Yesterday was somewhat of a sour day in the financial markets

Yesterday was somewhat of a sour day in the financial markets, and in the FX markets we saw several Eastern European currencies weaken, while the yen and the Swiss franc continued their increase. Therefore CHF/HUG is now testing a former peak at about 209, and if this level is really breached, we may see a number of stop-loss orders in the market, which will intensify the movement towards higher levels. A breach of the levels at about 209-210 for CHF/HUF will therefore most likely send up CHF against EUR and DKK, and hence the levels of support at about 134.80 for EUR/CHF (5.52 for CHF/DKK) will definitely be within reach.

USD fell a bit against EUR yesterday in the wake of the interest-rate meeting of the Fed Wednesday night. Particularly the Fed’s slightly less optimistic view of the economic prospects caused investors to sell USD, yet in no way did we see a significant downturn.
Risk aversion is slowly building up, and if this trend continues, USD will most likely see support. Therefore, for the time being we maintain our negative view of EUR/USD, and from a technical point of view the downtrend seems still to be intact.

Yesterday the June issue of FX-Spot On was published (in Danish - the English version will be published soon); this issue contains updates on our estimates for the currencies in our research universe (please note that the coverage of emerging-markets currencies has been expanded to cover PLN, HUF, MXN, BRL, ZAR and CNY as well). We see that generally the panic relating to the debt crisis has abated, but we are still of the opinion that it is premature to think the crisis is over. Therefore we also expect that EUR will continue to fall against USD over the coming months – albeit not at the pace we have seen over the first six months of 2010.