SEB Report: New FX Scorecard Sees Swedish Currency Strengthening

Introducing our new SEB FX Scorecard
We are pleased to present the first edition of our redesigned Currency Strategy amending and expanding each individual currencys various rating categories. Further, we summarize our extended analytical currency framework in our FX Scorecard (page 2) with each rating group weighted according to our assessment of what the FX market will regard as the most important general theme and characteristic. The new rating categories are Valuation, Positioning, Liquidity, Event Risk and Global Cycle. Pre-existing categories include Economic Fundamentals, Monetary policy, Capital Flows and Technicals. In addition, previous right side pages have been modified to incorporate corresponding text and charts for each new ranking category. Emerging market currencies are included but have not yet been converted into the new Scorecard. As always we welcome all comments on the changes made from our readers. Regarding the current FX market outlook, it is admittedly very uncertain. Europe faces a potential break-up of the common currency union unless the EMU rapidly implements even more significant, concerted, and far-reaching economic and political measures to rectify the situation including issuing Eurobonds and making preparations for fiscal union. Market uncertainty justifies a defensive strategy in the coming month. If as we anticipate Greece elects a pro-euro government and Spain receives its bank recapitalization package then our main scenario assumes financial market stabilization towards the end of Q2 and a return to cautious appreciation by sound peripheral G10 currencies. Regardless of risk appetite we expect EUR/USD to slowly grind lower as reserve managers have no alternative at present but to buy the dollar. However, this is not the time to expect the USD to return to its fundamentally justified valuation as it scores lowly in all our traditional rating categories (i.e. Fundamentals, Monetary Policy and Flows). Finally, we expect the SEK to appreciate in H2 2012, but we have also raised our EUR/SEK forecasts for the same period.
WEDNESDAY 23 MAY 2012
EDITOR Carl Hammer + 46 8 506 231 28
BUY USD VS GBP & JPY We forecast JPY to have finally topped out in trade-weighted terms. Although we expect only a gradual rise in USD/JPY the risk reward is appealing. GBP has appreciated lately however valuation is not as attractive as it may appear and the UK economy is still weak. BUY SCANDIES VS EUR, GBP & JPY Over the past few weeks scandies have weakened to levels attractive for longterm positive positions again. Meanwhile GBP is trading above our short- and long-term fair value models and we remain cautious on the euro outlook. JPY valuation is very stretched, in particular vs. Scandies. SELL CAD/NOK In the previous Currency Strategy from January, we advocated selling NZD/NOK as a relative trade on commodity currencies. CAD has now received a relatively low grade on primarily a rich valuation.
SEB FX Score card

Total weighted score, 6 mth outlook
SEK AUD NOK USD CAD NZD EUR GBP CHF JPY
-1,5
-1
-0,5
0,5
1,5
You can also find our research materials at our website: www.mb.seb.se. This report is produced by Skandinaviska Enskilda Banken AB (publ) for institutional investors only. Information and opinions contained within this document are given in good faith and are based on sources believed to be reliable, we do not represent that they are accurate or complete. No liability is accepted for any direct or consequential loss resulting from reliance on this document. Changes may be made to opinions or information contained herein without notice.
Currency Strategy
Forecasts and FX Scorecard

FX forecasts
22-maj
EUR/USD EUR/JPY EUR/GBP EUR/CHF EUR/SEK EUR/NOK EUR/DKK EUR/RUB EUR/PLN EUR/HUF 1,2796 101,69 0,8082 1,2012 9,0955 7,5953 7,4321 39,80 4,3104 296,29 79,47 1,1975 1,583 1,0162 0,9387 0,9923 0,7660 7,1081 5,9357 31,10 6,3211
SEB Q3 12
1,26 103 0,82 1,20 8,85 7,60 7,43 38,9 4,20 295 82 1,16 1,53 1,03 0,95 1,00 0,75 7,02 6,03 30,9 6,28
Q4 12
1,25 105 0,81 1,21 8,70 7,45 7,43 38,0 4,10 290 84 1,17 1,54 1,02 0,97 1,03 0,75 6,96 5,96 30,4 6,20
Consensus* Q3 12 Q4 12
1,29 105 0,81 1,21 8,90 7,55 7,44 38,4 4,20 227 82 1,18 1,59 0,99 0,94 1,03 0,81 6,90 5,85 29,9 6,23 1,30 106 0,81 1,22 8,82 7,50 7,45 39,4 4,15 226 82 1,18 1,53 0,98 0,98 1,04 0,82 6,78 5,77 29,8 6,18
Contents
Forecasts SEB FX Scorecard The big picture USD EUR JPY GBP CAD AUD NZD CHF SEK NOK DKK RUB PLN HUF CNY Guide to indicators Seasonal patterns Speculative positions Contacts 2 2 4 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 39 40 41
Cross rates
USD/JPY NOK/SEK GBP/USD USD/CAD USD/CHF AUD/USD NZD/USD USD/SEK USD/NOK USD/RUB USD/CNY
* Bloomberg survey FX forecasts.
SEB FX Scorecard, G10

Weights Fundamentals 15,0% Monetary policy 20,0% Flows 15,0% Valuation 15,0% Positioning 2,5% Technicals 7,5% Liquidity 7,5% Event risk 10,0% Global cycle 7,5% Total weighted score USD -1 -1 -2 +2 -5 +4 +3 0 -2 -0,0 EUR 0 -1 +1 +1 +5 -5 +2 -4 0 -0,3 JPY -1 -2 0 -4 0 +2 +3 0 -2 -0,8 GBP -1 -1 -1 +1 -5 +2 +1 0 0 -0,4 CAD +1 +1 +1 -2 -5 -4 -1 0 +2 -0,3 AUD +2 +1 +1 -1 +5 -4 -2 0 +2 +0,3 NZD +2 0 -1 -1 +5 -5 -3 0 +1 -0,3 CHF +1 -2 +1 -5 +5 -1 0 0 0 -0,6 SEK +2 0 +3 +2 -1 -3 -3 0 +1 +0,6 NOK +3 0 +1 -1 -1 -3 -3 0 +1 +0,1
FX Scorecard - Contributions to total score

SEK Weighted score: 0,6
Fundamentals Monetary policy Flows Valuation Positioning Technicals Liquidity Event risk Global cycle -0,8 -0,6 -0,4 -0,2 0,0 0,2 0,4 0,6 0,8
NOK Weighted score: 0,1

Currency Strategy
USD Weighted score: 0

EUR Weighted score: -0,3

JPY Weighted score: -0,8

GBP Weighted score: -0,4

CAD Weighted score: -0,3

CHF Weighted score: -0,6

AUD Weighted score: 0,3

NZD Weighted score: -0,3

Currency Strategy
A New Currency Strategy introducing the SEB FX Scorecard

We are pleased to present the first edition of our redesigned Currency Strategy amending and expanding each individual currencys various rating categories. Further, we summarise our extended analytical currency framework in our FX Scorecard (page 5) with each rating group weighted according to our assessment of what the FX market will regard as the most important theme and characteristic. We believe unlocking this FX market beta (i.e. identifying the common currency driver) is usually the most rewarding process in generating alpha. Its object is therefore to ensure a more dynamic process, enabling the new system to better capture short-term FX market developments as well as pre-existent medium- to long-term rating categories. For this purpose we have added Valuation, Positioning, Liquidity, Event Risk and Global Cycle categories to those already established, i.e. Economic Fundamentals, Monetary policy, Capital Flows and Technicals. The FX Scorecard will be used over two different timescales. The new and perhaps more rapidly changing rating categories will be awarded a higher weight in a short-term Scorecard. Over a period of 3-6 months (the default period used by Currency Strategy both generally and elsewhere in this report) weights will differ as discussed below on page 4. BIG PICTURE OUTLOOK A DEFENSIVE PERIOD AHEAD BUT FOR HOW LONG? In our last Currency Strategy published in Jan 2012 we stated that we expected the Fundamentals category to prevail and for peripheral and sound G10 currencies to gain at the expense of their large (and tired) G4 counterparts. Over the past two years we have expressed a bias towards buying the fundamentals basket on weakness having seen reserve managers continue to diversify away from G4 currencies into AUD, CAD, NZD and Scandies. As shown in the chart below small currencies continued to outperform until March this year when global equity markets began declining again. relatively rapidly the Euro-zone again moved to centre stage as the positive effects of previous efforts by central banks to ease liquidity (e.g. USD liquidity), particularly the two ECB 3-year LTROs, faded. With the benefit of hindsight we were too optimistic that the Euro-zone would continue to muddle through based on various EU/IMF bail-outs, private sector debt write-downs in Greece, and ECB liquidity operations. Consequently, while our global growth scenario assumes recession is avoided, we believe downside risks have once again increased due to adverse Euro-zone developments. OUR GLOBAL GROWTH SCENARIO. SEB published its latest edition of Nordic Outlook two weeks ago: we still expect the global economy to avoid recession. Indeed, we have raised our PPP-adjusted growth forecast to 3.6% in 2012 and 4.1% in 2013. Despite the fact that we intend to lower our Chinese GDP growth estimate slightly, worldwide expansion continues to be driven by developing countries. US GDP growth remains at trend while the Euro-zone looks set to contract by 0.6% this year, followed by a very modest recovery from 2013. In the Nordic region, Norway continues to post the strongest growth based on solid domestic demand (we forecast trend GDP growth of 2.5% in FY 2012/13). As expected, Swedish growth is adversely affected by the Euro-zone crisis and is therefore projected to increase by 0.7% this year. Latest Statistics Sweden data were ambiguous with the labour market more resilient than many had feared but industrial production much worse than expected.
Global GDP growth

