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17 Apr 2014
EUR remains resilient - Societe Generale
FXStreet (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale, observes the current EUR resilience while markets keep waiting for some ECB action.
Key Quotes
"The ECB is sending more hints regarding its discomfort with euro strength. Not only is the spot resilient to ECB talk, but options are largely ignoring the likelihood of a large move."
"Buying vol has proved costly and risk reversals are unattractive because they remain too directional with spot. Instead, we go long EUR/USD butterflies as a cheap hedge against an ECB move and a vol regime change, as they collapsed to 2007 levels."
Key Quotes
"The ECB is sending more hints regarding its discomfort with euro strength. Not only is the spot resilient to ECB talk, but options are largely ignoring the likelihood of a large move."
"Buying vol has proved costly and risk reversals are unattractive because they remain too directional with spot. Instead, we go long EUR/USD butterflies as a cheap hedge against an ECB move and a vol regime change, as they collapsed to 2007 levels."