Daily FX Str Europe 01 July 2011

8/6/2019 Daily FX Str Europe 01 July 2011

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Market: EURUSD now above 1.4500, on S/T chart inmiddle of rough 1.4475-1.4550 “higher” range carvedafter Greek vote passed on Wednesday. Mixed USD/G10story in Asia, with most FX higher vs. USD except for CHF (-0.28%), NZD (-0.24%), JPY (-0.10%) and AUD(flat). SEK does best (0.53%) followed by NOK (+0.30%)while EUR, GBP and CAD up close to +0.20%. Only SEKand NOK are outperforming the EUR so there is innateEUR strength – with EURCHF and EURNZD up near 0.40-0.50%. Asian FX mostly higher (barring THBwhich tad in red). Strongest performers are IDR, PHP(+0.40%) then MYR, SGD and INR (0.25-0.35%). KRW

just flat despite sharp KOSPI rally. Asian equities showmixed performance with Australia, Malaysia and Indianear 0.30% in the red, while others like S.Korea andIndonesia show 1.20% plus gains. Chinese bourses upexcept for SHCOMP. FX RECAP FROM NYC CLOSE:CHF the biggest loser Thursday as safe haven tradesunwound, in turn helping EURUSD to new highs of

1.4537 in the NY session. CAD and NZD had outpacedEUR with equities strong across the board (much better than expected Chicago PMI helped) though NOKstruggled a bit despite oil/commodes holding up.Eurozone peripheral spread continued to come in led byGreece (-69bp) and Portugal (-48ps) at 5yrs. USequities indices finished 1-1.25% firmer (DJIA +1.25%fares best). US yields continue to back up on this thelast day of QE2. 10s +4bp to 3.16. Bunds also stilltaking back safe haven bid, 10s +4bp.

The Day Ahead (Via MNI news)

Europe: The first trading day of the month sees the

release of European manufacturing PMI data. At0713GMT, Spanish data is released, followed by ItalianPMI at 0743GMT, French data at 0748GMT andGerman data at 0753GMT. Then Eurozone June finalmanufacturing PMI data is released at 0758GMT. At1530GMT, ECB Governing Council member Nowotnyis scheduled to speak, in Vienna. At 0900GMT, the EMUMay unemployment data is released, followed at1000GMT, with the release of French June car registrations.

UK: A quiet UK calendar sees just the release of the UKmanufacturing PMI data at 0828GMT.

US: Just before US open, June Domestic VehicleSales data is expected to be released- tipped to reboundto a 9.6 million annual rate in June after falling in May. At1355GMT, the final June Michigan Consumer Sentiment Index is released, and expected to beunrevised at a reading of 71.8 in June, still below the74.3 reading in May. At 1400GMT May ConstructionSpending data are released- tipped to hold steady. Alsoat 1400GMT, the ISM manufacturing index is released,and is expected to fall to a reading of 52.0 in June after falling to 53.5 in May. Regional data already releasedsuggest contraction.

NEWS

US

The sexual assault case against former IMF MDStrauss-Kahn is on the verge of collapse, the NYTimes reports. The paper's website says investigatorshave uncovered major holes in the credibility of thehousekeeper who charged that he attacked her in hisManhattan hotel suite in May, according to two well-placed law enforcement officials, the paper says. Senior prosecutors met with lawyers for Strauss-Kahn onThursday and provided details about their findings, andthe parties are discussing whether to dismiss the felonycharges, the paper says.

Federal debt talks remained at a stalemate Thursdayas both sides continued their week-long battle of blamingeach other for the stymied negotiations to allow theTreasury to continue borrowing money to financegovernment operations, the Washington Post says. Evenas senior officials suggested that a deal needed to bereached by July 22, allowing 11 or 12 additional days for

legislative action, both sides engaged inshowmanship, the paper says.

Obama administration believes congressionalleaders must agree to a deficit-reduction deal by July22 in order to raise the government's borrowing limit intime to avoid a default in early August, the WSJ says,citing unnamed sources. The government needs a weekor two to write and pass the necessary legislation andtake the steps necessary to avoid missing a payment."We're down to the wire," one official said.

DATA RECAP: US weekly Jobless Claims +428k from429k last week and 420k expected. June Chicago PMI

61.1 from 56.6 and 54.0 expected.

Canada April GDP 0.0% vs. -0.1% expected, YoY 2.8%unchanged from March.