Change (%) y/y United States Japan Germany China United Kingdom Euro-zone Nordic countries Baltic countries OECD Emerging markets World, PPP* World, nominal
Source: OECD, SEB
2010 3.0 4.5 3.7 10.4 2.1 1.9 2.7 1.1 3.1 7.3 5.3 4.6
2011 1.7 -0.7 3.0 9.3 0.7 1.5 2.5 6.2 1.7 6.2 3.9 3.2
2012 2.5 2.2 0.8 8.5 0.5 -0.6 1.1 2.5 1.6 5.6 3.6 2.9
2013 2.7 1.7 1.6 8.7 1.7 0.8 2.0 3.4 2.1 5.9 4.1 3.4
* Purchasing power parities
Initially the trigger for weakening risk appetite was signs that global growth was slowing once more. However,
Alternatively, we may consider current global growth momentum based on the OECD composite leading indicator. In y/y terms, it peaked in H2 2010 before subsequently deteriorating. Our internal model (GLEI)* which aims to lead the OECD indicator by approximately six months suggests that in y/y terms the leading indicator will bottom in September this
Currency Strategy
year. In other words, we should expect leading indicators to continue to fall over the summer. This development will remain a drag on risk appetite, especially with the global economy and its immune system already weakened by the euro currency and Eurozone debt crisis. ALL EYES ON THE GREEK ELECTION ON JUNE 17. With the benefit of hindsight, it is particularly surprising that the market ignored the risks associated with the Greek elections. Instead investors focused on the potentially adverse outcome of Mr Hollande being elected French president, a result which has in fact produced very little market reaction at all. While he has restored to the political agenda the question of considering and necessity of pursuing economic growth, he is unlikely to pursue particularly expansionary policies on his own. Consequently, going forward Greece is likely to remain in focus. The election held at the beginning of this month was a close call: the two coalition parties, New Democracy and PASOK (which also negotiated the second bail-out package and PSI agreement) received votes corresponding to 149 of 300 parliamentary seats, only two short of an absolute majority. Today, everyone is a Greek political scientist, at least until the next election on June 17. What is the likely outcome? Current polls suggest a range of outcomes. Last week Reuters reported that the old government coalition would receive a majority of votes if its poll findings are replicated in June. So, the ultimate question is whether the Greek people will vote according to their stated preference of staying in the euro (above 70% according to most opinion polls) and endorse a government committed to continuing tough austerity measures to qualify for more aid transfers. For ourselves, we regard this as the most obvious outcome as we believe the EMU and IMF have absolutely no intention of varying the conditions of their current rescue packages. Certainly, the wrong election result will most probably result in Greece having to leave the euro. Even if it elects a pro-euro government, we think it is as likely to abandon the currency in the longer term as it is to stay in.
Given the already huge sums invested both politically and economically, we believed that the process by which the Euro-zone breaks up could a long term one. However, latest developments in Greece have once again substantially increased the risk of it doing so. Despite the attractive levels at which some peripheral G10 currencies trade, present uncertainties are too large to recommend a confident buy currently.
EURO SCENARIOS AND FX MARKET THEMES. In the immediate future the outcome of the euro crisis will obviously be the main driver for the FX market (and for all other financial markets). Our main Euro-zone scenario is now more negative than previously; in particular the euro has begun a period of potentially rapid value destruction with the costs involved in breaking up the common currency zone still unknown. The irony for the euro is that the common currency does not suffer from an external deficit (i.e. a current account deficit) like the US, UK and commodity currencies. Instead, it is haunted by the zones internally weak, potentially inappropriate institutional political and economic framework. Consequently, euro currency institutions must take a firmer and more far-reaching control of the situation. Ultimately a non-optimal currency union needs common fiscal policies and/or euro-bonds, representing progression towards full economic and monetary union. However, with Europeans generally (in some cases aggressively) opposed to full political integration, other actions (apart from adopting more common fiscal policies) look likely over the next year to stabilise the situation. Consequently, the ECB will have to do more. While we expect the European Central Bank to do whatever is necessary to provide banking sector liquidity, the eurosystem is already awash with cash while the Eurodollar cross currency basis swap shows only a slight increase in the cost of swapping euro- for dollar funding. In other words, current weaknesses exist elsewhere, involving sovereigns and their respective direct funding situations (Spanish and Italian bond yields are back at pre-LTRO levels) which are susceptible to no quick solution in the near-term. The current tendency among politicians to recommend implementing measures to stimulate growth will not alleviate pressure on peripheral yields. Therefore, with the exception of the SMP programme, we see very little suggesting an improved outlook for peripheral spreads. SEB expects the Spanish banking sector to receive a bail-out package of EUR 150bn to recapitalise those worst affected by the real estate collapse this together with our belief that the European Investment Bank will also receive EUR 50bn (leveraged to EUR 300bn) to be utilised for longterm investment projects could stabilise the situation later this summer.
EUR NEER (reversed)
Peripheral risk
Currency Strategy
Therefore, based on our sceptical near-term expectations, we regard a defensive view as most appropriate pending directional views on future Euro-zone developments and what negative effects of current unprecedented developments will impact leading indicators, commodity prices and global growth. However, we dont see the risk reward appealing chasing the market as to some extent a continuation of present bearish conditions is already reflected in and discounted by financial markets. In recent weeks global bond markets have rallied with German and Swedish 10yr bonds hitting new record lows. Pro-cyclical currencies such as the Aussie and the krona have also already weakened substantially. Consequently, one could argue that the market offers short-term opportunities for risk-on positions based on Greek opinion polls and on an earlier-than-expected Spanish bank rescue package. STABILITY AND A CAUTIOUS RECOVERY EXPECTED H2 2012. We expect the Fed to launch QE3 after the summer, loosening monetary conditions even further. China will also continue to ease monetary policy while the BOJ will do whatever is necessary to defend the JPY from excessive appreciation. Central banks in peripheral G10 countries have also adopted an easing bias. Furthermore, according to our equity analysts, our growth forecasts are compatible with rising equity markets in H2 2012 and GLEI leading indicators bottoming in September this year. On this basis, our 3-6 month outlook includes a weaker EUR, JPY, CAD, NZD and GBP vs. USD, AUD and Scandies as well as many EM currencies. SCANDIES DISLIKE GLOBAL UNCERTAINTY. The SEK and NOK are amongst our long-term recommended currencies based on their favourable valuations, strong fundamentals and continued reserve accumulation of domestic assets. Recent SEK depreciation has more to do with speculative trading than pure fundamentals.
we have raised our H2 2012 EUR/SEK forecasts. Exporters hold large FX deposits which they may begin exchanging (at least partly) back into SEK on further weakness. We would be surprised if EUR/SEK trades above 9.30 unless Euro-zone developments move outside our base assumptions (e.g. through disorderly Euro-zone exits). Norway is better insulated against shocks emanating from Europe than Sweden although liquidity is a negative factor for the currency. A rapidly falling oil price (not our base case scenario) could potentially cause foreign investors in the Oslo Stock Exchange to exit rapid as they did in 2008, then the main factor behind the currencys rapid depreciation. Overall we regard the NOK as a market performer: based on strong domestic fundamentals and the likelihood that Norges Bank will raise interest rates, albeit still a premature expectation. Also increasing FX purchases later this year are likely to prevent the NOK from appreciating consistent with its own stronger fundamentals. We expect EUR/NOK to continue range-bound between 7.457.75 for now. We believe commodity currencies will weaken before stabilising with the Aussie trading close to its long-term fair value and the CAD still expensive. New Zealands domestic fundamentals remain relatively poor (as are developments in its terms of trade) leading us to expect the NZD to remain weak.
NOK millions
While our long-term investment scenario remains intact, we concede that the SEK could weaken even further as the euro-crisis has no near-term solution. Consequently,
TOO EARLY TO EXPECT USD TO MOVE TOWARDS FAIR VALUE? Although the USD is the cheapest G10 currency at present, we have stated repeatedly there are several good reasons why that is so. While the US current account deficit has improved lately, its financing still requires a very large share of global savings. The US presidential election will also make it abundantly clear that politically at least; fiscal austerity is a long way off being resolved. The US will however be able to finance such deficits due to the current absence of any other viable global reserve currency. Indeed, the latest IMF COFER data showed that global reserve managers increased their USD allocation (to now 62%, China excluded).
EUR/SEK
Index
Currency Strategy
SEBEER Fair value, USD Index

150 140 130 120 110 100 90 80 70 60
2000 2002 2004 2006 2008 2010 2012
140 130 120 110 100 90 80 70 60
While the reflationary bias of central banks provides little support for the USD, if commodity prices continue much lower going forward (SEB expects a slight increase in H2 2012) the USD will strengthen further. We expect the currency to remain cheap although we also believe the trade-weighted greenback will appreciate. The euro is a less viable option into which large reserve managers might divest, hence the USD may attract more support than we expect. As we believe USD/JPY has bottomed out we see support for the view that the USD index will appreciate cautiously in 2012. SEB FX SCORECARD AND WEIGHTS. The weights we attach to each rating category are obviously crucial inputs in determining the overall score the currencies: Fundamentals: 15% Monetary policy: 20% Capital flows: 15% Valuation: 15% Positioning: 2.5% Technicals: 7.5% Liquidity: 7.5% Event risk: 10% Global cycle: 7.5% Over the next 3-6 months we expect markets to stabilise with traditionally more important FX market drivers reasserting their usual significance. We therefore weight Fundamentals, Monetary policy and Flows at 50%, a still fairly modest level given the need for short-term indicators to retain relatively large weights over the short- to medium-term. If the adverse effects of global economic uncertainties on both European and worldwide growth decrease, we would anticipate more rapid return to fundamentally strong currencies than is currently expected. Monetary policy is highest weighted with the scenario for each currency somewhat ambiguous. We expect the currencies of those countries whose central banks ease monetary policy to continue to depreciate near-term as they have in recent months. However, later this year, we believe markets will reward these currencies to an equal and opposite extent, focusing instead on Fundamentals.
NEW CURRENCY STRATEGY RATING CATEGORIES. Valuation: Currencies often tend to move in very longterm cycles both up and down. Normally fundamental valuation is not an issue for FX investors as long as the deviation is not large. Sometimes however currencies become significantly under- or overvalued affecting the underlying economy. Positioning: This rating category is most important in determining the very short-term outlook up to potentially one month. Grades are based on non-commercial position data presented on Friday night (through the Commitment of Traders report) and reviewed by us every Monday morning in Speculative Positions. When speculative accounts are building a long position this category is regarded as positive, if positioning becomes extreme the grades switch, becoming extremely negative based on the obvious risk of a reversal taking place due to profittaking involving either very long- or short positions. Liquidity: This rating category attaches considerable weight to size and turnover of the currency and is increasingly significant during periods of stress. Liquidity will normally be positive for large, traditional, safe haven currencies including the USD, JPY and CHF. Event Risk: This category is currency specific. In it we try to quantify a possible event not easily captured in economic data. In this report the only currency to be so categorized (negatively) is the euro where event risk is high. Nevertheless, it remains difficult to establish precisely just how bad a negative scenario might be. Our new publications right hand pages (redesigned to incorporate our new rating categories) include possible, positive and negative event risks for each currency. Global cycle: This category expresses our views on developments in the global economy and risk appetite together with our estimate of effects on each specific currency. For this report we see stabilising risk appetite in H2 2012 and hence a small positive for risky currencies. SUMMARY. The global uncertainties are reflected in our short-term outlook which assumes a continued flight to safety with categories such as Positioning, Liquidity and the Global cycle to be governing. However, barring an immediate collapse and disorderly break-up of the euro (which is still not our main scenario) financial markets currently discount a scenario arguably worse than our base case for global growth. In the near-term, most if not everything will revolve around the outcome of next months Greek elections and the probability of the country remaining in the Euro-zone. We think it more likely than not that the Greeks will vote for a eurosupportive government. However, even if it does we regard the likelihood that the country will proceed to eventually abandon the euro as at least 50%. However, we also argue that markets will stabilise in H2 2012, supporting fundamentally sound currencies as they reappreciate from levels below those prevailing currently. *more info on GLEI from SEBs Mattias Sundbom
Currency Strategy
US dollar
With the ongoing euro zone debt crisis the USD has once again been favoured due to its superior liquidity and for being the only true reserve currency. Unlike several Euro zone countries and UK, the US economy continues to grow, though at a modest pace. Indeed the US public deficit problem is far from solved, but at least until the run-up of the Presidential election campaign after summer this is likely to have a limited impact on the value of USD, with the euro crisis getting all attention. Eventually the US will have to deal with the debt situation and the current account deficits, which may be a less friendly environment for the USD although positive growth seems to compensate for these shortcomings. ECONOMIC FUNDAMENTALS The US recovery continues albeit at a modest pace and US growth slowed to 2.2% in Q1 compared to 3% in the previous quarter. Labour market slowly improves with lower unemployment and fewer people loosing their jobs but recovery will probably be more modest going forward if not growth pick up. In addition there are several signs indicating the US housing market may finally stabilize with inventory of unsold homes being the smallest since 2005. The deleveraging process among households has reduced household debt significantly although there is more to do which will continue to weigh on household demand. We expect the US economy to grow by 2.5% this year and 2.7% in 2013. The agreement to cut spending over the next 10 years and the temporary tax cuts that expire by the end of this year make the medium term growth outlook for the US economy challenging.
USD Weighted score: 0

E U R speculative positio ns U S D /C A D E U R /U S D 1.35 0
1.30 0 1.25 0 1.20 0 1.15 0
10 0 75 50 25 0
S peculative positions
04 05 06 07
-2 5
The lack of significant upside progress in EUR/USD makes the current substantial net long speculative position a burden. Should the sub-1.29-area be revisited, speculative longs will have to be reduced.
-1
MONETARY POLICY To support growth the Federal reserve bank continues use quantitative measures to keep longer yields low (operation twist) with the ongoing programme ending this summer. Moreover the Fed has communicated they will hold the key rate close to zero until late 2014. Should growth outlook deteriorate once again and in particular if this has negative effects on labour demand and unemployment the Fed is likely to launch another round of QE to support growth. -1 FLOWS The flow situation remains negative for the USD with a trade related current account deficit only partly offset by positive net investment incomes. The US current account deficit have stabilised around 3% of GDP in recent quarters. Nevertheless it requires that the US economy can continue to attract foreign capital inflows, which appears feasible short-term, considering what currently goes on in the Euro zone. However, long-term these imbalances may finally spill over into a weaker currency to force a rebalancing of the economy why the long-term outlook for the USD remains uncertain. -2
% of GDP
Contracts (thousands)
12 5
% of GDP
Currency Strategy
SEBEER Fair value, USD Index
US dollar
VALUATION Our internal long-term fair value model,
SEBEER, indicates the USD trade weighted index has been undervalued since 2003. The development in recent years has actually pointed towards an increased fair value. It seems quite clear that the deviation between the indicated fair value and actual dollar index coincides with the time when the euro was established as an alternative global reserve currency, triggering long-term rebalancing flows out of the USD into the euro. Considering other measures for the long-term valuation, as deviation from the long-term average in a real trade weighted index further underline this view of undervaluation. +2
140 130 120 110 100 90 80 70 60

2000 2002 2004 2006 2008 2010 2012
140 130 120 110 100 90 80 70 60
POSITIONING The aggregated net long speculative USD

position is at the longest level seen since June 2010. It has been net long since September 2011 but quite range bound. However, following the latest surge in uncertainty it quickly reached these current high levels. As long as the uncertainty prevails at current high levels the position is expected to continue becoming longer (as market players continue to seek US safe havens) but once thing stabilize there will be some serious normalization of positioning (from safe haven and low yield to riskier assets and higher yield i.e. from USD to other currencies) which should put pressure on USD. -5
75 74 73 72 71 70 69 68 Jan
USD speculative positions

