FX Forecast Update - Danske Bank · Forecast: 9.30 (1M), 9.30 (3M), 9.20 (6M), 9.00 (12M) EUR/SEK...

FX Forecast Update 15 June 2015

Final stage of USD rocket

Thomas HarrGlobal Head of FICC Research

Stefan Mellin Jens Nærvig Pedersen Kristoffer Lomholt Senior Analyst Senior Analyst Analyst y y y

Morten Helt Christin Tuxen Vladimir Miklashevsky Senior Analyst Senior Analyst Analyst

www.danskebank.com/research

Investment Research

www.danskebank.com/CIImportant disclosures and certifications are contained from page 32 of this report.

Main forecast changes part I

• EUR/NOK. The 18 June Norges Bank (NB) meeting will be key for the short-term outlook of the cross. Wet 25b t Th d b t thi i l d f ll i d I t d t d i i f thexpect a 25bp cut on Thursday but this is already fully priced. Instead we expect an upward revision of the

NB rate path (especially for 2016) to send the cross lower towards our 1M target of 8.60 (previously8.65). Post June we think the end of Norges Bank easing together with ECB QE will drag the cross lower.We still target EUR/NOK at 8.45 in 3M, 8.25 in 6M and 8.15 in 12M.

• EUR/SEK: We lower the 1-3M forecasts to 9.30 (from 9.40) now that we see Riksbank staying on hold in July amid keeping a soft tone. We leave our 6 and 12M forecast unchanged at 9.20 and 9.00, respectively.

• EUR/DKK: We expect EUR/DKK to trade close to the central rate in the coming 12M with the looming risk f G k d f lt d it f th th h d d th th h d d l d li i th of a Greek default and exit from the euro on the one hand and on the other hand a gradual decline in the

Danish FX reserve and the market pricing unilateral rate hikes being the key drivers.

• EUR/USD: We maintain that relative rates will move in favour of a lower EUR/USD in the months ahead and are rolling our forecasts such that we maintain a bottom early autumn, now targeting 1.10 in 1M (prev. g y , g g (p1.13), and 1.04 in 3M (prev. 1.08). But, once eurozone (headline) inflation starts edging up in H2, the re-pricing of the Fed has come to an end, and an eventual ECB QE exit moves to the fore, EUR/USD should start its journey towards the (higher) levels warranted by medium- to longer-term fundamentals. We now project the cross at 1.06 in 6M (prev. 1.02) and 1.10 in 12M (prev. 1.08).p j (p ) (p )

2www.danskebank.com/CI

Main forecast changes part II

• EUR/CHF: The SNB has largely run out of instruments and will likely prefer to signal negative rates for an d d i d h h l f h Th h SNB k h k li extended period rather than lower rates from here. Thus we now expect the SNB to keep the key policy

rates unchanged at -0.75% in June. With markets pricing some probability of a cut within 6M, we have upped our 1M EUR/CHF forecast slightly to 1.04 (prev. 1.03) but still see the cross higher further out with a 12M forecast of 1.10 still.

• AUD/USD. We expect more AUD/USD downside to play out: the AUD still suffers from a significant terms of trade shock and with the September Fed hike looming we expect the cross to depreciate further. We target AUD/USD at 0.76 in 1M (previously 0.78) and 0.74 (0.75) in 3M. We expect the cross to stabilise in 6-12M, when a Fed hiking cycle has been priced and the �Aussie� economy recovers. We still target the , g y p u y gcross at 0.73 in 6M and 12M.

• NZD/USD: RBNZ has shifted to clear easing mode with the early-June cut. We have lowered our near-term forecasts and now see the cross hitting 0.65 in 6M (prev. 0.69). On a 12M horizon we do, however, expect USD t th t f d d NZD/USD t bili i d th 0 70 k (12M f t h d)USD strength to fade, and see NZD/USD stabilising around the 0.70 mark (12M forecast unchanged).

• USD/RUB: Looking at the average USD/RUB level and the average oil price within the last 30 days, the overvalued rouble poses fiscal risks to the Russian budget. Looking ahead, we expect rouble weakness to resume, driven by significantly higher Russian inflation than in the outside world and a weak macro , y g y gsituation. We raise our 1M forecast for USD/RUB to 57.00 (53.00) and keep the long-run forecasts (3-12M) unchanged at 60.00, 63.00 and 70.00, respectively.