Federal Reserve Bank President James Bullard: "QE2has shown that the Fed can conduct an effectivemonetary stabilization policy even when policy rates arenear zero,". In a speech at a conference looking at thesecond round of purchases, Bullard said: "The financialmarket effects of QE2 looked the same as if the FOMChad reduced the policy rate substantially." "In particular,real interest rates declined, inflation expectations rose,the dollar depreciated, and equity prices rose," Bullard

said.

Europe

Greek vote: A five-year austerity program deemednecessary to avert default won final and expectedapproval from Greece's parliament. Lawmakers voted155 to 136 in favor of legislation implementing a programof around 28 billion euros ($40.6 billion) in tax hikes,spending cuts and other measures and clearing the wayfor accelerated asset sales worth 50 billion euros. Theresult was expected after lawmakers passed an outline of the measures in a vote Wednesday against a backdropof fierce protests and street clashes between police and

demonstrators.

German banks agreed to join French institutions inrolling over a portion of Greek government debt.

Foreign Exchange Strategy Friday, 01 July 2011

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Germany's major banks on Thursday agreed tocontribute € 3.2 billion euros to a Greek rescue, GermanFinance Minister Wolfgang Schaeuble said at a newsconference in Berlin, where he was joined by Josef Ackermann, chairman of Deutsche Bank AG , Germany'slargest bank. Under the plan, which was based on aFrench proposal unveiled earlier this week to roll over aproportion of Greek debt maturing between now and2014, German banks would accept longer maturities for bonds set to mature in 2014, covering around € 3.2billion in private and publicly held bonds.

Euro-zone finance ministers on Sunday are expectedto clear the way for the release of the delayed € 12billion installment of aid, and begin working on anadditional aid package. Schaeuble, the German financeminister, said the agreement with banks would serve asa framework in the discussions set to take place Sunday

UK

Department store Debenhams has reported roaringtrade in its beauty halls as women cheer themselves upwith a new lipstick or bottle of perfume, the Guardiansays. Debenhams' deputy chief executive,

Michael Sharp, put the growth in trade down to the"lipstick effect" - when shoppers respond to recessionarytimes by reducing spending on expensive designer itemsbut splurging on cheaper luxuries instead, the paper added.

China

China will be more cautious in

adjusting the bank deposit reserve requirement but mayraise rates soon,

the official China Securities Journal said in two separateopinion

pieces today. Even though inflationary pressure stillremains large,

economic growth has moderated, narrowing the room for further reserve hikes, the newspaper said in a front-page

commentary.

Monthly personal income tax threshold will be raised to3,500 yuan ($540) from 2,000 yuan, providing a bonus towage earners with a larger than expected tax cut. TheNational People's Congress (NPC) said it would lift thethreshold from the previously proposed 3,000 yuan, after public opinion, solicited by the NPC, overwhelminglyfavored further tax cuts. The adjustment will take effecton Sept 1, according to the NPC. (ChinaDaily)

China has passed a law that outlaws forced demolitionsof buildings and restricts other coercive measures by thegovernment, better protecting the rights of citizens, China

Daily reported, citing Xin Chunying, deputy director of theLegislative Affairs Commission of the National People’sCongress Standing Committee. (Bloomberg)

China's official manufacturing PMI declined to 50.9 inJune from 52.0 in May vs. the market consensus of 51.5(Bloomberg poll) or 51.3 (Reuters poll).

China's Ministry of Finance scrapping certain rules that

foreign companies say favored domestic products for government procurement, a significant step towardeasing concerns that global companies would beexcluded from billions of dollars in contracts. (WSJ)

Chinese Party marks nine decades with a no-holds-barred campaign to reassert its airbrushed version of modern history. (WSJ)

Police in China hold 36 in Alibaba investigation, thelatest development in a scandal that triggered anoverhaul at China's largest e-commerce company andthe departure of its chief executive. (WSJ)

Japan

TANKAN: The headline index measuring bigmanufacturers' sentiment stood at minus 9 in June, downfrom plus 6 in March and worse than a median marketforecast of minus 6, the central bank's closely watchedtankan quarterly survey showed on Friday. It was the firsttime pessimists outnumbered optimists since March2010, when Japanese firms. (Reuters)