E U R /U S D
1.35 0 1.30 0 1.25 0 1.20 0 1.15 0
10 0 75 50 25 0
30 20 10 0 -10
04 05 06 07
-2 5
TECHNICALS The USD index looks bid within a broader

long-term range with an intermediate early 2011 B-wave high already violated - which in itself targets ~87. The setback following that earlier violation was annoying but did not alter the bullish structure, since it was held well above the bullishly sloped 52week Moving Average. There is a small 2011 reaction high at 83.56 that could work as a temporary speed bump once clearing the yearly high of 81.78 en route the 2009 & 2010 highs, but as long as holding above support at 78.10/77.70 the dollar should be traded from the long side (through buying fading dips and buying upper breaks). Trading above 81.78 would also up the grade for the dollar to+5 from a current +4 reading. +4
The lack of significant upside progress in EUR/USD makes the current substantial net -20 long speculative position a burden. Should Apr sub-1.29-area Oct revisited, speculative Jul Jan Apr the be 11 12 longs will have to be reduced.
Technical view: USD INDEX
LIQUIDITY, EVENT RISK AND GLOBAL CYCLE With its

unique status as the single global reserve currency, especially with all uncertainty currently related to the euro, the USD is a stellar performer as financial markets are ravelled by increased stress and reduced risk appetite. Together with the JPY, the USD tends to gain significantly against all other currencies every time superior liquidity becomes the key driver for financial markets. Short-term there are no clear currency specific risks related to the USD, but the situation is clearly more uncertain long-term as the US remains to decide on how to finally handle the fiscal situation. These troubles have already rendered a cut in the credit rating for the US economy.
Percent
Index
SpeculativeRpositions E U speculative U S D /C A D USD index
positio ns
12 5
50 40
Currency Strategy
The euro
The currency remains in very difficult waters due to the ongoing debt crisis. Uncertainty remains high whether or not the euro zone will be able to solve the crisis without risking a break up. This event risk will be a major drag for the currency going forward. Regarding both the external balance as well as the overall budget deficit, the currency union is in decent shape comparable to other developed countries. With the ECB refraining from introducing new expansionary measures, the downward pressure on the currency will be only be gradual. ECONOMIC FUNDAMENTALS. In the first quarter of 2012 economic activity stagnated in the euro area. Recent lower readings in the sentiment indicators of the EU commission suggest that the economy faces ongoing difficulties to stabilise. The implemented austerity measures in various member states to cut budget deficits are weighing on the economy. In the second half of the year, a moderate recovery is expected to take place. But the rebound will not be strong enough to cut the high unemployment rate of close to 11% which will thus limit growth of private consumption. Therefore the euro area is heavily dependant on stronger foreign demand. To strengthen the outlook for growth, new measures will be discussed in coming weeks. But a new deficit spending programme is not on the horizon. Overall, the euro area on average is making progress in cutting budget deficits but the GIIPS countries face huge difficulties in meeting deficit targets. 0 MONETARY POLICY. The ECB is currently in a wait and see mode. ECB policy rates are back at all time low levels. The June ECB staff macroeconomic projections will not deviate much from the current forecast. Therefore, the main ECB scenario will be that the euro zone economy is set for a modest rebound in coming months with inflation rates only falling slightly below 2% in 2013. With no risk of deflation, there is no need to cut policy interest rates again. The ECB has drowned the money market with liquidity with its two 3y LTROs. This money has still to flow into the private sector. The ECB will analyse the effects of the LTROs before deciding on additional measures. The ECB will stay on the sideline for now. -1 FLOWS. In the 12 months ending February 2012, the euro area reported net combined foreign direct and portfolio investments of EUR 89bn compared with net inflows of EUR 69bn in the preceding 12-month period. In the same period, the current account posted a small surplus of EUR 2.1bn. The IMF forecasts a current account surplus of 0.7% of GDP and 1.0% of GDP for 2012 resp. 2013. Therefore the euro area faces no external imbalance and is in a better position than some other major industrialised countries. The ongoing debt crisis is a downward risk to foreign portfolio investments. +1
EUR Weighted score: -0,3

10 0 75 50 25 0
1.30 0 1.25 0 1.20 0 1.15 0
04 05 06 07
-2 5
% of GDP
12 5
10
% of GDP
Currency Strategy
SEBEER Fair value, EUR Index
The euro
VALUATION The euro is trading close to its long-term fair value estimate according to our model SEBEER, EUR/USD is still trading somewhat above the equilibrium level of 1.20-1.25. The deviation from the long-term trend is now quite notable in the nominal exchange rate index and hence the euro is trading at cheap levels vs. the NEER trend (+4 grade). In inflation adjusted terms however the currency still is above long-term average. Worth pointing out is that obviously the internal competitiveness is very different within the euro zone, hence the current problems. German exports could most likely tolerate a EUR/USD at 1.40 whilst the GIIPS-countries would need another trade-weighted depreciation of at least 20-30% in order to restore competitiveness. +1 POSITIONING The net short speculative EUR position just became the shortest ever seen. This clearly reflects the risk averse environment and that the EUR is at the centre of the problems driving the fall in risk appetite. However, as the position is very excessive a correction is most probable as soon as the market situation stabilizes somewhat. The grade thus reflects that sentiment probably has taken the positioning too far and that normalization should provide some support for the EUR going forward. +5 TECHNICALS The ECB EUR index is currently in a shortterm tailspin, somewhat stretched but well paced below a negatively sloped 52 week moving average and is threatening to push further below the recently violated Jan12 low. A wider perspective allows for, or even promotes, an extension towards a minimum target at 96.80, not ruling out additional losses beyond that point towards the 2000/2009 61.8% Fibo retracement point at 94.70. A long-term stretch target also exists at 89.60 where the 2009-2010 & the ongoing decline would match in size. Resistance is likely strong on any turn higher to retest the 101-area. -5 LIQUIDITY, EVENT RISKS, GLOBAL CYCLE There is currently an unprecedented risk for a break-up of the euro project and hence we attached a large negative grade for the euro. Liquidity does work in a positive way for the euro but since the global crisis is about the future of the euro-project, liquidity can hardly be described as very positive now. The global cycle is judged to be neutral to the currency; the euro is one of the currencies that is less prone to follow the global business cycle to any significant degree.
140 130 120 110 100 90 80 70 60

2000 2002 2004 2006 2008 2010 2012
140 130 120 110 100 90 80 70 60
EUR speculative positions

1.500 1.475 1.450 1.425 1.400 1.375 1.350 1.325 1.300 1.275 1.250 Feb
10 0 75 50 25 1.20 0 1.15 0 0 Contracts (thousands)

1.30 0 1.25 0
12 5
100 50 0
-50
04 05 06 07
-2 5
-100
Speculative positions The lack of significant upside progress -150 in EUR/USD EUR/USD makes the current substantial net -200 long speculative position a burden. Should the sub-1.29-areaNov revisited, speculative be May Aug Feb May longs will 11 to be reduced. 12 have
Technical view: ECB EUR index
11
EUR NEER (reversed)
Peripheral risk
Currency Strategy
Japanese yen
We expect the Japanese yen to have finally topped out in nominal trade-weighted terms although we currently see little that speaks in favor of a rapid depreciation yet. The move lower towards our long-term fair value estimate (20% weakening) will be initiated once global interest rates start to move higher (currently they are obviously heading in the other direction) and the market starts to focus on the poor outlook for public finances. The current and unprecedented large risks in the global economy support a relatively (too) strong JPY near-term. ECONOMIC FUNDAMENTALS SEB expects full year GDP growth for 2012 to land at 2.2% followed by 1.7% in 2013 (current consensus projections at 2.0% 2012 and 2013). The Tankan survey in April confirmed the previous reading at -4 from December; however other barometers are signaling that recovery continues and retail sales has improved significantly lately. Growth will also be driven by on-going rebuilding efforts (we expect Capex to increase 8% 2012) following the earthquake. The general government deficit is expected at 10%/GDP in 2012 and 8.5% 2013 lifting the Debt/GDP ratio to a whopping 240% next year. Although Japan has low tax rates, interest rate spending on the existing debt stands for 50% of government revenues. Should Japanese interest rates finally move higher this position will be eroded very quickly. The fiscal outlook is clearly the long-term headache for Japan and should work as a major headwind for the JPY eventually. -1 MONETARY POLICY Bank of Japan continues to expand the very loose zero-interest rate policy and there is absolutely no prospect for a change still. The Asset purchase program (targeting Japanese government bonds) has been increased additionally by JPY 10trn and now amounts to JPY 65trn. BOJ will also intervene heavily in the FX markets should that be needed, we still expect USD/JPY at 75 to be the line in the sand for the central bank. -2 FLOWS The tragic earthquake and tsunami have clearly affected the external sector of Japan: the trade balance has deteriorated following rebuilding and increased energy imports as all but a few nuclear plants have been closed. Destroyed production capacity and the on-going general Asian slowdown have weakened Japanese exports. The strong yen contributes to this development and Japanese exporters have shifted production outside the country. Weak trade weighs on the current account balance which fell to a record low in January. Although, weaker domestic savings (ageing population) will potentially produce on overall deficit eventually (very negative for JPY given the fiscal outlook), the significant net investment position at 60%/GDP will likely continue to produce an overall surplus (from investment income) for the time being. Flows have thus deteriorated but could be expected to be positive in times of stress. 0
12
JPY Weighted score: -0,8


1.30 0 1.25 0 1.20 0 1.15 0
12 5 10 0 75 50 25 0
04 05 06 07
-2 5
% of GDP
% of GDP
Currency Strategy
SEBEER Fair value, JPY Index
Japanese yen
VALUATION The yen is overvalued according to two of our three different measures for valuation. The long-term fair value model (SEBEER) stipulates that USD/JPY should trade at 110. The deviation from long-term averages also reveals an interesting feature of the JPY. In nominal terms the JPY is very stretched above long-term fair value as indicated by our FX Scorecard. However in real terms the JPY is close to the long-term average. Hence, the JPY is only expensive in nominal terms, but when adjusted for inflation differentials the overvaluation case is less appealing. -4 POSITIONING The net short speculative JPY position has recently been excessively short but has the last month or so continuously been normalized. As the position is not excessive any more the grade is relatively low. However, the sentiment towards JPY is positive when judging by the positional changes taking place lately. 0 TECHNICALS The BOE JPY index is on a short-term winning strike, able to repeatedly move into a stretch and this shows short-term demand on the fore. Advance is also seen paced above a positively sloped 52week Moving Average and this renders a positive grading for the yen. But a broader wave count may be passed a peak which is indicating that a larger correctional A-B-C is in the making (currently in its B-leg in line with the prior trend) and this hinder a better score than what currently is the case. Below 173 would call for a sub-169 test in a short-term perspective. +2 LIQUIDITY, EVENT RISK AND GLOBAL CYCLE Being a safe-haven currency, liquidity is an important and positive category for the Japanese currency, the poor fiscal outlook will limit this characteristic over time. In the current turbulent and uncertain time the need for liquidity will also work as a barrier to a more rapid depreciation in the yen which the fundamentals and valuation support. Bank of Japan stands ready to intervene in the currency. Other potentially negative surprises are found with the credit rating agencies should they choose to lower the ratings further (S&P and Fitch currently have a negative outlook). A very adverse scenario in the euro-zone could potentially lead to large and fast inflows again into the JPY, hence in the short-term event risks for the currency is skewed in a small positive direction. The tendency of the JPY to strengthen as global growth slows further supports this bias.
140 130 120 110 100 90 80 70 60

2000 2002 2004 2006 2008 2010 2012
140 130 120 110 100 90 80 70 60
10 0 75 50 25 0
1.30 0 1.25 0 1.20 0 1.15 0
04 05 06 07
-2 5
Technical view: BOE JPY index
13
Effective exchange rate (BoE Index)
Weighted interest rate spread, %
12 5
Currency Strategy
British pound sterling

