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4 Jul 2013
Flash: JPY maintains its safe haven appeal – Westpac
FXstreet.com (New York) - According to Sean Callow, a Global FX Strategist at Westpac, “The JPY’s lingering safe haven appeal was evident when EUR/JPY tumbled -1.3% in short order as Portugal came under heavy pressure.”
The resignation of Portugal’s (bond market-friendly) finance minister and then foreign minister raised the danger of fresh elections and doubts over the bailout package.
“This came as Greece was reportedly given a deadline of the weekend by the IMF and European lenders to produce new fiscal measures. Such tensions - and likely resilient demand for USD on optimism over the US economy - leave us content with our short the EUR/USD stance. The ECB’s OMT bond backstop remains a powerful weapon. However, should it need to be unleashed for the first time, it is hard to see EUR emerging without some serious collateral damage.” Callow adds.
The resignation of Portugal’s (bond market-friendly) finance minister and then foreign minister raised the danger of fresh elections and doubts over the bailout package.
“This came as Greece was reportedly given a deadline of the weekend by the IMF and European lenders to produce new fiscal measures. Such tensions - and likely resilient demand for USD on optimism over the US economy - leave us content with our short the EUR/USD stance. The ECB’s OMT bond backstop remains a powerful weapon. However, should it need to be unleashed for the first time, it is hard to see EUR emerging without some serious collateral damage.” Callow adds.