Forecast: 8.60 (1M), 8.45 (3M), 8.25 (6M), 8.15 (12M)

EUR/NOK �Norges Bank to send cross lower• Growth. The Q2 Norges Bank (NB) Regional Survey showed weaker

future economic activity than projected by NB in its March MonetaryPolicy Report (MPR 1 15) The latest oil investment survey for May 9 75

10.00 EUR/NOK

Policy Report (MPR 1-15). The latest oil investment survey for May,however, was significantly better than feared with the first 2016projection indicating a flattening out of investments. While inflationdata have been marginally below NB�s projection, the divergence inunemployment measures (i.e. LFS and registered unemployment)

ti Fi ll lth h th il i i b th MPR 1 8 25

8.50

8.75

9.00

9.25

9.50

9.75

continues. Finally, although the oil price remains above the MPR 1-15 projections, the NOK (i.e. the I44) is currently weaker thanprojected in March.

• Monetary policy. In March NB presented a rate path with a 25bp cutin Q2 and a 20% probability of another cut in Q1 �16. We expect NB EUR/NOK 1M 3M 6M 12M

k

7.75

8.00

8.25

Jun-14 Sep-14 Jan-15 Apr-15 Jul-15 Oct-15 Feb-16 May-16

75% conf. int. 50% conf.int. Forward Danske fcst Consensus fcst

in Q2 and a 20% probability of another cut in Q1 16. We expect NBto cut the sight deposit rate at the coming 18 June meeting(consensus). At the same meeting we expect NB to revise up therate path (not consensus) � especially for 2016.

• Flows. NOK sentiment has seen some very large fluctuations in theConclusion Since the May FX Forecast Update EUR/NOK has

Source: Danske Bank Markets

EUR/NOK 1M 3M 6M 12M

Forecast (pct'ile) 8.60 (35%) 8.45 (25%) 8.25 (19%) 8.15 (21%)

Fwd. / Consensus 8.74 / 8.50 8.76 / 8.50 8.79 / 8.42 8.84 / 8.38

50% confidence int. 8.52 / 8.92 8.44 / 9.01 8.34 / 9.13 8.24 / 9.27

75% confidence int. 8.39 / 9.10 8.25 / 9.27 8.09 / 9.48 7.87 / 9.75

past months. While foreign banks (proxy for speculative flows)according to Norges Bank�s FX transactions statistics net bought theNorwegian currency in April worth NOK14.3bn, the same banks havesince May net sold the NOK for an accumulated 14.7bn. The recentsell-off highlights upside potential for the NOK.

Conclusion. Since the May FX Forecast Update, EUR/NOK hasovershot our 1M forecast due to a somewhat perfect storm withsignificantly higher EUR-rates, substantially higher marketvolatility and a lower oil price. Relative to NB�s projectioneconomic data out of Norway have been mixed, yet on averagesupport our (consensus) call for a 25bp sight deposit rate cut on

• Valuation. Our PPP models put EUR/NOK at c.8.18, suggesting thatthe NOK is fundamentally cheap. According to our FX short-termfinancial model, EUR/NOK is overbought.

• Risks. Short-term risks are that NB on Thursday is more dovish than

support our (consensus) call for a 25bp sight deposit rate cut onThursday. On the other hand, we believe that market pricing offuture NB monetary policy is too dovish and we expect an upwardrevision of the new rate path on Thursday to support the NOK andsend EUR/NOK lower towards our 1M target of 8.60.


expected (upside) or that we get a �Grexit� (downside). Medium term,the risks are that the lagged effects of the oil price collapse have amore severe impact on the Norwegian economy than anticipated.

4

Post June we think the end of Norges Bank easing together withECB QE will drag the cross lower. We still target EUR/NOK at8.45 in 3M, 8.25 in 6M and 8.15 in 12M.

Kristoffer Kjær Lomholt, Analyst, [email protected], +45 45 12 85 29

EUR/NOK � important issues to watch

NB meeting on 18 June is key for the short-term outlook.NB�s rate path includes a 25bp rate cut in Q2 15 � a cut that we

Norges Bank pricing is too dovish in our view

1 25%1.40%NB s rate path includes a 25bp rate cut in Q2 15 a cut that we

think governor Olsen will deliver next Thursday. Our expectation of a 25bp cut to 1.00%, however, has become a consensus call and as shown in the chart to the right , financial markets close to fully price this. Focus on Thursday will therefore be on NB�s indications for

1.25%

-24

-36-44 -44 -43

0 60%

0.80%

1.00%

1.20%Norges Bank Pricing*

future monetary policy, i.e. the new sight deposit rate path.