Japan's government and ruling parties agreed on aplan to progressively double the 5 per centconsumption tax by the middle of this decade in order to fund a reformed social security system. By laying out a

plan to fund rising welfare costs, the government hopesto maintain market confidence in a state with gross debtset to soar above 200 per cent of gross domestic productthis year. (FT)

Japan May Core CPI +0.6% Y/Y, 2nd Rise in Row; Apr +0.6%. Japan Apr Core CPI MNI Survey MedianForecast: +0.5% Y/Y. Central Tokyo May Core CPI+0.1% Y/Y, 3rd Rise; May +0.1%. Japan May CPIPushed Up By Heating Oil, Gasoline, Tobacco

Japan May Unemployment Rate 4.5% Vs Apr 4.7%Japan Apr Jobless Rate MNI Survey Median Forecast:4.7%. Japan May Household Spending Real -1.9%

Y/Y, 8th Drop; -3.0%. Japan May Household SpendingMNI Survey Median Forecast -1.8%

Comments from econ minister Yosano: 1% price dropon productivity gain may be good. Japan has seen worsedeflation in past. GDP to show growth next year.

The average national price of land, mostly for residential uses, fell 3.1% on year at the start of 2011,with the pace of decline slowing from -4.4% in 2010, theNational Tax Agency said. In March, the average landprice compiled by the land ministry showed a 3.0% dropon year at the start of 2011, posting the third consecutive

yearly fall, following -4.6% in 2010 and -3.5% in 2009.

Japanese Finance Minister Yoshihiko Noda said onFriday that the government would work with the







Bank of Japan to achieve an improvement in theeconomy, after the central bank's latest tankan surveyshowed a drop in corporate sentiment following theMarch earthquake. (Reuters)

JGB futures slide as Greece worries recede to mark afresh two-week low as players continued to shift positionsto riskier assets from safe-haven debt on positive U.S.economic data and relief that Greece will avert imminentdefault. (Reuters)

Other Asia

Thailand risks slipping into a fiscal crisis as inWestern economies, eroding consumer power if thenew government substantially expands fiscal spendingas many parties are promising, Bank of Thailandgovernor Prasarn Trairatvorakul says in a BangkokPost report. The 2012 annual budget, which will have tobe finalized by the new government, should not allow thedeficit to exceed the Thb350 billion as planned currently,he said. The government should also avoid hugespending by other fiscal means or short-term measuresto inflate people's incomes, he added.

Singapore Exchange (SGX) will begin all-day stocktrading from August 1, dropping its usual 90-minutelunch break, Channle NewsAsia reports. The SGX saidall-day trade will help investors respond better to regionalmarket movements and news flow. The move had beendelayed twice already, the report notes.

The strong Singapore economy and tightening labor market raised workers' wages last year. The Ministryof Manpower said total wages (comprising basic wagesand bonuses) in the private sector grew by 5.5%, after contracting by 0.4% in 2009, Channel NewsAsia reports.The wage gain was comparable to the 5.9% growth inpre-recession period in 2007, though it remained lower than that experienced during the economic expansion in2000 when wages grew 6.6%, the report says.

Bank Indonesia has warned the government of apossible financial crisis induced by swelling foreigndebts, most of which were the government's, TheJakarta Post reports. "The debts have been multiplyingsince 2006, and are now classified as in the alert stage.More attention should be given to the government's

debts, which are bigger than those in the private sector,"BI spokesman Difi A. Johansyah was quoted assaying. He said the country's foreign debts had risen by5.96% from $202.4 billion at the end of 2010, to $214.5billion as of the end of April.

Ahead of Thai election: Key is whether Thailand'sconservative armed forces will accept results if winner isYingluck Shinawatra-- the youngest sister of exiledThaksin Shinawatra, whom the army ousted in a coupfive years ago. Victory in this Sunday's national electionmay be only the first step to power in Thailand, as theleading candidate for prime minister, YingluckShinawatra, is likely to discover if her party wins. (WSJ)

Thailand's army chief Prayuth Chan-ocha has deniedrumors the military will stage a coup if the opposition

Pheu Thai Party wins the election and forms a coalitiongovernment, The Bangkok Post reports.

Korea CPI rose 4.4% YoY in June, slightly above theconsensus of 4.3%. Core CPI advanced 3.7% YoY in

June, the largest gain since May 2009, compared to3.5% YoY in May.

Korea Trade surplus widened to USD 3.3bn in June,higher than a revised USD 2.18 bn surplus in May, andabove market forecasst of USD 2.8 bn. Exports rose14.5% YoY to USD 48.2bn in June with imports jumping27.4 % YoY to USD 44.9bn.

