On the crosses

Posted by Scriptaty | 12:56 AM

Most analysts believe the yen is a strong buy on many major crosses, including the Euro/yen (EUR/JPY), Swiss franc (CHF/JPY), and the British pound (GBP/JPY).

“The European economy and the UK continue to stagnate, with no plan or ammunition to rejuvenate growth,” says Dolan. “[I don’t see] anything in the next couple of years which will help the European economy to rebound, while the Asian region is the story for the next several years.”

The EUR/JPY rate, which was trading around 131.50 mid-June, could fall toward 130.00 initially, but eventually retreat to the 124.00/125.00 area in the second half, according to Dolan.

Tom Rogers, senior currency analyst at Thomson Financial, agrees. He sees potential for Euro/yen to retreat to the 126.00/125.00 area.

“There is interest to sell Euro/yen,” he says. “People hate the Euro because of all the political stuff that is going on over there. There is no real hope for Euro/yen.”