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1 Apr 2013
Forex Flash: Widening rate differentials to keep EUR/USD down - Societe Generale
FXstreet.com (Barcelona) - Societe Generale remains long USD "as a core position" says Sebastien Galy, currency strategist at the bank, who still finds no reason to cancel calls for short EURUSD as the main deal.
Mr. Galy notes: "Cyprus decided to effectively freeze all deposits above 100k in the two banks and in the offshore one to swap 60 percent for stocks. Excluded are government and financial institutions. Trusts are completely frozen until ID is shown. It looks like a very raw deal for what are presumed russian clients, suggesting we haven't heard the last of it."
According to Sebastien, the latest news "will increase the perception that gvt debt is ultra prime in Europe and this at the expense of all, which should reinforce the widening differential between EU and US rates, pushing EURUSD lower..."
Mr. Galy notes: "Cyprus decided to effectively freeze all deposits above 100k in the two banks and in the offshore one to swap 60 percent for stocks. Excluded are government and financial institutions. Trusts are completely frozen until ID is shown. It looks like a very raw deal for what are presumed russian clients, suggesting we haven't heard the last of it."
According to Sebastien, the latest news "will increase the perception that gvt debt is ultra prime in Europe and this at the expense of all, which should reinforce the widening differential between EU and US rates, pushing EURUSD lower..."