How To Position In The FX Market In 2013? 5 Trades - SEB
What investors should expect in the FX market in 2013? It will be "a year of continued large economic and political challenges", says Stockholm-based SEB Group. In such an environment, SEB believes that among the G10 currencies, the JPY will be the worst performer next year.
"In addition to poor fundamentals, JPY is considered the most overvalued G10 currency. Hence we expect JPY weakness in 2013 as the market cautiously may start to consider rewarding higher yielding currencies in a low volatility environment," SEB says.
So, how investors should position in 2013? SEB recommends the 5 following FX trades:
1) Sell EUR/SEK at 8.70/75-level, targeting 8.30 and with a stop above 8.90 .
2) Buy NOK/SEK at 1.1600 targeting 1.2100 with a stop below 1.1420
3) Sell GBP/NOK at 9.10, targeting 8.70, with a stop above 9.30.
4) Buy AUD/JPY at 84.00, targeting 90.00 with a stop below 80.
5) Buy a 6 mth 82.0 USD/JPY Call with 2mth KI window at 80.50, cost 0.95.