RBC Capital Markets comments on the EUR/USD
- Short EUR/USD around current levels
- Targeting 1.05
- Then 1.0073
(Comments from Friday)
Further comments on hedging:
- Says "huge capital flows may be currency-neutral if the currency is hedged"
- "Changing hedge ratios can lead to big currency moves without any underlying asset reallocation"
- Adds that negative eurozone rates and rising short rates in the US "are pushing EURUSD forwards further in US investors' favor while USD gains dramatically increased the cost of being unhedged"
- "Over the last 12 months, inflows into hedged European equity ETFs listed on non-eurozone exchanges have outpaced those into unhedged European equity ETS by a factor of 4:1"
