Currency strategists at Nomura note that though the major part of the recent concerns was about the United States, the real threat comes from Europe.
The specialists note that Spanish and Italian bond yields climbed so high that the European Central Bank was forced to step in. The ECB is currently trying to stabilize the markets by purchasing the government debt of the nations in question.
Nomura analysts, however, believe that as the rollover needs in Italy and Spain are very large the central bank will have to buy huge amounts of bonds to succeed. The bank thinks that the ECB doesn’t have enough funding, so it finds itself in a very difficult position. The bank advises to sell euro against Swiss franc.
Chart. Daily EUR/USD
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