Euro weakness has supported the GBP over the last year, while the sterling has stayed fairly range bound against the USD. This has pushed the GBP into more neutral territory considering its valuation. Weak fundamentals related to slow growth and efforts to cut deficits, the risk of further QE from the BOE and a negative flow situation are likely to weigh on the GBP at present valuation. The Olympic Games in London this summer may generate a temporary boost to the economy and support the currency, but we doubt this effect is sustainable. ECONOMIC FUNDAMENTALS After reporting a second consecutive quarter with falling GDP the UK economy is back in its second recession since 2008. Although the GDP estimate may be subject to upward revisions the growth number clearly reflects the weakness of the British economy as households struggle with a huge debt burden amid falling house prices, high unemployment and falling real wages. Since 2011 the government has pushed through various measures including higher taxes to reduce the public deficits, which currently takes the toll of domestic demand. Simultaneously demand is weak on key export markets in Europe with several economies in recession. So far there is very little indicating an imminent recovery in UK, although there are some positive signs as PMI:s just above 50. Nevertheless, growth is likely to remain weak for several quarters to come. -1 MONETARY POLICY Falling rapidly from above 5% in the third quarter 2011, inflation has recently appeared stickier than what we and the BOE expected just a few months ago. In its May IR the BOE revised its inflation forecast and CPI-inflation is now expected to stay above the target for more than a year, which means inflation has been above the target for 4 years. Amid deleveraging in the private sector broad money growth has remained negative for more than a year despite additional bond purchases by the BOE with the target for the program currently being held at 325bn. With falling money supply and an economy back in recession one should normally expect the central bank to support the economy by further monetary policy expansion. That may eventually be the case for the BOE as well but most likely we need to see inflation falling below the BOE forecast to trigger further QE from the BOE. -1 FLOWS Persistent trade and current account deficits combined with portfolio outflows continue to paint a very bleak flow situation for the GBP. Despite years of poor domestic growth and a weak currency the UK economy has not managed to rebalance away from the external deficits as demand in key export markets remains just as weak as domestic demand. Furthermore, poor productivity growth has effectively reduced the UK competitiveness in global markets which makes it even more difficult to obtain the structural shift. Considering external imbalances the UK economy should stay with a weak currency to support the necessary rebalancing of the economy. -1
14
GBP Weighted score: -0,4

1.30 0 1.25 0 1.20 0 1.15 0
10 0 75 50 25 0
04 05 06 07
-2 5
% of GDP
12 5
% of GDP
Currency Strategy
SEBEER Fair value, GBP Index
British pound sterling

VALUATION After a significant depreciation in 2007/08 pushing the GBP towards clearly undervalued levels a combination of falling long-term fair value and a rebound in the nominal GBP-index have moved the GBP towards its estimated long-term fair value. Hence, currently the GBP is reasonably valued according to SEBEER. This also fit fairly well with other measures of valuation as the deviation from a long-term average in nominal or real trade weighted indices indicating the GBP is reasonably valued against its trading partners. +1 POSITIONING The net long speculative GBP position is close to being the longest seen in a year. The excessive position has already begun to be normalized. The grade is negative as the normal pattern is for such a normalization to continue and thus put pressure on the GBP. -5 TECHNICALS The BOE GBP index has admittedly been allowed to accelerate further and fast than what was previously expected (within a long-term bearish structure). The move above earlier tops at 82.30 & 83.10 has cancelled a bearish triangle case and has opened for additional gains should the 2009 high of 84.70 fail to attract massive selling. The move higher is already short& medium-term stretched (which urge for caution on late longs), but it is also well paced way above a bullish sloping 52 week moving average. This holds projection points at 87.80 or even as high as 89.60 on the radar at least as long as not breaking back below those recently violated prior tops at 83.10/82.30. +2 EVENT RISK, LIQUIDITY AND GLOBAL CYCLE Traditionally the sterling appears to be almost uncorrelated with changes in global risk sentiment and so has been the case over the last months as well. In addition with its large financial markets the GBP belongs among the most liquid currencies in the world and as such tends to be almost unaffected when financial markets are attracted by liquidity. Hence, scores related to event risk, the business cycle and liquidity are overall neutral for the GBP.
140 130 120 110 100 90 80 70 60

2000 2002 2004 2006 2008 2010 2012
140 130 120 110 100 90 80 70 60
GBP speculative positions

1.675 1.650 1.625 1.600 1.575 1.550 1.525 Feb
10 0 75 50 25 1.20 0 1.15 0 0 Contracts (thousands)

1.30 0 1.25 0
12 5
50 30 10
-10 -30
04 05 06 07
-2 5
Speculative positions -50 The lack of significant upside progress in GBP/USD EUR/USD makes the current substantial net -70 long speculative position a burden. Should May Aug Novrevisited, speculative Feb May the sub-1.29-area be 12 longs will 11 to be reduced. have
Technical view: BOE GBP index
Percent
15
Index
Currency Strategy
CAD Weighted score: -0,3
Canadian dollar
By all our measures the Canadian dollar appears overvalued and valuation probably posts the biggest long-term threat against the currency. However, being one of only a few G10-economies with acceptable fundamentals as firm growth outlook, a fairly small public deficit and demand from households the high valuation may pose a limited threat to the currency near term as portfolio inflows are likely to continue. Should the BOC remain with its hawkish stance and eventually start to hike rates, this would further support the currency. However, a precondition is probably a stabilisation in the Euro area, which also would support risk appetite. Hence, in a more benign global scenario the USD/CAD should move lower. ECONOMIC FUNDAMENTALS In Q4 household demand surprised as the most positive contributor to Canadian growth. With its close links to the US economy the recovery in US contributes positively although slow productivity growth and a fairly strong currency are negative for the nations competitiveness. The domestic demand has been supported by falling unemployment in recent months, with unemployment currently at the lowest levels since the financial crisis in 2008. As a consequence the number of people employed is well above pre-crisis levels. Residential mortgage credit growth show very few signs of slowing, currently growing by more than 7% annually. Business surveys show a slightly mixed picture but indicates that business sentiment remains above the historical average while investment intentions indicates continued capital spending. +1 MONETARY POLICY BOC has remained on hold since Sep. 2010 keeping the policy rate at 1% to support economic growth and prevent the currency from getting too strong. In its latest MPR the BOC projected headline inflation to slow towards the 2% target during 2012. On the other hand the bank is worried about strong credit expansion and at its April meeting the bank surprised by a hawkish tone in its statement indicating the bank rate might actually be raised already this year. Since the meeting market pricing indicates a positive probability for higher rates and we would not exclude hikes already this year unless the Euro-zone crisis hurts global growth.
10 0 75 50 25 0
1.30 0 1.25 0 1.20 0 1.15 0
04 05 06 07
-2 5
+1
FLOWS Weak competitiveness continues to generate trade deficits although the current account has improved for three consecutive quarters to less than 2.5% of GDP in Q4 2011. Nevertheless the need to attract foreign portfolio inflows remains and so far portfolio inflows related to equities and bonds have more than fully compensated for the current account deficits. Canadas fairly strong fundamentals will probably continue to attract foreign portfolio inflows to cover the current account deficits. +1
16
12 5
Currency Strategy
Canadian dollar
VALUATION In trade weighted terms the Canadian dollar
appears substantially overvalued from a long-term perspective. Our internal long-term fair value model indicates the CAD currently is 15-20% overvalued against its trade weighted index and the BIS real effective exchange rate points in the same direction relative its historical average. The valuation score is currently the most negative for the Canadian dollar and long-term the valuation will weigh on the CAD. -2
SEBEER Fair value, CAD Index

140 130 120 110 100 90 80 70 60
2000 2002 2004 2006 2008 2010 2012
140 130 120 110 100 90 80 70 60
10 0 75 50 25 0
full 8% loss in a medium-term perspective because if the suggested wave structure panes out as thought a correctional B (or 2) wave high is in place, arguing for an equal loss to what was incurred back in 2011 to unfold again, ideally targeting the mid-102s something highlighted by last weeks notably bearish close below the 52week Moving Average. An alternative and less bearish objective do exist around the 2010/2011 106.40/105.80 lows. -4
1.25 0 1.20 0 1.15 0
04 05 06 07
-2 5
EVENT RISK, LIQUIDITY AND GLOBAL CYCLE

Historically the Canadian dollar has tended to correlate positively with risk appetite and the performance in the US equity market, strengthening as risk appetite improves. However, this classical correlation has appeared less clear in the first quarter this year, although in recent weeks is seems to have increased again and the Canadian dollar should therefore continue to under perform as long as risk appetite deteriorates. For our medium term forecast horizon we expect risk appetite to improve in the second half of 2012 which will be positive for the CAD. Being one of the smaller currencies among the G10 currencies the loonie is still liquid enough to not be severely punished as investors scale back on exposures in times of increased stress in financial markets. At the moment there are no currency specific risks related to the Canadian dollar. Technical view: BOE CAD index
17
S&P500 (reversed)
USD/CAD
TECHNICALS The BOE CAD index holds a possibility of a
1.30 0
POSITIONING The net long speculative CAD position has recently started to fall from an excessively long level. Three weeks ago it was the longest seen in the last 52 weeks but it has since then come down to being the 3rd longest. The grade reflects that this normalization of the excess position ought to continue. -5
12 5
Currency Strategy
AUD Weighted score: 0,3
Australian dollar
Australia has for several years benefited from strong demand on commodities and high commodity prices, which has been the main driver of Australian growth and has warranted an overvalued currency. Should however commodity prices be less supported and demand from Asia slow, growth in Australia will be more closely related to domestic demand and manufacturing exports, which changes this situation. Recent cuts by the central bank have also reduced the large interest rate gap against other currencies, which further reduce the support for the currency.
ECONOMIC FUNDAMENTALS Supported by strong

demand for commodities the boom in the Australian resources sector has served as the engine for growth. Capital spending continues to grow rapidly and investment intentions remain at record high levels indicating growth is likely to continue. In Q4 last year investments grew by around 20% from the previous year. Strong demand for commodities has boosted national income. The economy however remains divided with sectors outside the recourses sector facing more challenging conditions with a strong currency and cautious households that prefer to save rather than spend. Household sentiment is below its historical average as house prices show signs of declining and labour market conditions are uncertain. The situation may however become more demanding if global growth should slow further. Nonetheless the total fundamentals score is among the highest supported by a strong fiscal situation and very low expectations on the growth outlook. +2
10 0 75 50 25 0
1.30 0 1.25 0 1.20 0 1.15 0
04 05 06 07
-2 5
MONETARY POLICY Following two cuts late last year the RBA decided to cut the cash rate by 50 bps to 3.75% in May. The decision to cut rates was related to weaker demand conditions domestically and from abroad and a sharp drop in inflation to 1.6% in Q1 and underlying inflation close to the 2% target. With benign inflation there seems to be room for further cuts and the market currently prices another 0.75% cut in the cash rate. Due to recent cuts the Australian rate advantage has been reduced and is less supportive for the currency but monetary policy should still be positive due to the rate advantage. +1 FLOWS Record high terms-of-trade and strong commodity demand have generated trade surpluses and attracted FDI inflows while strong fundamentals attracts bond-inflows. In contrast return on foreign investments continues to generate considerable negative outflows being the main reason for the current account deficits. So far the trade surplus and net portfolio inflows have been large enough to generate a AUD supportive flow situation but may be less so if trades weakens. +1
% of GDP
12 5
18
% of GDP
Currency Strategy
SEBEER Fair value, GBP Index
Australian dollar
VALUATION Being one of few currencies actually
offering a positive carry the aussie has attracted large capital inflows in the ongoing process of rebalancing out of fundamentally weak currencies. In addition high commodity prices have attracted foreign investment inflows. Altogether this pushed the AUD to a stretched valuation. However, lately increased uncertainties related to the Euro-zone debt crisis and to growth in China have forced the RBA to cut rates, weighing on the value of the currency in past weeks. Although the AUD is far from undervalued today, valuation seems to be less of an obstacle for the future outlook. -1
140 130 120 110 100 90 80 70 60

2000 2002 2004 2006 2008 2010 2012
140 130 120 110 100 90 80 70 60
POSITIONING Following the sharp fall in risk appetite lately the AUD net speculative position is at lowest (net long) since March 2009. The net long AUD speculative position has been build up from the latest low occurring after the fall in risk appetite in early fall 2011. But as the position correlates highly with risk appetite it has tumbled in previous weeks. AUD/USD has tracked the net position quite clearly and the current positioning (which has seen a more rapid fall than in 2011) reflects an AUD/USD trading at 0.95. However, the current position is extreme and a reflection of the severe uncertainty we have right now. In case of a normalisation the net long AUD position is likely to increase again. Such normalisation of the extreme positioning would give support to the AUD and thus the grade is very positive for AUD. +5 TECHNICALS The BOE AUD index has picked up short and medium term downside momentum and a fair target in a shorter perspective comes with the Q304 low near the 100-handle (but not ruling out additional losses), following violation below an ascending 2008/2011 trendline. The 52week Moving Average has recently adopted a negative slope which also highlights the Aussies medium-term predicaments. A less expected move back above 108.50 would reduce downside risks. -4 EVENT RISK, LIQUIDITY AND GLOBAL CYCLE With its massive exposure towards the commodity sector and growth in emerging markets and China in particular, the AUD has traditionally been the best example of a procyclical currency that tracks risk appetite closely. Correlation between the AUD trade weighted index and the S&P500 over the last 44 days is around 0.7, further underlining this relationship. Hence, with the present uncertainty related to the Euro-zone debt crisis and global growth the AUD will remain under pressure. Indeed the AUD is among the most traded currencies in the world but liquidity is still too small to attract inflows in times when liquidity is the major driver for the FX market. Currently there is no major event risk related to the AUD specifically.
10 0 75 50 25 0