The rate path in MPR 2-15 is keyThe weaker growth outlook suggested by the regional network survey will probably be enough for Norges Bank to cut its growth 0.00%

0.20%

0.40%

0.60%

Jun15 Sep15 Dec15 Mar16 Jun16y p y g g gforecast for 2015 from 1.5% to 1.25%. However, the May oil investment survey suggested that oil investment will flatten out in 2016. This is much better than previously expected and will push the growth forecast for next year up to 2.5%. At the same time,

f 2 %

First oil investment estimate for 2016 was significantly better than NB feared in March


Jun15 Sep15 Dec15 Mar16 Jun16*Approx. from stripped FRAs / indicate Norges Bank's planned rate decisions in 2015

15/06/2015 13:09

the national pay deals are pointing to wage growth of 2.75% this year, which is somewhat below the central bank�s March estimate of 3%. Slightly lower inflation will marginally drag the path lower. The krone, on the other hand, is weaker than NB anticipated in March which will contribute to a higher rate path

significantly better than NB feared in March

March, which will contribute to a higher rate path.

We expect a NOK-positive market reactionOn balance, there is the prospect of a moderate upward revision of the interest rate path, especially for 2016, and we expect NB to signal that interest rates will hit the bottom at 1% This call is


to signal that interest rates will hit the bottom at 1%. This call is more hawkish than current market expectations/pricing and should send EUR/NOK lower.

Source: Norway Statistics, Danske Bank MarketsKristoffer Kjær Lomholt, Analyst, [email protected], +45 45 12 85 29

Forecast: 9.30 (1M), 9.30 (3M), 9.20 (6M), 9.00 (12M)

EUR/SEK �Riksbank takes a pause, but ready to act

• Growth. We expect the Swedish economy to grow above trendi 2015 d t t l d R l ti fin 2015 and to outgrow euro land. Relative performancecoupled with the global rebound that we foresee will, in our view,support a recovery in the krona over the medium term.

• Monetary policy. Inflation expectations seem to have troughed(P ) i fl ti i b k t (CPI) d b (CPIF) th 9 00

9.25

9.50

9.75

10.00 EUR/SEK

(Prospera), inflation is back at (CPI) and above (CPIF) theRiksbank forecast, whereas EUR/SEK is stuck in a range andKIX is only 2% below the Riksbank forecast. We therefore nolonger think the Riksbank will cut in July, which means reducednear-term upside risk for EUR/SEK. Instead, we pencil in a final

8.25

8.50

8.75

9.00

Jun-14 Sep-14 Jan-15 Apr-15 Jul-15 Oct-15 Feb-16 May-16p / p

10bp rate cut in December 2015 (see next page for details).

• Flows. The commercial flow outlook is slowly improving. Weexpect to see more FX hedging activity among companies withEUR and USD revenues as EUR/SEK and USD/SEK go higher.

EUR/SEK 1M 3M 6M 12M

Forecast (pct'ile) 9.30 (74%) 9.30 (68%) 9.20 (57%) 9.00 (44%)

Fwd. / Consensus 9.18 / 9.30 9.17 / 9.28 9.17 / 9.20 9.16 / 9.01

50% confidence int. 9.03 / 9.30 8.93 / 9.37 8.82 / 9.44 8.68 / 9.53

75% confidence int. 8.93 / 9.42 8.78 / 9.58 8.61 / 9.73 8.40 / 9.92

k75% conf. int. 50% conf.int. Forward Danske fcst Consensus fcst

/ / g gSwedish asset managers are likely to gradually start raisingtheir hedges of foreign exposure.

• Valuation. The Riksbank is trying its best to keep the kronaundervalued. Fundamental models suggest that it is up to 10%

Conclusion. EUR/SEK has established a 9.15-45 range. Theupside is capped by the ECB and fundamentals whereas theRiksbank stands ready to mitigate any excessive downside.Th t id d �t thi k th t th Rik b k h fi d i


gg pundervalued versus the euro (see next page).

• Risks. Riksbank: If it opts for a rate cut in July, EUR/SEK wouldlikely go higher than we forecast over 1-3M. But probably onlytemporarily. Greece: A �Grexit� would send EUR/SEK lower than

That said, we don�t think that the Riksbank has a fixed painthreshold for EUR/SEK, rather it depends on the pace of SEKappreciation and the circumstances. We lower our 1-3Mforecast to 9.30 (9.40) now that we see Riksbank staying onhold in July while keeping a dovish tone. Should the Riksbank


p y /forecast. Again, only temporarily, since the Riksbank would belikely to step in.

6

cut in December, the SEK may come under pressure, but fornow we keep our 6M forecast unchanged at 9.20.

