buy EUR/GBP

Huitong Network10month24Daily News - Monday(10month24day)Societe Generale(SocGen)As the US Treasury yield continues to rise, there may be a significant increase at some point in the next six months. How should we profit from the continued decline in the Eurodollar? The specific viewpoints are as follows.

Faxing: From0.8620Do Duo Ou/Pound, focusing on whether market confidence will continue to decline

From the spot market perspective, there is a tendency to use the weak EUR/USD to buy EUR/GBP. The current risk is that in the context of political and economic uncertainty that will damage British treasury bond bonds, sterling and the stock market, further loss of confidence in British assets in the market may make the rise of euro against sterling almost equal to the decline of sterling against the dollar.

The two major tail risks are the decline of the pound and the rise of the euro, which may cause significant fluctuations in the euro against the pound. The current danger is that, as can be seen from the volatility of low enterprises and the narrow trading range, the pound has undergone a significant adjustment, but from a trend trading perspective, the euro against the pound is very likely to lean upwards.

A major threat that the market should not exaggerate is the terrifying state of the UK's balance of payments. The current account deficit in the UK exceeds300The speed of expansion is billions of pounds, but the situation will quickly improve. The deterioration of the current account deficit is mainly due to investment income. The weak pound, rising oil prices, and commodity prices will help adjust this trend.

The strong pound and weak commodity prices did indeed impact the overseas profits of large UK resource companies, but oil prices priced in pounds rebounded rapidly. This is worth paying attention to, especially when the current accounts for the fourth quarter of this year and the first quarter of next year are announced next year.

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