1.30 0 1.25 0 1.20 0 1.15 0
12 5
04 05 06 07
-2 5
Technical view: BOE AUD INDEX
19
S&P500 Index
AUD Index
Currency Strategy
New Zealand dollar

The European debt situation, a Chinese slowdown, weaker Australian data, falling commodity prices and a strong currency are all headwinds for the NZ economy whereas housing/reconstruction after the earth quake has been supportive. With headwinds expected to increase further and the market pricing a cut from the central bank later this year we expect to see the NZD index extend the recent decline (-6% since the March peak).
NZD Weighted score: -0,3

1.30 0 1.25 0 1.20 0 1.15 0
ECONOMIC FUNDAMENTALS Until recently the

domestic economy has held up rather well with growth impetus coming from an improving housing market and the reconstruction after the Canterbury earthquake. On the other hand a subdued global outlook and falling dairy prices in particular are concerns. Moreover, the April manufacturing PMI showed a significant drop from 53.8 in March to 48 in April with sub indices for production and new orders falling, indicating weaker growth prospects. Financing the rebuilding rendered a 9.5% budget deficit last year, but this is projected to decrease to a 6% deficit in 2012. Nonetheless the public debt remains the lowest among G10 economies at around 45% of GDP giving room for manoeuvres. +2
10 0 75 50 25 0
04 05 06 07
-2 5
MONETARY POLICY RBNZ has been at hold with rates at 2.50% since the 50 bps insurance cut following the Canterbury earthquake in 2011. Given the sovereign debt crisis and the negative data a normalisation looks increasingly unlikely and the market is currently pricing 12 cuts during 2012. RBNZ has also signalled that if the NZD remains strong there may be an increasing need to reassess the outlook for monetary policy. Inflation is also well contained within the banks comfort zone, 1-3%. 0 FLOWS The C/A balance is expected to have deteriorated during 2011 with the latest estimates pointing towards a 4% deficit. RBNZ projections for the 2012 suggest some further marginal weakening of the C/A balance. However, terms of trade projections for 2012 still point towards further improvements, although a lot less than the estimated 2011 outcome of a 12.3% improvement. The reason can mainly be found in lower commodity prices. Together with an expensive currency and expectations for a RBNZ rate cut this will all dampen the demand for the buying the NZD. Nonetheless, being one of few economies with relative strong fundamentals New Zealand has continued to attract inflows to its bond market over the last year although those inflows fell in Q4 2011. If the global sentiment improves this is probably likely to continue. -1
% of GDP
12 5
20
% of GDP
Currency Strategy
SEBEER Fair value, NZD Index
New Zealand dollar

VALUATION The diversification trend in the FX market in
recent years has favoured the NZD being one of the fundamentally strong currencies that has gained on the back of diversification flows out from indebted currencies. In addition the kiwi has offered rates which have generated at least some positive return on bonds. This has pushed the valuation of the currency to away from our long-term fair value estimate. Valuation also remains stretched based on the currencies real effective exchange rate and although the NZD has weakened lately valuation is not an obstacle for further weakening as long as a negative risk sentiment promotes a reduction of overall exposure. -1
140 130 120 110 100 90 80 70 60

2000 2002 2004 2006 2008 2010 2012
140 130 120 110 100 90 80 70 60
10 0 75 50 25 0
1.30 0 1.25 0 1.20 0 1.15 0
04 05 06 07
-2 5
TECHNICALS The BOE NZD index is set in a short-term tailspin. It is however a bit uncertain where in a larger wave structure this fits best. The Q411/Q112 move higher is the problem since it looks best subdivided into five smaller waves (while it ideally should only have been three). But given short-term price action being so negatively tilted against the kiwi, a thought line of support now at 102.35 is clearly exposed below which both the 100-handle as well as the 2011 low of 97.85 would end up in harms way. -5 LIQUIDITY, EVENT RISK AND GLOBAL CYCLE Being th the 10 most traded currency (BIS 2010 triennial survey) with approximately 1.6% market share of the global currency turnover liquidity is an issue that has to be weighed in positioning in the NZD, especially during risk aversion periods when liquidity clearly is on the risk of decreasing as investors turn focus to their main holdings. Positive event risk emanates from a sharp upside turnaround in commodity prices (and in particular dairy ones) and negative ones from a sharp drop in global risk appetite, a hard landing in China and/or Australia (AU housing market). The risk environment for the NZD is not the best at the moment. With an already expensive currency a further deteriorating risk sentiment can be expected to have a negative outcomes on the currency and especially so during times when commodity prices also are declining.
Technical view: BOE NZD index
NZD NEER
POSITIONING The net long speculative NZD position is extremely low at the moment. This is clearly a reflection of the low risk appetite in the market. However, when the current uncertainty starts to resolve a normalization of the NZD position is most likely which would provide support for NZD/USD. +5
12 5
21
VIX
Currency Strategy
Swiss franc
The Swiss franc faces the risk of appreciation due to the ongoing debt crisis. Since the currency is still highly valued and downside risks to the economy prevail the SNB will continue to defend the minimum exchange rate of the CHF against the euro at 1.20. Latest upward revised growth projections suggest that there is no need to raise this floor. ECONOMIC FUNDAMENTALS The KOF economic barometer, the most important leading indicator has shown a remarkable turn a round in past four months. The reading of 0.40 in April points to an expanding economic activity in coming months. According to IMF projections, the economy will grow by 0.8% and 1.7% in 2012 resp. 2013. Inflation is forecasted with -0.5% and +0.5% in the forecast period. The outlook suggests that Switzerland is performing very well in this difficult environment. The country faces no threat of a prolonged period of deflation. Furthermore, public budgets are expected to show a surplus in both years. +1 MONETARY POLICY The decision to appoint former SNB Vice president Thomas Jordan as the new SNB chairman indicates a continuity in the SNB monetary strategy. The SNB will therefore keep the 3m Libor band at 0.00% to 0.25% and the minimum exchange rate of the CHF against the EUR at 1.20 at its June meeting. Looking ahead, the SNB expects inflation rates to return into positive territory again in 2013. In addition, latest GDP growth forecasts suggest that the economy is able to deal with a highly valued currency. Therefore, no additional expansionary monetary measures have to be introduced at the moment. The EUR/CHF floor will however be defended vigorously. -2 FLOWS In 2011 Switzerland posted a current account surplus of CHF 83.7bn or 14.8% of GDP. Cumulated foreign direct and portfolio investments posted outflows of CHF 105.2bn in the same period. For 2012 and 2013 the IMF forecasts a current account surplus of 12.1% resp. 9.8% of GDP. The projections clearly go against the notion of the Swiss franc being overvalued. At the beginning of April the Swiss franc slipped below 1.20 against the euro in a few isolated transactions. The SNB stated that these trades were concluded by banks that cannot or do not wish to trade with the SNB. The central bank stressed that it will continue to enforce the minimum exchange rate, without any restrictions. The trading limits amount to some hundreds of billions of euros a day. In March 2012, the SNB increased its currency investments by CHF4.26bn to a total of CHF245.5bn. +1
CHF Weighted score: -0,6

1.30 0 1.25 0 1.20 0 1.15 0
10 0 75 50 25 0
04 05 06 07
-2 5
22
12 5
Currency Strategy
Swiss franc
VALUATION The Swiss franc is the most overvalued G10 currency according to our three different valuation methods. SEBEER has a fair value estimate of USD/CHF and EUR/CHF at 1.30 and 1.56 respectively. The deviations from long-term averages are also very substantial both in nominal and in real terms. The caveat to this consensus view of franc overvaluation is that Switzerland continues to generate massive current account surpluses, year after year. -5 POSITIONING The net short speculative CHF position just became the shortest seen in 52 weeks. The position has fallen significantly the last three weeks along with risk appetite. This is contrary to how it ordinary reacts to uncertainty but being managed vs. the EUR it is mostly a reflection of the sentiment towards the EUR. As the position is excessively short a normalization of the position is probably due as soon as the market calms. The grade thus reflects the support CHF would get from such a normalization of the positioning. +5 TECHNICALS EUR/CHF is disqualified from a technical perspective since the cross is managed by the SNB. USD/CHF mimics EUR/USD and as long as this is the case and this should at first sight renders an equally negative score to the swissy as it is for the euro. But a larger wave structure actually tells a different story, where a long term wave-3 (out-of-5) is in place and possibly also a correction wave-4 is added. But since this is far from confirmed and fact that the most recent feature is a sharp decline off the 2011 top a slight negative score seems justified. -1 LIQUIDITY, EVENT RISKS AND GLOBAL CYCLE The Swiss franc is a prime destination for capital in times of financial stress. Although liquidity is not as supportive for the CHF as it is for the JPY, the fundamentals of Switzerland is much superior, hence CHF should continue to be a safe-haven long-term, a prospect we hold as less likely for the JPY (due to the fiscal outlook). We expect SNB to defend the floor vigorously, although Switzerland is likely to see additional large FX inflows as the eurocrisis continues, the event risk is negative as there is a small possibility SNB will raise the EUR/CHF-floor.
SEBEER Fair value, CHF Index

140 130 120 110 100 90 80 70 60
2000 2002 2004 2006 2008 2010 2012
140 130 120 110 100 90 80 70 60
10 0 75 50 25 0
1.25 0 1.20 0 1.15 0
04 05 06 07
-2 5
Technical view: BOE CHF index
SNB foreign currency investments

1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 08
23
SNB FX Reserves, CHF EUR/CHF
350 300 250 200 150 100 50 0
09
10
11
12
1.30 0
12 5
Currency Strategy
Swedish krona
Since global equity markets topped out late March/ early April the krona has been the weakest G10 currency together with the Australian dollar. The trading pattern is hence in-line with the historical tendency of depreciation as leading indicators and risk appetite moves lower. Furthermore, Swedish production data has been weaker than expected and the Riksbank should probably continue to lower rates. The near-term outlook is hence still very uncertain. SEK has however weakened beyond reasonable levels lately and we are still of the opinion that EUR/SEK will trade towards 8.50 longer-term.
SEK Weighted score: 0,6

1.30 0 1.25 0 1.20 0 1.15 0
ECONOMIC FUNDAMENTALS In Nordic Outlook published the week before last we kept Swedish growth projections relatively unchanged (0.7% 2012, 1.9% 2013). Economic data has painted a very mixed picture lately: industrial production has been much weaker vs. general expectations which contribute to lower the Q1 th GDP-estimate due 30 of May (SEB estimate 0.0% q/q). Labour market data and leading indicators however do not signal the same (weak) picture. The relative strength of Swedish fundamentals with low state indebtedness and a balanced fiscal budget have clearly been beneficial for the currency and will be over a long-time period. Still should developments in euro-land (Greece) continue to go in the wrong direction, the relatively strong fundamentals will hardly help. +2 MONETARY POLICY Current euro-zone developments and weak Swedish data promote further easing from the Swedish central bank: we expect a 25bps rate cut in September but the risk currently is for a move already in July should the euro-zone problems continue. Inflation continues to move below the 2% target and unemployment will gradually rise, hence from a resource utilisation point of view there is very little speaking against further easing. Although markets are already discounting 50bps rate cuts until year-end, the implications for SEK should Riksbank deliver further easing is likely to be negative. 0 FLOWS The external balance remains SEK positive. Data
for the Q1 Current account is released on May 30 . For 2011, the Current account stayed at a very healthy 7.1% (SEK 252bn) surplus. The trade balance generated an inflow of SEK 215bn which hardly can justify the notion of SEK being overvalued. A significant portion of the trade surplus however is reinvested abroad. This could also be seen in net FDI which continues to be negative (outflow of SEK 103bn). So far this year the trade surplus is seeing the same development as in 2011. Net investment income finally stood at +83.6bn. Flows are long-term supportive of SEK strength. +3
th
10 0 75 50 25 0
04 05 06 07
-2 5
% of GDP
12 5
E one
24
% of GDP
Currency Strategy
Swedish krona
VALUATION SEK is trading at cheap levels in two out of
our three valuation categories. SEBEER continues to set fair value significantly below current spot levels (EUR/SEK and USD/SEK at 8.51 and 7.05 respectively). The level in the real effective exchange rate is also cheap vs the average historical level, however the nominal exchange rate has normalised previous undervalued levels and is now at the historical trend level. Valuation is a positive category for SEK / attractive for foreign portfolio flows.
SEBEER Fair value, SEK Index

140 130 120 110 100 90 80 70 60
2000 2002 2004 2006 2008 2010 2012
140 130 120 110 100 90 80 70 60
+2 POSITIONING The SEK position based on our

aggregated client flow is not excessive (but slightly long) in any direction at the moment but looking at the positional speculative proxy it is closing in on becoming excessive on the downside. The changes in both positional proxies are lately to the lower side indicating a slightly negative sentiment for the SEK. -1
10 0 75 50 25 0
1.30 0 1.25 0 1.20 0 1.15 0
TECHNICALS Even though the suggested wave count is

too complex to offer a clean cut long-term bullish foundation, the Swedish TCW index has been set off on a (so far likely not completed) short-term parabolic journey higher and is currently eyeing potential resistance at the 2011 highs. Above would raise the bar to a 2011/2012 Equality point near 130. The recently violated 52week Average, now at 123 previously worked as SEK support but should act as SEK resistance. -3
04 05 06 07
-2 5
LIQUIDITY, EVENT RISK AND GLOBAL CYCLE.