Stefan Mellin, Senior Analyst, [email protected], +46 8 568 805 92

EUR/SEK � important issues to watch

Th Rik b k EUR/SEK 9 20 9 40 i M hThe Riksbank

− First, the latest Prospera survey showed that inflationexpectations have troughed on all horizons; undoubtedly arelief for the Riksbank although expectations are still low.Secondly May inflation bounced after the low reading in April

EUR/SEK 9.20-9.40 range since March

Secondly, May inflation bounced after the low reading in Aprilso that inflation is back in line with (CPI) and above (CPIF) theRiksbank�s forecast. Thirdly, EUR/SEK has been rangebound. The Riksbank should take comfort in this and as aresult will probably refrain from launching any newmeasures on 2 July. However, we think the tone of themessage will remain dovish, probably keeping an easing bias.

− Does this mean that the Riksbank is done in this cycle? Wedon�t think so. From September we see a substantial gapbetween our and the Riksbank�s inflation forecasts If our

Source: Macrobond, Danske Bank Markets, the Riksbank

SEK undervalued vs most G10 currencies (FEER approach)between our and the Riksbank s inflation forecasts. If ourforecast proves correct, the Riksbank is likely to respond.We consider a final 10bp cut likely before year end.

− Upside risks in EUR/SEK should diminish in the near term.But by keeping the door open for more later, the Riksbank

SEK undervalued vs most G10 currencies (FEER approach)

But by keeping the door open for more later, the Riksbankmay still succeed in keeping the SEK undervalued for longer.

Valuation

− Fundamentals suggest that the Riksbank is perhaps the onlyobstacle to a lower EUR/SEK. Using a PPP approach,


/ g pp ,EUR/SEK is ca. 10% above equilibrium. Using the so-calledFEER approach (current account and more) EUR/SEK is ca7% above its long-term equilibrium value.

Source: PIIE, Macrobond, Danske Bank Markets

Stefan Mellin, Senior Analyst, [email protected], +46 8 568 805 92

EUR/DKK outflow continued in May

• FX. In April and May, Danmarks Nationalbank (DN) sold Spot 7.4598 7.4610 7.4550 7.4550 7.45503M F d ( b ) 7 4514 ( 45) 7 4525 ( 46) 7 4475 ( 40) 7 4475 ( 40) 7 4475 ( 40)

1M 3M 6M 12M15/06/2015

DKK69bn of FX to cap EUR/DKK upside. The outflow in Aprilwas mainly due to foreigners reducing short-term positions inDKK, while the outflow in May was due to both foreign anddomestic selling of DKK. We expect EUR/DKK to stay elevatedin the near term at 7.4610 on a 1M horizon, before dropping

3M Forward (ann. carry, bp) 7.4514 (-45) 7.4525 (-46) 7.4475 (-40) 7.4475 (-40) 7.4475 (-40)6M Forward (ann. carry, bp) 7.4450 (-40) 7.4460 (-40) 7.4425 (-34) 7.4425 (-34) 7.4425 (-34)12M Forward (ann. carry, bp) 7.4349 (-33) 7.4340 (-36) 7.4375 (-23) 7.4375 (-23) 7.4375 (-23)

in the near term at 7.4610 on a 1M horizon, before droppingto 7.4550 on 3M to 12M supported by two unilateral ratehikes by DN .

• Rates. Normally, an intervention of the order of DKK10-20bnwould trigger a unilateral rate change, so this is clearly agg g ydeparture from DN�s normal reaction function. The changecould be due to DN targeting lower FX reserves following thestrong inflow in January and February. Alternatively, it could beholding out on a rate hike due to the present uncertain marketsituation in particular with a potential Greek exit from the euro

Source: Macrobond Financial, Danske Bank Markets

situation, in particular with a potential Greek exit from the eurolooming. We expect Greece and its creditors to strike a deal,and this to trigger additional outflow from DKK and DN to raisethe rate of interest on certificates of deposit (CD rate) by 15bpon 3M and 10bp on 6M to minus 0.50%.

• Flows. The Danish current account (CA) surplus is above6% of GDP � the highest since 1875 excluding WWI andWWII. This supports a stronger DKK. We expect a largesurplus on the CA in the next few years.

• Liquidity. We estimate the total effect on DKK liquidity of thesuspension of government bond issuance at around DKK70bn.We expect issuance to resume when the government�sdeposits have dropped below DKK100bn, relieving thegovernment from the need to pay a negative interest rate on

• Conclusion. EUR/DKK is set to trade close to the centralrate on a 12M horizon with downside risks owing to theuncertain Greek debt situation and further impact fromthe ECB�s bond purchases.


government from the need to pay a negative interest rate ondeposits. This may happen in Q4, but more likely during H12016.

