Forex Video : Current status of JPY, AUD and GBP

On World Wide Exchange Peter Rosenstreich talks about the prospects of the yen, aussie and sterling

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Ross Westgate
OK on the currency markets we've got the yen up against the dollar and the dollar pretty much up against
everything else. Dollar yen down to 89; euro dollar slipped below 149; sterling 16694 it's rallied a little bit
actually after falling after, we had data out a short while ago which saw UK public debt spiralling, retail
sales rose although not as much as expected for the month of October. Joining us for more, Peter
Rosenstreich, Chief Market Analyst at Advanced Currency Markets. Peter, we still, you know we talk a lot
about dollar weakness. It's not weaker today, we've got less risk appetite in the market. It's down against
the commodity currencies and on the major cross rates we're still totally in the ranges. So are we gonna
shake out of this, or not?

Peter Rosenstreich
Well I think eventually we will. You know, we're getting ready a strong move in equities. We see the
recent de-coupling between equity prices and FX pricing is short-lived and we expect FX pricing to catch
up to the rally in the equity markets. We are very much range-bound. It's Thursday, you know, we had a
nice risk rally yesterday so today we're taking risk off the table. I wouldn't take too much into it. I wouldn't
expect that this is going to be a rally in dollar strength over the longer term.

Christine Tan
Hi Peter, this is Christine here. How much stronger do you expect the Japanese yen to get from here?

Peter Rosenstreich
Well you know I think the Japanese yen is really trading on the risk appetite story. It's not trading by its
underlying, in fact the recent moves by J G B's perhaps lean to the fact that there's some real concern
about the underlying economy in Japan. So the risk appetite trade we see a little bit more on the upside
meaning that the dollar yen should trade down to the 88 levels, but we don't expect much further
weakness in the dollar yen.

Christine Tan
What about the Aussie dollar, Peter, down for a third day? Are the chances of a rate hike in December
less likely now?

Peter Rosenstreich
Well we think, you know, obviously that come to the forefront after the recent comments, after the minutes
came out but we still think that the 25 is in the cards in December and we think the Aussie dollar is still
one of the best positioned trades in the FX market right now. The commodity story while there's a lot of
speculation that there's an enormous bubble, we see that it's more sort of slightly over-valued but not at
the bubble level, meaning that commodities, especially precious metals, can continue to rally higher and
that will benefit the dollar, the Aussie dollar in the longer run.

Ross Westgate
Peter, gilts have slipped after pretty dismal UK borrowing data. What's the outlook, what does this mean
for sterling traders?

Peter Rosenstreich
Well I think the sterling was really based or looking forward to that retail number supporting the fact that
the domestic economy had recovered slightly better, there were a string of very good retail sales
numbers. And after that confusing MPC minutes yesterday they wanted some reassurance that the UK
economy was back on track and I think that the slightly disappointing retail sales numbers today probably
took the sterling back a step and we should see some level of selling as traders start thinking about
additional quantitative easing.

Ross Westgate
Yeah I mean FTSE's just come out and says QE could stop or carry on at the February MPC meeting. I
mean I think the jury's still out, isn't it? You have to take a view of your trader that there might still be
some more.

Peter Rosenstreich
Absolutely, I mean that 40 billion sterling vote I think really threw off the market saying while there's real
consideration about additional QE, it's not just in these blocks and we don't have the MPC figured out or
in our sights and we understand exactly their thinking, I think that really threw a wrench into the sterling
play.

Ross Westgate
OK, Peter. Thanks for that. Peter Rosenstreich, Chief Market Analyst at Advanced Currency Markets,
thank you.