Liquidity has been a handicap for SEK in the last couple of weeks as small and illiquid currencies have been dumped by global investors. The krona is the worst G10 performer since equity markets started to fall by the end of March. Given the global uncertainties stemming from the eurocrisis, this handicap is expected to remain valid in the coming weeks. The global cycle of slowing growth is a headwind for SEK, over time we expect the global outlook to improve promoting pro-cyclical currencies such as the krona. On Event Risks, the main domestic concern for SEK is financial risks (banking or housing related) rather than the traditional export-related risks. We hold a small probability to such negative events happening.
Technical view: TCW index
Net balance
12 5
25
EUR/SEK
Currency Strategy
NOK Weighted score: 0,1
Norwegian krone
The NOK continue to find support from Norways outstanding fiscal position and relatively strong economic growth. However, with Norges Bank unlikely to make a Uturn until the situation in Europe stabilises and rising FX purchases will cause the flow outlook to deteriorate markedly in H2, we have likely seen the highs in the trade-weighted NOK for this year and continued rangetrading in EUR/NOK is expected for much of this year. ECONOMIC FUNDAMENTALS The Norwegian economy has so far been almost unaffected by the global slowdown thanks to solid domestic demand. Reaccelerating private consumption and surging oilrelated investments are more than made up for chilly headwinds from abroad. In the recent Nordic Outlook we consequently raised our forecast for mainland GDP growth (excluding oil/gas and shipping) to 2.7% in 2012 and 3.1% in 2013. Undoubtedly solid fundamentals are paying off. The revised 2012 budget revealed that Norway continues to show a unique fiscal position; the general government surplus is expected to equal 13.6% of GDP. Both the strong fiscal position and strong domestic-led growth prospect suggest economic fundamentals will continue to benefit the NOK. +3 MONETARY POLICY Despite strong domestic driven growth, tight labour markets and elevated house prices, Norges Bank has remained on the dovish side arguing that inflation is too low due to the stronger NOK. Norges Bank is certainly giving the impression that it is focusing solely on keeping a lid on the krone. Considering that Norway is further along in the economic cycle that its peers, Norges Bank will have to start hiking rates well ahead of others. However for the bank to rethink its current strategy both growth and financial risks from abroad need to become more balanced, Although we believe its too early for the market to discount rate hikes this autumn further dovish statements from Norges Bank will likely only fuel markets expectations that the bank will start hiking sooner than later. 0 FLOWS Norway continues to be a natural beneficiary of global reserve managers diversification flows. In the nearterm, however, this will hardly outweigh the pressure from rising FX purchases by Norges Bank on behalf of the Government Pension Fund Global. The revised government budget confirmed our forecast for FX purchases reaching an average net NOK selling of NOK ~700m/day in H2; an amount significant enough to impact the trade-weighted NOK. In addition, with risk sentiment remaining highly vulnerable due to debt woes from the euro zone, foreigners are unlikely to markedly increase their holdings on OBX from the current ownership rate at 36%. Although flows support the NOK in the long term the outlook will deteriorate markedly in the coming 3-6 months. +1
10 0 75 50 25 0
1.30 0 1.25 0 1.20 0 1.15 0
04 05 06 07
-2 5
% of GDP
12 5
26
% of GDP
Currency Strategy
SEBEER Fair value, NOK Index
Norwegian krone
VALUATION Taking the oil and gas related export
revenues into full consideration would indicate a significantly stronger currency than today. However, as a significant part of these incomes are invested in asset abroad the inflows are partly neutralized reducing the pressure on the NOK. Considering our long-term fair value model the Norwegian currency currently appears to be close to its long-term fair value, while other valuation measures as a real trade weighted index indicate a slight overvaluation. -1
140 130 120 110 100 90 80 70 60

2000 2002 2004 2006 2008 2010 2012
140 130 120 110 100 90 80 70 60
POSITIONING The speculative proxy for NOK positioning is not excessive in any direction but the slope of the level is slightly downwards thus indicating a slightly negative sentiment for the NOK. -1 TECHNICALS The Norwegian NOI44 index was recently
allowed a short-term impulse higher and has thereafter paused in a correctional pattern. Since the move up from the 2012 low easily can be subdivided into a 5-wave sequence it is either "A" in a larger correction or "1" in a far more profound advance (though the latter may seem a bit overambitious at this stage). Either or, it means that another 5-wave sequence higher ought to unfold, ideally targeting 89.50 (not far from 2011 ~90 highs). So as long as not NOK bullishly falling back under 86.80 there is an intermediate medium-term NOK negative tilt to take cue from. -3
10 0 75 50 25 0
1.30 0 1.25 0 1.20 0 1.15 0
04 05 06 07
-2 5
LIQUIDITY, EVENT RISK AND GLOBAL CYCLE

Liquidity has been low recently as global investors have been seeking more liquid currencies and the fairly stable range in EUR/NOK has kept investors sidelined. Since the beginning of April, the NOK has outperformed all G10 currencies except for the other fundamentally strong currencies despite Norway having outstanding fundamentals. The krone has suffered from the marked drop in oil prices causing foreigners to sell Norwegian energy shares. Although oil prices should find new support as were heading into driving season (SEB forecasts an average Brent oil price at $115/b in Q3) the risk of further equity related NOK selling from foreigners remains. The greatest event risk to the NOK, however, is not related to economic outlook per se but rather any possible currency interventions from Norges Bank. Recent communication from the bank suggests that radical interventions such as implementing a floor in EUR/NOK are far off but cannot be disregarded should a more severe event in the euro zone cause massive currency inflows. However, we expect Norges Bank to continue use rate cuts as a first line of defence against exaggerated currency appreciation.
Technical view: NOK Index (I44)
USD/Barrel
12 5
27
Index
Currency Strategy
Danish krone
Recent Euro zone uncertainty has led to appreciation pressure on DKK vs. EUR. This is in line with our view that Denmark compares favourably to the Euro zone on fundamentals. The currency has entered territory that was defended last year by the Danish central bank (DNB), but with the Euro zone worries lingering EUR/DKK is likely to hit the 7.425-43 area before the base case policy response leads to a reversal. If credible Euro zone measures are not launched it could turn into a test of DNBs resolution to maintain EUR/DKK in chartered territory. Policy is limited by the already large currency reserves and the limit on how negative the spread can be given the low yield level. A disorderly Euro zone development would mean significant appreciation pressure and potentially a test of the official floor at 7.29. Grading below is vs. EUR due to peg. ECONOMIC FUNDAMENTALS Fiscal stimulus will be the main growth driver this year. We expect 0.5% growth with the public deficit increasing to 3% of GDP. This should not be a concern for financial markets given the large current account surplus and low public debt level. The fundamental problem in the Danish economy is the aftermath of the private debt accumulation during the housing bubble. The bust has left consumers stretched and revealed pockets of weakness among banks. However, Denmark is net creditor vs. the world and the net wealth of Danish households is respectable in an international comparison. Hence, the imbalances are primarily an internal distribution problem. +1 MONETARY POLICY Officially EUR/DDK is allowed to fluctuate by +/- 2.25% around its central parity rate (7.46038). However, in reality DNB maintains a much tighter range and the low in 2002/3 was around 7.425. We expect the DNB to intervene with FX purchases and a unilateral interest rate cut lowering the repo rate spread to -40bp. -2 FLOWS The current account surplus leads to general inflows. These flows have moderated somewhat as export growth has slowed, but deleveraging and a muted fiscal expansion keeps internal demand struggling and the large current account surplus intact. Danish government bond yields are tracking Germany and Danish equities have seen significant foreign buying in the first quarter. The positive portfolio flow pressure is likely to remain until the Euro situation calms down. +1 TECHNICALS EUR/DKK is about to break a Bearish flag and extend towards the lower end of a long-term range. As a currency DKK must then be graded better than the euro (which scores -5) but as long as the cross is limited by the euro-era lows near 7.42 an overall reading of -4 is justified. +1
Fundamentals Monetary pol Flows
+1 -2 +1 +1
Technicals
10 0 75 50 25 0
1.30 0 1.25 0 1.20 0 1.15 0
04 05 06 07
-2 5
Technical view: EUR/DKK
28
12 5
Currency Strategy
DENMARK
Percent y/y
% of GDP
Unemployment
6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 02 03 04 05 06 07 08 09 10 11 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5
Percent of total labour force
29
Percent y/y
Percent y/y
Currency Strategy
Russian rouble
The rouble outlook is largely determined by three partially related factors; the oil price, capital outflows and global risk appetite. In the near term, these factors are set to spell additional trouble for the rouble. Provided the euro areas acute challenges can be overcome by summer we expect a recovery of the rouble by autumn. This should happen even if Russian GDP growth eases from the stellar reading in Q1 and inflation picks up from its current, historical, lows. Political risks should ease as President Putin installs his new government but risks are tilted towards negative rather than positive surprises. ECONOMIC FUNDAMENTALS GDP growth beat expectations in Q1 rising by 4.9% supported by high oil prices, high real wages but also fiscal support in the runup to the Presidential election. We expect deceleration ahead. The slump in oil prices is at least temporary and constrains public sector activity. Real wages will ease as CPI picks up and credit growth will slow down both by renewed financial angst and higher real interest rates. We expect growth of 3.8% this and 4.1% next year. WTO membership, probably in Q3, is long term positive but inefficient and oil dependent structures remain negatives. Political risks are tilted downwards as the new government is formed. +1 MONETARY POLICY CPI fell from 9.4% last June to 3.6% in April with support from falling food prices, base effects and a postponement of the yearly tariff-hikes from January to July. These forces will reverse in the second half of the year although WTO-membership will gradually reduce import tariffs. Our forecast for average CPI is 5% this year and 6% next. We expect the CBR to keep the reference rate at 8.0% and the more important O/N minimum auction rate at 5.25%. The corridor relevant for interbank rates is set by the O/N fixed rate repo now at 6.5% and the O/N depo rate now at 3.75%. Short interbank rates have almost doubled in the last year to close to 7%. In real terms this implies a rise from -5% to +3%. The fluctuation band for the RUB vs. basket (55% USD, 45% EUR) is 32.15-38.15. +2 FLOWS The C/A is likely to remain in surplus but a smaller one (even if oil prices recover) as imports outpace exports. With elections behind us, capital outflows should also fall (unless the euro zone crisis deepens). Although FX reserves may fall near term, as they did late 2011, we anticipate RUB supportive flows later this year. 0 TECHNICALS The RUB basket has just soared back above its 52week Moving Average and looks staged to break resistance at a Q4'11 reaction low at 35.23. - Above would realign sights to a far more important 36.56\61 ref (over which the high end of the "allowed" 32.15\38.15 interval would become exposed. Initial RUB resistance at last week's 34.65 "mid-body point" and the 52week Moving Average nearby and more of the same likely at prior RUB support around the 34-handle. -2
30
Fundamentals
+1 +2 0 -2
Monetary pol Flows
Technicals
RUB vs. basket, USD and EUR