The HSBC/Markit S.Korea manufacturing PMI easedslightly to 51.1 in June from 51.2 May.

Korea's economy ministry raised this year's targetsfor exports, imports and the trade surplus, citing

firmer prices of oil and petrochemical products and apossible rebound in electronics goods prices.

Korea cut a 2011 growth forecast and raised inflationestimate to beyond President Lee Myung Bak’starget after global demand weakened and energy costsclimbed. The economy will expand 4.5 percent, theFinance Ministry said, down from a 5 percent estimate inDecember. Consumer prices are expected to rise 4percent, exceeding the previous 3 percent projection.Today’s numbers are similar to central bank forecasts.(Bloomberg)

Indonesia headline inflation rose higher than

expected to 5.54% YoY in June, above marketconsensus of 5.4%; but eased from 5.98% YoY in May.On month-on-month basis, June inflation gained 0.55%versus 0.12% in May, printing slightly higher than theStats Bureau forecast of 0.10%. Nonetheless, this hasnot stopped the bureau to expect lower inflation for coming July month. Core inflation rose 4.63% YoY inJune; lower than forecast of 4.70% and easing from4.64% in May.

Indonesia May trade surplus widened to USD 3.5 bn(exp: USD 2.26bn) from USD 1.63bn in April. Exportsgrowth accelerated to 45.3% YoY (exp: 32.4% )to USD18.33 bn and imports rose 48.5% YoY (exp: 43.4%) toUSD 14.83 bn

India cabinet may OK FDI in multi-brand retail by Aug,allowing global chains to enter by next March, the Timesof India reported on Friday citing government sources.(Reuters)

Malaysia Stalls New Project: Rare-Earth Metals PlantHas Become Mired in Environmental Considerations,setting back plans to break China's dominance over rare-earth metals as Malaysia's government placedrestrictions on the plant, due to start producingthousands of tons of the materials within months. (WSJ)

Australia/ New Zealand/Canada

Australia's manufacturing sector expanded duringJune for the first time since February. The Australian







IndustryGroupPricewaterhouseCoopers AustralianPerformance of Manufacturing Index rose 5.2 points inJune from May to 52.9. New orders and production grewwhile manufactured exports and employment continuedto contract. (Reuters)

Australia's Westpac Banking Corp. has applied toconduct local-currency banking in mainland China,

joining a growing list of foreign banks seeking to beef upyuan-related services amid increasing use of thecurrency in international transactions. (WSJ)







IMF COFER Q1 Update – EUR conundrumQ1 reserves surge flattered by valuation effects

EUR demand may have stalled, unlike GBP, JPY and‘others’ (mostly AUD and CAD)

Begging the question of whether RM demand is evennecessary to sustain EURUSD gains.

Our first blush take of the IMF's latest update on theComposition of Global Foreign Exchange Reserves(COFER) published Thursday was that it corroboratedthe view that amidst rapidly rising reserves growth,efforts to prevent the dollar proportion of reserves fromrising meant that Reserve Mangers (RMs) were heavybuyers of euros and other non-ISD G10 currenciesduring Q1 2011. However when we properly adjust for exchange rate changes over the quarter the picture looksquite different: RMs - at least those who report the

breakdown of their reserves – look to have been net eurosellers in the quarter, with efforts to prevent the dollar proportion of total reserves from rising reflected mostly ina pick up in demand for GBP, JPY and ‘other’ (non-EURand non-CHF) G10 currencies.

Total global FX reserves as reported to the IMFexpanded by $435bn in Q1, some $164bn more than theQ4 210 increase. However, of the $182bn increaseamong those central banks who report the breakdown inreserves, almost half the increase looks to have comefrom valuation changes stemming from the 6% rise in theeuro. This though assumes that interest receipts on thestock of reserves and local currency valuation changeson that stock were negligible. Interest rate receipts, at

least on bonds held with more than one year duration,add significantly to reserves each quarter, while valuationeffects in Q1 will likely have been negative given theback up in bond yields during the quarter. This makes itimpossible to accurately remove valuation effects from‘volume effects’.