8Jens Nærvig Pedersen, Senior Analyst, [email protected], +45 4512 8061

Forecast: 1.10 (1M), 1.04 (3M), 1.06(6M), 1.10 (12M)

EUR/USD � final stage of the USD rocket as Fed hikes • Growth. The data surprise gap, which moved firmly in favour of

the eurozone versus the US at the start of the year hasthe eurozone versus the US at the start of the year, hasstarted to correct in favour of a lower EUR/USD. This is nowhappening both as a result of stronger US and weaker eurodata. We still look for US data to rebound in the months ahead.Further out, we see eurozone inflation picking up during the

1 10

1.20

1.30

1.40 EUR/USD

autumn followed by higher core inflation eventually, as theoutput gap may close sooner than markets expect.

• Monetary policy. We maintain that the Fed-ECBasynchronisation has further to run in terms of EUR/USDd id f l ti t ith th h t d f th i ld

0.90

1.00

1.10


75% conf. int. 50% conf.int. Forward Danske fcst Consensus fcstdownside from relative rates, with the short end of the euro yieldcurve kept in check by ECB determinedness to carry out its QEbuying through September 2016, and the US curve set for a levelshift and steepening as the Fed delivers on policy tightening witha first hike in September. An ECB exit discussion should flare up Source: Danske Bank Markets

EUR/USD 1M 3M 6M 12M

Forecast (pct'ile) 1.10 (30%) 1.04 (12%) 1.06 (20%) 1.10 (34%)

Fwd. / Consensus 1.12 / 1.08 1.12 / 1.06 1.12 / 1.05 1.13 / 1.04

50% confidence int. 1.09 / 1.15 1.08 / 1.17 1.08 / 1.19 1.06 / 1.21

75% confidence int. 1.07 / 1.18 1.04 / 1.20 1.02 / 1.22 0.98 / 1.26

k

in H2 though and limit the eurozone versus US disconnect onrates at a time when the Fed will want to signal its willingness togo slow on rate hikes.

• Flows. While still stretched, some USD longs have beend i h l i k i f

Conclusion. Fundamentals still favour a lower EUR/USD on a 3-6Mhorizon in our view, with the outlook for a first Fed hike earlier thanpriced, and an ECB committed to an aggressive easing scheme. Thus,relative rates will in our view again start to weigh on EUR/USD overthe summer We still think EUR/USD will bottom in early autumn andunwound since the early spring peak, suggesting room for new

ones to be added from here. At the same time the weaker euroequity markets recently may have caused foreign investors tounwind FX hedges (EUR short covering).

• Valuation PPP is around 1 23 suggesting the cross is

the summer. We still think EUR/USD will bottom in early autumn andare rolling our forecasts such that we maintain a bottom early autumnwith the cross edging towards parity as Fed delivers the first hike. Wenow see 1.10 in 1M (prev. 1.13), and1.04 in 3M (prev. 1.08), but onceeurozone (headline) inflation starts edging up in H2, the re-pricing ofthe Fed has come to an end and an eventual ECB QE exit moves to the


• Valuation. PPP is around 1.23, suggesting the cross isundervalued. Our short-term models suggest 1.10 as �fair�.

• Risks. The Fed hesitating on rate hikes due to USD strength.9

the Fed has come to an end, and an eventual ECB QE exit moves to thefore, EUR/USD should start its journey towards the (higher) levelswarranted by medium- to longer-term fundamentals. We now projectthe cross at 1.06 in 6M (prev. 1.02) and 1.10 in 12M (prev. 1.08).

Christin Tuxen, Senior Analyst, [email protected], +45 45 13 78 67

EUR/USD � important issues to watch

It�s all about relative rates! Downside potential in EUR/USD from relative rates− In FX Strategy: G3 - it's all about relative rates, 29 May

2015, we stressed that a large part of the currencymoves seen over the past month can be explained byrelative interest rates.

Downside potential in EUR/USD from relative rates

− Given our rate strategists� call for the euro-US yieldspread to widen, we thus maintain that EUR/USD will seesignificant downside as a first Fed hike is approaching.

− Moreover, there is currently a gap between whererelative rates suggest EUR/USD should be headedrelative rates suggest EUR/USD should be headed(lower) and where we are actually trading. This suggestspotential for the cross to fall as US data rebound.