47.5 45.0 42.5 40.0 37.5 35.0 32.5 30.0 27.5 25.0 22.5 47.5 45.0 42.5 12 5 E U R /U S D 1.35 0 10 0 40.0 1.30 0 75 37.5 50 35.0 1.25 0 25 32.5 1.20 0 0 30.0 1.15 0 S peculative positions -2 5 27.5 04 05 06 07 25.0 The lack of significant upside progress in 22.5 03EUR/USD makes07 current substantial net 04 05 06 the 08 09 10 11
RUB vs. basket USD/RUB R speculative positio ns EU EUR/RUB U S D /C A D
long speculative position a burden. Should the sub-1.29-area be revisited, speculative longs will have to be reduced.
FX reserves and oil price

130 110 90 70 50 30 10 00 02 04 06 08 10 12
Oil price, Brent Gross FX reserves
600 500 400 300 200 100 0
Technical view: RUBLE BASKET
Currency Strategy
RUSSIA
31
Currency Strategy
Polish zloty
The strong performance of the Polish economy, which has mainly been driven by domestic demand, is eventually starting to soften due to Eurozone dependence. Polands reliance on Euro-countries, both for export sales and funding puts the country at risk. Near term, the zloty is likely to continue be targeted for proxyselling because of it being the most liquid eastern European currency. Once the troubles for the Euro ease, other drivers will most likely foster a recovery in the zloty. ECONOMIC FUNDAMENTALS are still reasonably strong thanks to mainly being driven by domestic demand. Mostly because of this, the country runs twin deficits on public budget and current accounts. These deficiencies are eye catching especially during periods of market stress when fundamental strengths such as moderate levels of indebtedness, a strong banking system and stable politics - as recently shown by the parliament approval of unpopular but necessary pension reform- are out of investors focus. Although growth is slowing down, the resilience of the Polish economy clearly makes it stand out on the bright side in a CEE comparison. We see GDP growth of 3.3% this year and 3.6% next. +1 MONETARY POLICY Polish inflation logged 4.0% y/y in April and is since about a year and a half running well above NBP's 2.5 +/- 1% inflation target. This has led the NBP to recently end its hiking pause it started in mid 2011. Above this, the NBP is talking hawkish in an apparent strategy to further underline its inflation target and support the zloty. Further hikes cannot be excluded while rate cuts in the near term are out of the question its governors say. We expect the slowdown and supportive base effects to eventually lead to lower inflation which will make the NBP backtrack on its recent hike. In one years time we see the rate back at 4.50%. +2 FLOWS The annualised basic balance has oscillated around zero after falling from large surpluses. The current account deficit is thus financed by FDI and portfolio flows. During the beginning of this year there has been a rather fast softening of FDI flows, raising risks for the zloty. Preparing for a worsening of the Euro zone crisis, the government has already funded two-thirds of its full year needs for 2012. So far, auctions still tend to be well received by the markets. Poland has an IMF FCL of 30bn which would be drawn upon only in a very dire situation.
Fundamentals
+1 +2 0 -2
Monetary pol. Flows
Technicals
GDP and economic sentiment

120
Economic sentiment, index
115 110 105 100 95 90 85 80 75 98
Economic Sentiment, SA, ECFIN GDP growth speculative positio ns EUR

1.35 0 1.30 0 1.25 0 1.20 0 1.15 0 10 0 75 50 25 0 Contracts (thousands)
8
12 5
6 4 2 0 -2
04 05 06 07
-2 5
The lack of significant upside progress in -4 EUR/USD makes the current substantial net 00 02 04 06 08 10 12 long speculative position a burden. Should the sub-1.29-area be revisited, speculative longs will have to be reduced.
Basic balance and exchange rate

25 20 15 10 5 0 -5 -10 -15 -20 -25 -30 Real Effective Exchange Rate Basic balance 125 120 115
Index (BIS)
Basic balance, USD bn, AR
110 105 100 95 90 85 80 00 01 02 03 04 05 06 07 08 09 10 11
Technical view EUR/PLN:
0
TECHNICALS EUR/PLN has been allowed to significantly accelerate the up-move. Currently there is some respect shown to a medium-term 61.8% Fibo retracement level near 4.40, but two consecutive clearly bullish weekly candles show that there is still demand likely to be balanced through higher spot. The next level working as attraction/resistance comes with a medium-term Fibo retracement/projection combo near 4.49 and it ought to be tested. Strong support likely at prior highs and the now positively sloped 52week Moving Average in the 4.25/4.20-area. -2
32
GDP growth, percent y/y
U S D /C A D E U R /U S D
Currency Strategy
POLAND
33
Currency Strategy
Hungarian forint
The Hungarian economy is the worst performer among the CEE and has barely begun its post-Lehman recovery despite having sought IMF support. As the market now hopes for a second IMF program, yields and EUR/HUF have decreased from the elevated levels they reached during the winter. An abolishment of the second pension pillar has destroyed the domestic buyer base for Hungarian debt, which adds to the countrys financial vulnerability. The central bank that earlier was hiking rates rapidly to defend the forint to protect a financial system burdened by foreign-denominated debt, has been able to pause hikes thanks to improving market conditions. Markets have been further emboldened by EU that has backed down from its politically rooted resistance against starting negotiations for IMF support. Eventually, we think, market stress will push the Hungarian government to implement more stable and medium-term growth friendly policies in line with IMF demands. ECONOMIC FUNDAMENTALS The domestic economy is weak, burdened by payments on foreign loans. The large export sector is at danger from the turmoil in the Eurozone. A continuation of market disrupting ad-hoc Government policies has a doubly negative impact on the medium term outlook. As most reforms have a strong focus on revenue generation, these often come with an unnecessary adverse impact on growth. Above that, the rapid changes of the playing field itself introduce a costly risk-premium. -3 MONETARY POLICY The National Bank of Hungarian (NBH) has recently been able to take a rest from its attempt to support the forint. Rate changes however have little effects on growth in a small open and highly export oriented economy. The NBH is mostly seen as guardian of the forint, expected to try to prevent the EURHUF to rise too fast while above 300, a level at which risks towards financial stability caused by FX-borrowing rises. +3 FLOWS Though weighed down by interest rate payments and profit repatriations, the C/A surplus is positive mostly due to weak domestic demand. With Government funding heavily dependent on some few external buyers, rolling over maturing debt may be problematic in the absence of an IMF backstop. However, the Govt has so far managed to stay ahead of its funding schedule for this year. While negotiations between Hungary and IMF will likely be difficult and prolonged, we expect them to end in a much needed Stand-By Arrangement. +1= TECHNICALS EUR/HUF has moved back close to commence a +300 break - which would mean that the whole 2012 decline has been nothing more than a larger correctional "A-B-C" sequence. Above 300 would target a print above the yearly 324.20 high (and render a -3 score). -2=
34
Fundamentals
-3 +3 +1 -2
Monetary pol Flows
Technicals
Broad basic balance & NEER

120 115 110 105 100 95 90 01
1.30 0 1.25 0 1.20 0 12 5 10 0 75 50 25 0 -2 5 07
Broad basic balance 1.15 0 S peculative positions Effective exchange 5 04 0 rate 06
10.0 7.5 5.0 2.5 0.0 -2.5 -5.0 -7.5 -10.0 -12.5
02The lack of significant upside progress in 03 04 05 06 07 08 09 10 11 EUR/USD makes the current substantial net long speculative position a burden. Should EcoWin Source: Reuters the sub-1.29-area be revisited, speculative longs will have to be reduced.
10 year CDS
800 700 600 500 400 300 200 100 0 Jan Mar
Poland Hungary Germany Italy
800 700 600 500 400 300 200 100 0
May
Jul 11
Sep
Nov
Jan
Mar May 12
Source: Reuters EcoWin
Technical view: EUR/HUF
Currency Strategy
HUNGARY
35
Percent y/y
Currency Strategy
Chinese renminbi
Three factors help explain why USD/CNY has been flat since the end of 2011; decelerating growth, deteriorating global risk appetite and the strengthening USD. This has deprived the renminbi from the abundance of capital inflows that used to force the central bank to intervene to prevent excessive appreciation. Near term, these factors will remain at play and we maintain a mildly bullish view on USD/CNY. By Q3, however, we envisage a reversal with growth reaccelerating and despite continued risks from peripheral Europe. Strong fundamentals will again attract capital inflows and international pressure to resume CNY appreciation will rise in the run-up to US elections. The pace of appreciation will, however, be more modest than in 2011. ECONOMIC FUNDAMENTALS Growth in Q1 eased to 8.1% y/y and 7.4% q/q, below expectations. Leading indicators are mixed with bullish readings from OECD and the official PMI while the HSBC PMI measure remains below the 50 threshold. Corporate profits as well as data on industrial production, investments, retail sales and loans were down rather markedly in April. This points to a continued deceleration in Q2, emphasizing downside risks to our growth forecasts of 8.5% this year and 8.7% next year. Economic acceleration as of Q3 still seems likely, however, partially in response to monetary policy relaxation. Broad fundamentals remain strong. +2 MONETARY POLICY CPI has eased from 6.5% last July to 3.4% in April. Core inflation was flat at 1.4%. Looking ahead, headline CPI is set to ease further near term but will rise later this year as base effects fade and the economy recovers. We expect average CPI of 3.5% this year and 3.8% next. Although the PBOC still worries about CPI risks (wages and commodity dependence), our inflation projection is below the CPI target of 4% and China should increasingly shift policy focus from inflation to growth. Administrative restrictions on lending have eased since early this year and RRR have been cut by 150bps from its peak to 20.0% for big banks. We expect additional cuts of 150bps this year and 100bps next and one rate cut by 25bps in Q3. The daily USD/CNY trading band has been widened to +/- 1.0%. In 3-6 months time we expect interventions to partially soak up renewed capital inflows. Monetary policy, thus, scores: -1 FLOWS Foreign exchange reserves recovered in Q1 and the April trade surplus bounced (on weaker imports). FDI flows have eased, however, and other inflows will be held back or even reversed until Chinese growth resumes and global risk appetite improves. Neither seems likely near term but odds improve as of Q3.
Fundamentals
+2 -1 +1 -1
Monetary pol. Flows
Technicals
Policy Rates / Reserve requirement

20.0 17.5 15.0 12.5 10.0 7.5 5.0 2.5 20.0 Lending Rate, 0-1 Years Deposit R speculative positio ns Rate, 1 Year EU 17.5 U S D /C D RR2 - ReserveARequirement Ratio - Small Banks 12 5 E U R /U S D 15.0 1.35 0
10 0 75 50 25 1.20 0 1.15 0 0 Contracts (thousands) 1.30 0 1.25 0
12.5 10.0 7.5 5.0 2.5 0.0
04 05 06 07
-2 5
The lack of significant upside progress in 0.0 96 EUR/USD makes 04 current 08 10 12 98 00 02 the 06 substantial net
long speculative position a burden. Should the sub-1.29-area be revisited, speculative longs will have to be reduced.
USD/CNY
-1 -3 -5 -7 -9 -11 05 06 07 08 09 10 11 12
USD/CNY y/y rate of appr. USD/CNY
8.50 8.25 8.00 7.75 7.50 7.25 7.00 6.75 6.50 6.25
Technical view (USD/CNY 1y NDF):
+1
TECHNICALS USD/CNY 1y NDF has been allowed to bullishly rise above its 52week Moving Average and with a potential "Double bottom" in place at 6.25, the higher end of a 2011/2012 range at 6.47 is on the radar. Below 6.32 would be less bullish (for USD/CNY). -1
36
Currency Strategy
CHINA
37
Currency Strategy
Guide to indicators
COMMITMENT OF TRADERS (COT) REPORT
The CoT report (weekly) seeks to describe market positioning in a currency future on the Chicago Mercantile Exchange. The Exchanges trading members must state whether their trading purposes comprise either commercial hedging or speculation. Speculators are regarded as either large (non-commercials) or small. We present and analyse the positioning of large speculators in order to understand sentiment in the currency. The chart presents the net open position (non-commercial longs less non-commercial shorts). For those currencies not available in the CoT report we have created a proxy (see FX Ringside 2006-04-04).
EXTERNAL DATA SOURCES

The main data providers used in this report are: SEB, national sources, Reuters Graphics and the Reuters Ecowin.
SEASONAL PATTERN
We have calculated the seasonal effects using a regression approach. In the regression we have used the monthly percentage change in the exchange rate as the dependent variable and dummy variables for the different months as explanatory variables. Our dataset consists of end of the month daily close FX rates over the last 10 years.
BASIC BALANCE
The basic balance is a flow indicator that includes the current account balance and net flows from both directand equity investments. The broad basic balance also includes the private sectors net trade in debt securities.
SEB STRETCH-O-METER
This indicator shows how stretched a currency pair is by measuring the distance between the current rate and the 200 day moving average expressed in standard deviations. Values in excess of +/-3 are to be considered over-stretched and often signal an increased reaction/reversal risk.
EFFECTIVE EXCHANGE RATE (ER)