On the (heroic) assumption of no significant interestreceipts/asset valuation effects and just adjusting for FXvaluation change, we see that there were net euro salesof some EUR16bn in Q1 (of which about EUR12bn camefrom Emerging and Developing Economies and the restfrom Advanced countries. In contrast, RMs who reporttheir currency composition were net buyers of about

GBP6bn (most of this coming from Developing andEmerging Economies) and JPY909bn (of whichJPY547bn was from this latter group). In percentageterms, the QoQ changes in reserve holdings among the‘allocated’ portion of total reserves amount to +2.4% for USD, +4.7% for GBP, +5.7% for JPY, -1.6% for EUR anda whopping +12.6% for ‘other’, which we assume isheavily concentrated in AUD and CAD.

It is entirely possible that these composition changes arenot readily extrapolate to the $4.39tn of ‘unallocated’reserves of which China makes up the bulk ($3tn).

If it were, that means there may have been net sales of

euros by central banks in Q1 of some EUR40bn, despitewhich EURUSD rallied by over 6%!



Chart 1: Total reserves

Source: BNP Paribas.

Chart 2: Non USD, EUR reserves in EM

Source: BNP Paribas

As well as challenging our prior notion about whyEURUSD appear to have sustained levels above thatimplied by interest rate differentials (including thenegative impact of euro-peripheral stress) in Q1, oneconclusion is that may not need an ongoing strong

Reserve Manager bid to sustain euro strength.

Another is that demand for ‘other’ (commodity)currencies as reserve assets, and too the yen, remainsvery strong.





Daily Currency SummaryG3

EURUSD

Following Wednesday’s vote for austerity measures, yesterday the implementation bill was voted which now makes therelease of the EUR 12bn IMF aid tranche likely to be cleared by EU FinMins on Sunday. With the tail risk of a liquiditycrisis now averted, the USD has softened. A resurgence of EUR rate expectations (ahead of next Thursday’s ECBmeet) has helped EUR too. Next week’s well flagged rate rise remains in the bag after Mr Trichet repetition of strongvigilance at the EU parliament, and today’s Eurozone PMI (tipped unchanged) could still factor into thinking should weget a downward surprise. Still, we feel RM demand could continue to support EURUSD unless US June ISM later today comes in worse (52 tipped from 53.50 in May) purring USD demand. However yesterday’s super Chicago PMIhas reduced this risk somewhat with market in risk-on mood again. On S/T chart EURUSD is in middle of rough1.4475-1.4550 “higher” range carved after Greek vote passed on Wednesday. Note that latter level of range isimportant tech resistance (drawn of April, May highs) which could make further progress very difficult on a Friday,though dips could provide opportunities to buy into next week.

USDJPY

The strength of demand for new Toshin issuance may determine whether we can head back up to retest the top of therange. Stronger Industrial production data (5.7% m/m vs. 5.5 expected) with METI upgrading their view on productionand slightly weaker Tankan with core CPI moving higher makes JPY weakening QE very unlikely near term. However,

slightly higher US yields as QE2 now wound off could see USD hold up better, suggesting USDJPY remaining rather sticky.

JPYCrosses

EURJPY mimicking EURUSD into and out of the Greek parliamentary vote and unless USDJPY can establish someserious independent momentum. However this seems unlikely near term (as explained in USDJPY section) soEURJPY will likely ride of the coat tails of EURJPY. Hence since we like EURUSD higher into next week, EURJPYcould oblige and get up to 118.00. But likely not on a Friday especially when we have ISM figures.

EUR Bloc

EURGBP

Any upside surprise in today´s UK manufacturing PMI may provide at least a temporary salve for the struggling pound.Consensus is 52.3 after the prior month’s slump to 52.1 but we have a more optimistic 530 forecast. GBPUSD willcontinue to be chopped about but downside currently constrained by the more buoyant EURUSD, bearish Sterlingviews better expressed on the crosses for time being and where GBPAUD in particular has broken key support levels.

EURCHFThe unwind of the CHF safe haven trade was very much in evidence Thursday and with the Ecofin likely to approve thenext 12bn tranche of aid over the weekend, we see scope for EURCHF to extend gains well beyond the two big figuresseen so far. The same goes for various CHF crosses vs. risk/commodity currencies, including an extension of thedownside on CHFSEK.