Output gaps could close sooner than you think

− Output gaps are currently negative in both the US andSource: Macrobond Financial, Danske Bank Markets

Output gaps may close sooner than the IMF predictsp g p y g

the euro zone and while the US gap is set to close first,the eurozone may not lag as far behind as one predicts.

− In Euro area fundamentals no. 2: The output gap willclose quickly - implications for the ECB , 3 June 2015,our economists argue that the euro zone output gap

Output gaps may close sooner than the IMF predicts

our economists argue that the euro-zone output gapcould close earlier than both the OECD and the IMFcurrently project, namely in Q2 2017.

− In any case the weaker eurozone growth potential aheadsuggests that even a mediocre growth scenario for


gg gEurope could fuel wage pressure. Coupled with a pick-upin headline inflation later this year, this could kick-startan ECB tapering discussion towards year end.

Source: IMF, Macrobond Financial, Danske Bank MarketsChristin Tuxen, Senior Analyst, [email protected], +45 45 13 78 67

http://danskeanalyse.danskebank.dk/abo/FXStrategyUSDG3290515/$file/FXStrategy_USDG3_290515.pdf

http://danskeanalyse.danskebank.dk/abo/FlashCommentEuroArea030615/$file/FlashComment_EuroArea_030615.pdf

Forecast: 0.72(1M), 0.70(3M), 0.70 (6M) and 0.71 (12M)

EUR/GBP �more sterling strength in store

• Growth. UK GDP growth slowed in Q1 15 to 0.3% q/q from 0.6% q/qin Q4 15. Growth is still mainly being driven by domestic demand. Weexpect it to rebound in the coming quarters as employment hasincreased and the economy is seeing positive real wage growth forthe first time since 2009. Increasing growth in the rest of Europe willalso support exports (should more than offset the negative impact 0.70

0.75

0.80

0.85 EUR/GBP

from the strong GBP, according to calculations by Bank of England).UK is now in deflation as CPI inflation fell to -0.1% y/y in April from0.0% in March. We expect inflation to reach around 1% at the end ofthis year and around 1.7% at the end of 2016.

• Monetary policy We expect the MPC to hike in November this k

0.60

0.65



Monetary policy. We expect the MPC to hike in November thisyear. Although headline inflation is likely still to be low at thispoint, we think that the MPC members will judge that the medium-term inflation outlook calls for tighter monetary policy. We expectthe BoE to increase interest rates relatively modestly by around75bps pa in the coming years taking the Bank Rate to 1 5% by Conclusion In the short term the outlook for EUR/GBP lies in the


EUR/GBP 1M 3M 6M 12M

Forecast (pct'ile) 0.72 (40%) 0.70 (22%) 0.70 (27%) 0.71 (36%)

Fwd. / Consensus 0.72 / 0.71 0.73 / 0.70 0.73 / 0.70 0.73 / 0.71

50% confidence int. 0.71 / 0.74 0.70 / 0.75 0.70 / 0.76 0.69 / 0.77

75% confidence int. 0.70 / 0.75 0.68 / 0.77 0.67 / 0.78 0.65 / 0.80

75bps pa in the coming years, taking the Bank Rate to 1.5% bythe end of 2016. The market is pricing in the first full 25bps ratehike in June 2016 and expects the BoE to hike less than twice peryear (around 45bps hikes per year on average). Hence, if we areright about the hike in Q4 15 and the pace of future hikes, the BoEis still priced much too dovishly

Conclusion. In the short term, the outlook for EUR/GBP lies in thehands of the European sovereign bond market, where further selloffswill continue to underpin the cross. However, we expect the Bank ofEngland to hike interest rates in November. This is not priced in themarket, and we still expect EUR/GBP to trade lower in the coming6M driven by relative rates from a repricing of Bank of England Weis still priced much too dovishly.

• Flows. Positioning is not stretched at present in our view.

• Valuation. PPP around 0.77 for EUR/GBP.

• Risks. As the Conservatives won an absolute majority inparliament, it is very likely that the UK will have an in/out EU

6M driven by relative rates from a repricing of Bank of England. Wehave rolled our forecast resulting in some minor adjustments. Wenow target the cross at 0.72 in 1M (previous 0.73) and 0.70 in 6M(0.69). As such, we still expect EUR/GBP to bottom in H2 but therisks are that the cross temporarily undershoots our 3M and 6Mestimates On a six- to 12-month horizon we expect EUR/GBP to


parliament, it is very likely that the UK will have an in/out EUreferendum before the end of 2017. This is a medium- to long-termrisk factor for the UK economy and GBP.