A nominal effective exchange rate is the value of a currency against a basket of currencies. The Bank of England calculates the ER using IMF-provided weights. Each currency is given a weight that reflects its relative importance in the countrys trade flows. An increase (decrease) in the BoE index reflects an appreciation (depreciation) of the currency.
38
Currency Strategy
Stretch-o-meter & Seasonality

The stretch-o-meter tells us how many standard deviations away currently the exchange rate is from the 200-day moving average. Higher absolute values indicate more stretched values.
SEB FX Stretch-o-meter
SEK EUR NZD AUD CAD CHF NOK JPY USD GBP -3 -2 -1 0 1 2 3
High reaction risk
High reaction risk
Seasonal currency patterns

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1.6 2.3 -1.5 1.0 1.3 1.6 USD/AUD -0.5 0.8 0.5 0.3 0.8 -0.3 1.4 1.9 1.1 -0.4 0.5 0.5 -0.4 0.2 0.0 0.3 -0.4 0.2 USD/CAD -1.4 1.0 2.6 USD/CHF 0.7 0.7 0.8 0.9 0.6 -0.3 0.1 0.5 0.4 1.5 -1.4 0.4 -0.6 -0.4 0.5 0.7 0.8 -0.1 0.5 -0.5 -0.4 USD/GBP -2.8 1.2 1.8 -1.2 0.9 1.7 USD/HUF 0.5 0.5 -0.4 0.8 -0.5 -0.1 1.2 1.3 0.9 0.4 -0.2 -0.2 0.0 0.4 0.2 0.6 0.5 0.7 USD/JPY -1.0 1.0 2.7 1.0 1.2 USD/NOK 0.8 0.2 -0.7 -0.7 0.8 -0.1 -0.4 1.0 -2.8 1.8 -2.0 1.5 -1.7 2.5 USD/NZD 0.1 0.3 -0.7 -0.3 -0.1 -2.4 2.1 2.5 -1.6 1.4 USD/PLN 0.3 0.4 -0.3 -0.5 0.1 0.3 0.2 -0.9 1.0 1.9 0.9 1.3 1.4 USD/SEK 0.3 0.4 -0.5 -0.7 -0.3 0.2 1.1 1.2 USD/SGD -0.1 0.1 0.3 0.1 -0.3 0.8 -0.3 -0.1 0.9 -0.1 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -1.4 -1.3 -0.9 EUR/AUD -0.5 0.4 -0.1 0.0 -0.6 0.9 0.0 0.6 0.1 EUR/AUD EUR/CAD -1.6 1.5 EUR/CAD -0.7 -0.2 0.6 -0.2 0.7 0.1 -0.6 -0.3 -0.1 0.7 EUR/CHF 0.2 -0.3 0.1 0.4 -0.5 -0.4 -0.3 -0.4 0.9 -0.5 -0.1 -0.7 EUR/CHF EUR/GBP -1.6 0.9 1.5 0.9 2.2 EUR/GBP -0.5 -0.2 -0.4 -0.6 0.8 -0.4 0.8 1.9 EUR/HUF -0.1 -0.1 -0.6 0.0 0.8 -0.6 0.5 0.2 0.7 0.4 0.0 EUR/HUF EUR/JPY -1.5 1.4 1.1 -1.8 -1.0 1.1 EUR/JPY 0.6 -0.1 0.2 -0.4 0.3 -0.6 -1.6 1.1 EUR/NOK -0.2 -0.4 0.1 0.0 -0.8 0.0 0.1 0.2 0.8 0.5 EUR/NOK EUR/NZD -2.0 4.4 -1.5 2.3 -1.3 1.6 2.1 0.2 0.9 0.3 0.3 -0.6 EUR/NZD 1.3 -2.0 1.1 EUR/PLN 0.1 0.8 -0.8 0.7 0.7 0.7 -0.1 0.2 0.2 EUR/PLN EUR/SEK -0.3 0.2 0.2 -0.8 -0.2 0.8 -0.6 0.1 -0.3 0.4 0.1 0.2 EUR/SEK -1.2 1.1 EUR/SGD 0.2 0.8 -0.1 0.2 0.4 -0.4 -0.6 -0.8 0.4 0.4 EUR/SGD EUR/USD -1.3 1.1 1.1 1.0 1.7 EUR/USD 0.3 0.4 0.1 0.4 -0.9 0.0 0.3 The table show the monthly seasonal effects (in %) that the quoted currency pairs historically have experienced. A positive value indicates that the currency pair tends to rise and vice versa. The calculations are done using data over the last 10 years. Roughly only values of at least +/-1% (bolded) are statistically significant. USD/AUD USD/CAD USD/CHF USD/GBP USD/HUF USD/JPY USD/NOK USD/NZD USD/PLN USD/SEK USD/SGD
39
Currency Strategy
SEB Speculative Position Analysis

We analyse the speculative positioning and how it may affect currency rates in our weekly publication Speculative Positions. The below text is a short summary st of the latest report publish on May 21 . The latest Commitment of Traders report on positions in the International Money Market (IMM) reveals the aggregated speculative share of open interest continued to fall. This reflects that speculators continue to scale back on FX exposure due to the current high uncertainty and low risk appetite in the markets. The net long aggregate USD position increased massively. The net position is at 154,118 contracts, which is the highest seen in 52 weeks, up from 91,033 (63th 2 percentile ) in the previous report. The change was large and broad based as seven out of eight currencies saw falling positions versus the greenback. This development supports the notion that the period 9-15 May continued with the same risk-off market sentiment as the prior reporting period 2-8 may. Largest net short EUR position ever was reported this time. Speculators are thus more net short EUR than they were in January 2012 right before the Greek situation was (temporarily) solved. However, EUR/USD is at a higher level. An interesting detail in the positioning data is that EUR is the only currency in the latest CoT report to show increasing volume, a rise that comes solely from added short contracts. In this aspect the short positioning will probably continue to increase as will the downside move in EUR/USD spot. Looking at the percentiles of the current net positions it is quite obvious that position is extreme at the moment. AUD, CHF, EUR, JPY and NZD are all in the lowest quartile (and AUD, EUR and CHF have even the lowest net positions in at least one year). CAD, GBP and USD are positioned in the other extreme all very close to the highest positioning seen in at least one year. This is of course a reflection of the sharp fall in risk appetite the two last weeks. However, the CAD and GBP
Published each Friday evening by the US Commodity Futures Trading Commission (CFTC) covering the period from the previous Wednesday to latest Tuesday. 2 We apply percentiles to measure the significance of the latest net positions, speculative share of open interest and changes in these compared with history. One advantage with percentiles compared to other measures of dispersion is that it does not make any assumptions about the shape of the distribution (such as normality). The extreme points of the data set are represented by the 0th and 100th percentiles which are the min and max of the data.
1
positions reached excessive levels before that and have already begun to normalize which has also been reflected in price action. That normalization should continue further. Concerning the other excessive positions they have all been created by the risk-off environment and should not be expected to start normalizing before markets stabilize somewhat. Of course there might be short relief rallies along the way which should work to normalize the positions temporarily but we believe that a more major turnaround in risk appetite is needed for a larger normalization to occur.
Commitment of Traders summary table

Speculators' net positions Ccy vs USD Current Previous Change AUD 4,734 25,104 -81% CAD 51,005 60,095 -15% CHF -26,694 -16,494 -62% EUR -173,869 -143,984 -21% GBP 25,021 25,339 -1% JPY -34,315 -41,093 16% NZD 2,597 6,224 -58% Net USD 151,521 84,809 79% Percentile ranks Current Change 0 6 96 23 0 0 0 8 98 49 16 70 6 15 100 96
Percentile ranks Speculators' share of market Ccy vs USD Current Previous Change* Current Change AUD 34% 39% -5% 39 6 CAD 29% 27% 2% 55 87 CHF 31% 29% 2% 67 72 EUR 35% 34% 2% 82 81 GBP 23% 24% -1% 20 40 JPY 25% 26% -1% 22 32 NZD 45% 48% -2% 59 26
0-25th percentile 26-50th percentile 51-75th percentile 76-100th percentile
* Change in percentage points Source: CFTC. Percentile ranks calculated using data one year back.
40
Currency Strategy
Contacts
STOCKHOLM Carl Hammer (editor) +46 8 506 231 28 carl.hammer@seb.se FRANKFURT Thomas Kbel +49 69 97 27 12 45 thomas.koebel@seb.de OSLO Erica Blomgren +47 22 82 72 77 Erica.blomgren@seb.no COPENHAGEN Jakob Lage Hansen +45 33 28 14 69 jakob.lage.hansen@seb.dk
Richard Falkenhll +46 8 506 231 33 richard.falkenhall@seb.se Mats Lind +46 8 506 233 51 mats.lind@seb.se Dag Mller +46 8 506 231 29 dag.muller@seb.se Mats Olausson +46 8 506 232 62 mats.olausson@seb.se Karl Steiner +46 8 506 231 04 mailto:karl.steiner@seb.se Anders Sderberg +46 8 506 230 21 anders.soderberg@seb.se
41
Currency Strategy
Notes
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42
Currency Strategy
Notes
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43
With an eye for trading opportunities

Did you know that you can do all your trading business via the Internet? By using Trading Station, you are always in contact with the global trading market. You get access to the latest exchange rates, and you can buy and sell at the blink of an eye spots, swaps or forwards. To find out how you can develop your electronic trading, visit us at www.seb.se/mb. Or call one of our traders to activate our e-service: Gothenburg +46 31 774 90 60 Malm +46 40 667 69 10 Stockholm +46 8 506 231 40

SEB Report: New FX Scorecard Sees Swedish Currency Strengthening

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SEB Report: New FX Scorecard Sees Swedish Currency Strengthening

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Introducing our new SEB FX Scorecard

WEDNESDAY 23 MAY 2012

EDITOR Carl Hammer + 46 8 506 231 28

SEB FX Score card

Forecasts and FX Scorecard

* Bloomberg survey FX forecasts.

SEB FX Scorecard, G10

FX Scorecard - Contributions to total score

NOK Weighted score: 0,1

USD Weighted score: 0

EUR Weighted score: -0,3

JPY Weighted score: -0,8

GBP Weighted score: -0,4

CAD Weighted score: -0,3

CHF Weighted score: -0,6

AUD Weighted score: 0,3

NZD Weighted score: -0,3

A New Currency Strategy introducing the SEB FX Scorecard

Global GDP growth

* Purchasing power parities

EUR NEER (reversed)

SEBEER Fair value, USD Index

140 130 120 110 100 90 80 70 60

USD Weighted score: 0

SEBEER Fair value, USD Index

140 130 120 110 100 90 80 70 60

140 130 120 110 100 90 80 70 60

POSITIONING The aggregated net long speculative USD

USD speculative positions

1.35 0 1.30 0 1.25 0 1.20 0 1.15 0

TECHNICALS The USD index looks bid within a broader

Technical view: USD INDEX

LIQUIDITY, EVENT RISK AND GLOBAL CYCLE With its

SpeculativeRpositions E U speculative U S D /C A D USD index

EUR Weighted score: -0,3

1.30 0 1.25 0 1.20 0 1.15 0

E U R speculative positio ns U S D /C A D E U R /U S D 1.35 0

SEBEER Fair value, EUR Index

140 130 120 110 100 90 80 70 60

140 130 120 110 100 90 80 70 60

EUR speculative positions

E U R speculative positio ns U S D /C A D E U R /U S D 1.35 0

Technical view: ECB EUR index

EUR NEER (reversed)

JPY Weighted score: -0,8

E U R speculative positio ns U S D /C A D E U R /U S D 1.35 0

SEBEER Fair value, JPY Index

140 130 120 110 100 90 80 70 60

140 130 120 110 100 90 80 70 60

1.30 0 1.25 0 1.20 0 1.15 0

Technical view: BOE JPY index

Effective exchange rate (BoE Index)

Weighted interest rate spread, %

E U R speculative positio ns U S D /C A D E U R /U S D 1.35 0

British pound sterling

GBP Weighted score: -0,4

SEBEER Fair value, GBP Index

British pound sterling

140 130 120 110 100 90 80 70 60

140 130 120 110 100 90 80 70 60

GBP speculative positions

E U R speculative positio ns U S D /C A D E U R /U S D 1.35 0

Technical view: BOE GBP index