EURNOK

7.72-7.94 the current range on EURNOK and spot has visited the lower end of that range following risk supportiveGreek vote. The NOK, like the SEK should continue to recover strongly to the extent they had been dogged by liquiditytensions in the weeks leading to the Greek vote. With the somber threat of a liquidity crisis (on bond haircuts) havingbeen averted, NOK should once again gain given its status as the most superior “fiscal” safe haven. NOKSEK hasfallen back and could consolidate lower down to 1.1630 support though we would expect the cross to remain biasedhigher rather than lower on a medium term view.

EURSEK

SEK is the top performing currency in G10 as liquidity tensions abated significantly following the WSJ report that theFed had agreed to extend USD swap lines to other Central banks for another year in addition to Greek vote whichreduced the tail risk of a Lehman 2 event. This has been reflected in some calming visible in cross-cc basis swaps andshould see the USDSEK fall gain traction quickly. USDSEK - down sharply from 6.45 just Wednesday broke its 100-dma (at 6.30 now) but closed above. Should we get a close below that level this Friday, levels down to 6.1500 should

not surprise into next week.USD Bloc

USDCAD

Stronger domestic CPI along with some support for oil prices have helped the CAD, and USDCAD has broken sharplylower down to below 0.9650 and is currently threatening the 0.9600 level. IMF COFER data showing an increasereserves in the “other” category (which mostly includes CAD, AUD, NOK, SEK) this goes to show the CAD is beingconsidered as a reserve currency to hold by Central banks. 0.9615 (circa 61.8 retrace of April-June rally) is keysupport, and a break lower next week could expose 0.9550 rather quickly.

AUDUSD

AUDUSD has reversed sharply higher and 1.06 channel down trend resistance has been broken. China PMI releasedtoday did come in weaker but thankfully managed to hold above to 50 boom-bust mark. Along with the input pricesdropping sharply which plays to lower imported inflation pressure, this goes to the China press reports suggesting a tadless aggressive monetary policy stance. With the USD on the back foot with less change of risk-off related supportahead of today’s ISM (with yesterday’s stellar Chicago PMI) a move up to 1.0850 and beyond may be a matter of 1-2

weeks- though we may not get much this Friday with spot just above 50-dma support.

NZDUSDAUDNZD will likely consolidate as the AUD finds a better footing amid signs of lower imported inflationary pressuresand continued upward pressure on Asian FX. Look for an eventual break above 1.3000 into next week assume anexpected fall in the US ISM does not spoil the risk-on and “carry on” mind set considering AUD-NZD rate spreads.







FX Forecasts*USD Bloc Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14

EUR/USD 1.50 1.55 1.45 1.40 1.35 1.35 1.30 1.30 1.30 1.30 1.34

USD/JPY 78 83 85 90 95 95 95 95 95 95 114

USD/CHF 0.83 0.83 0.90 0.93 1.00 1.00 1.04 1.04 1.04 1.04 1.09

GBP/USD 1.65 1.68 1.59 1.56 1.53 1.53 1.53 1.53 1.53 1.53 1.70

USD/CAD 0.98 0.93 0.95 0.97 1.01 1.01 1.04 1.04 1.04 1.04 1.21

AUD/USD 1.09 1.13 1.07 1.04 0.99 0.99 0.96 0.96 0.96 0.96 0.78

NZD/USD 0.82 0.84 0.81 0.80 0.76 0.76 0.74 0.74 0.74 0.74 0.56

USD/SEK 5.93 5.48 5.93 6.21 6.67 6.67 6.92 6.92 6.92 6.92 6.94

USD/NOK 4.98 4.77 5.07 5.26 5.56 5.56 5.77 5.77 5.77 5.77 5.07

EUR Bloc Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14

EUR/JPY 117 129 123 126 128 128 124 124 124 124 153

EUR/GBP 0.91 0.92 0.91 0.90 0.88 0.88 0.85 0.85 0.85 0.85 0.79

EUR/CHF 1.25 1.28 1.30 1.30 1.35 1.35 1.35 1.35 1.35 1.35 1.46

EUR/SEK 8.90 8.50 8.60 8.70 9.00 9.00 9.00 9.00 9.00 9.00 9.30EUR/NOK 7.47 7.40 7.35 7.37 7.50 7.50 7.50 7.50 7.50 7.50 6.80