11

estimates. On a six to 12 month horizon, we expect EUR/GBP tostabilise and eventually move higher as the eurozone recovers andas eurozone inflation is set to pick up significantly. This should causeEUR downside to fade and we target the cross at 0.71 in 12 months.

Morten Helt, Senior Analyst, [email protected], +45 45 12 85 18

EUR/GBP � important issues to watch

Budget cuts present downside risk to growth rates and GBP UK GDP growth forecast (OBR)Budget cuts present downside risk to growth, rates and GBP

− George Osborne will present a supplementary budget on 8July, which will likely call for substantial cuts in publicspending. Clearly, further budget cuts will have a negativeimpact on growth and the question is how the Bank of England

UK GDP growth forecast (OBR)

will respond to this weaker growth outlook. At the June MPCmeeting Governor Carney declined to answer questionsregarding how the general election outcome would affect theBoE�s monetary policy.

− We believe that the OBR will likely have to cut its growthWe believe that the OBR will likely have to cut its growthforecasts, which are currently at 2.5% in 2015 and 2.3% in2016. As such, significant budget cuts are a downside risk toour interest rate and GBP forecasts as a weaker growthoutlook could postpone the first rate hike in the UK.

Source: ONS, OBR, Danske Bank Markets

Brexit: a market theme and long-term risk factor

− The in/out EU referendum due to be held before the end of2017 will be a market theme for the coming years andalthough it is too early to predict the outcome, it has made theeconomic outlook in the medium and long term more

UK divided on EU question

UK's EU Current Renegotiated economic outlook in the medium and long term moreuncertain.

− While uncertainty about the UK's EU membership is too faraway for the markets to digest right now, the lesson learnedfrom the Scottish referendum in 2014 is that you should

UK s EU membership (%)

Current terms

Renegotiated terms

Remain in the EU 46 57

Leave the EU 36 22

Would not vote 3 4


never underestimate the risk associated with this kind ofreferendum - especially as people tend to vote for all kinds ofreasons not necessarily related to the actual question.

Source: Bloomberg, Danske Bank MarketsMorten Helt, Senior Analyst, [email protected], +45 45 12 85 18

3

Don't know 15 17

Forecast: 123 (1M), 125 (3M), 126 (6M) and 127 (12M)

USD/JPY � valuation and political resistance to curb yen weakness• Macro outlook. Japan appears to be recovering after the

technical recession in the wake of the consumption tax hike in 140 USD/JPYtechnical recession in the wake of the consumption tax hike inApril last year, after the negative impact from the hike provedlarger than expected. GDP in Q1 15 expanded a solid 1.0% q/qafter increasing 0.3% q/q in the previous quarter, but therecovery remains fragile and has temporarily lost somemoment m in Q2 In partic lar pri ate cons mption has been 115

120

125

130

135

140 USD/JPY

momentum in Q2. In particular, private consumption has beenweaker than expected, but should strengthen in 2015 supportedby a strong labour market.

• Monetary policy. In our main scenario, we expect the BoJ tocontinue its current QE programme until 2017. This is based on

100

105

110

115


75% conf. int. 50% conf.int. Forward Danske fcst Consensus fcstp gour expectation that inflation will increase to around 1.5% y/y in H215, the output gap will continue to decrease and the consumptiontax hike due in April 2017 will raise growth concerns. We cannotrule out additional easing in 2016 if the BoJ is forced tosubstantially lower its inflation forecast for the fiscal year However Source: Danske Bank Markets

USD/JPY 1M 3M 6M 12M

Forecast (pct'ile) 123.00 (42%) 125.00 (62%) 126.00 (66%) 127.00 (68%)

Fwd. / Consensus 123.60 / 121.65 123.60 / 124.35 123.60 / 125.00 123.59 / 126.00

50% confidence int. 121.50 / 125.65 120.15 / 126.72 118.71 / 127.85 116.45 / 128.97

75% confidence int. 119.82 / 127.22 117.55 / 129.46 115.23 / 131.75 111.59 / 135.25

k

substantially lower its inflation forecast for the fiscal year. However,in the short run, additional easing is now very unlikely. Moreover,the risk of an early exit at some stage in 2016 should not beunderestimated.

• Flows. The Japanese current account flipped into deficit last year,

Conclusion. We still expect USD/JPY to remain supported byhigher US interest rates in the coming months, and target the crossat 126 in 6M. Given that the yen has become very undervalued �both from a PPP perspective and according to Bank of Japans real

but has improved recently. The trade balance turned positive inMarch and we expect it to continue to improve in 2015 as exportsare on a rising trend.