EUR/DKK 7.46 7.46 7.46 7.46 7.46 7.46 7.46 7.46 7.46 7.46 7.46

Central Europe Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14

USD/PLN 2.60 2.48 2.69 2.75 2.81 2.78 2.85 2.77 2.85 2.85 2.65

EUR/CZK 24.3 24.5 24.1 23.9 23.8 23.5 23.7 24.0 23.5 23.3 23.1

EUR/HUF 275 275 269 265 265 260 260 255 260 260 250

USD/ZAR 6.80 6.60 6.55 6.60 6.50 6.50 7.20 7.10 7.00 6.90 6.69

USD/TRY 1.52 1.50 1.56 1.59 1.63 1.65 1.65 1.67 1.69 1.69 1.54

EUR/RON 4.20 4.15 4.20 4.25 4.15 4.10 4.20 4.20 4.10 3.95 3.90

USD/RUB 27.51 27.25 27.86 27.97 28.08 27.65 28.19 27.75 29.07 27.75 27.75

EUR/PLN 3.90 3.85 3.90 3.85 3.80 3.75 3.70 3.60 3.70 3.70 3.55

USD/UAH 7.8 7.8 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.3 7.4

EUR/RSD 100 100 98 97 96 95 93 92 91 90 85

Asia Bloc Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14

USD/SGD 1.22 1.21 1.21 1.20 1.19 1.18 1.17 1.16 1.15 1.14 -----

USD/MYR 2.95 2.90 2.87 2.85 2.83 2.80 2.77 2.75 2.73 2.70 -----

USD/IDR 8500 8400 8300 8200 8100 8000 7900 7800 7800 7800 -----

USD/THB 29.80 29.50 29.30 29.00 28.70 28.50 28.30 28.00 28.00 28.00 -----

USD/PHP 42.50 42.00 41.50 41.00 40.50 40.00 39.50 39.00 39.00 39.00 -----

USD/HKD 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 -----

USD/RMB 6.40 6.31 6.25 6.21 6.17 6.13 6.23 6.20 6.17 6.15 -----

USD/TWD 28.00 27.50 27.00 26.70 26.50 26.00 26.00 26.00 26.00 26.00 -----

USD/KRW 1060 1050 1040 1030 1020 1010 1000 1000 1000 1000 -----

USD/INR 45.50 45.00 44.50 44.00 43.50 43.00 43.00 42.50 42.50 42.00 -----

USD/VND 20500 20000 20000 20000 20000 20000 20000 20000 20000 20000 -----

LATAM Bloc Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14

USD/ARS 4.18 4.25 4.34 4.43 4.51 4.60 4.69 4.78 4.86 4.95 -----

USD/BRL 1.58 1.55 1.53 1.55 1.56 1.58 1.59 1.60 1.61 1.62 -----

USD/CLP 450 435 425 430 435 440 442 445 447 450 -----

USD/MXN 11.40 11.10 11.00 10.90 11.00 11.10 11.10 11.17 11.25 11.30 -----

USD/COP 1730 1690 1690 1700 1710 1720 1725 1730 1740 1750 -----

USD/VEF 4.29 4.29 4.29 4.29 4.29 4.29 8.80 8.80 8.80 8.80 -----

USD/PEN 2.70 2.65 2.63 2.63 2.64 2.66 2.67 2.68 2.69 2.70 -----

Others Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14

USD Index 72.30 70.76 74.87 77.62 80.72 80.72 82.99 82.99 82.99 82.99 83.88

*End Quarter







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Ray Attrill Senior Currency Strategist New York 1 212 841 2492 [email protected] Hellawell Quantitative Strategist London 44 20 7595 8485 [email protected] Kowshik Currency Strategist London 44 20 7595 1495 [email protected] Nicola Currency Strategist New York 1 212 841 2492 [email protected]

Emerging Markets FX & IR StrategyDrew Brick Head of FX & IR Strategy Asia Singapore 65 6210 3262 [email protected] Loo Thio FX & IR Asia Strategist Singapore 65 6210 3263 [email protected] Ryan FX & IR Asia Strategist Singapore 65 6210 3314 [email protected] Poh FX & IR Asia Strategist Singapore 65 6210 3418 [email protected] Qi FX & IR Asia Strategist Shanghai 86 21 2896 2876 [email protected] Pawlowski Head of FX & IR Strategy CEEMEA London 44 20 7595 8195 [email protected] Donadio FX & IR Latin America Strategist São Paulo 55 11 3841 3421 diego.donadio@@br.bnpparibas.com

Production and Distribution, please contact :

Roshan Kholil, Foreign Exchange, London. Tel: 44 20 7595 8486, Email: [email protected]

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Daily FX Str Europe 01 July 2011