• Valuation. Our USD/JPY PPP estimate is around 84.

p p g peffective exchange rate measure - we would expect more verbaldefence of the JPY resulting in more two-way volatility in the comingmonths. Moreover, support to the yen should increase as theJapanese trade balance looks set to continue to recover. On a 6M to12M horizon, we expect USD/JPY to enter another period of range


• Risk. Speculators remain short JPY and USD/JPY could still behit by short covering on a larger scale � especially as speculatorsremain significantly long USD.

13

, p / p gtrading as it becomes clear the BoJ has stopped easing for now andas support for the USD eases following the first Fed hike inSeptember.

Morten Helt, Senior Analyst, [email protected], +45 45 12 85 18

USD/JPY � important issues to watch

Valuation and political resistance to curb yen weakness USD/JPY not far from significantly overvalued − The political discussion in Japan has become increasingly focused

on the weak yen and especially its negative impact on smallbusinesses and consumption, which have been hit by higher importcosts in particular. The communication from Japanese officialsregarding the exchange rate has intensified recently with Korudag g g ysaying on 10 June that JPY now appears to be undervalued on a realeffective exchange basis. His comment that �The yen is unlikely toweaken further in real effective terms if you think with commonsense, given how far it has come�, implies a shift in communicationsthat needs to be monitored.that needs to be monitored.

− The yen is indeed the most undervalued currency in the G10 spherein our view. According to our general PPP model, USD/JPY isnearing stretched levels implied by a 2 sigma deviation from thecurrent fair value estimate of 84 (+ 2 standard deviations is at127 84) Given that the yen has become very undervalued we would

Source: Bloomberg, Danske Bank Markets

Japan to run a trade balance surplus in 2015127.84). Given that the yen has become very undervalued we wouldexpect more verbal defence of the JPY resulting in more two-wayvolatility in the coming months.

Trade balance improvement a supporting factor for JPY

− Japan�s trade balance turned positive in March for the first time

Japan to run a trade balance surplus in 2015

p psince 2012. While this was mainly due to a rebound followingreduced activity in February in connection with the Lunar New Year,exports are on a rising trend and net exports should contribute 0.9%to GDP growth in 2015. Hence, we expect the current account toimprove substantially from around 0.5% of GDP in 2014 to 2.2% in


improve substantially from around 0.5% of GDP in 2014 to 2.2% in2015, primarily driven by a substantial improvement in the tradebalance. As such, this is a factor providing increasing support to theyen in the coming year.

Source: Bloomberg, Danske Bank MarketsMorten Helt, Senior Analyst, [email protected], +45 45 12 85 18

Forecast: 1.04 (1M), 1.04 (3M), 1.05 (6M) and 1.10 (12M)

EUR/CHF �SNB to signal negative rates for an extended period• Growth. Data out of Switzerland deteriorated markedly in

early May but has since stabilised. CPI inflation has stayed 1.25 EUR/CHFy y yin deflationary territory, further down in May with annualinflation now at -1.2%. That said, both the PMI and KOFsurveys have made turns for the better after spring dives.

• Monetary policy. Uncertainty regarding SNB policy in the 1 00

1.05

1.10

1.15

1.20

y y y g g ynew floating CHF regime remains high. SNB appears to havebroadly refrained from using intervention after some CHFselling late January. Recent communication suggests thatthe central bank now prefers rates as an instrument ofpolicy; in mid April the SNB thus expanded the set of sight

EUR/CHF 1M 3M 6M 12M

k

0.90

0.95

1.00



policy; in mid-April the SNB thus expanded the set of sight-deposit accounts that are eligible for negative rates.EUR/CHF is on the weak side of the 1.05 level but has notseen the downward pressure that would require the SNB toact. As a result, we no longer expect the SNB to cut rates in Conclusion. The SNB is on track to undershoot its inflation target

i ifi tl l CHF k f h H th SNB


Forecast (pct'ile) 1.04 (37%) 1.04 (40%) 1.05 (49%) 1.10 (76%)

Fwd. / Consensus 1.05 / 1.05 1.04 / 1.05 1.04 / 1.06 1.04 / 1.07

50% confidence int. 1.03 / 1.07 1.02 / 1.08 1.01 / 1.09 1.00 / 1.10

75% confidence int. 1.01 / 1.08 0.99 / 1.10 0.97 / 1.11 0.94 / 1.13

gJune but rather think Jordan and colleagues will signalnegative rates for an extended period. This may take the formof a more or less explicit time-, data- or CHF-contingentforward guidance.

significantly unless CHF weakens from here. However, the SNBhas largely run out of instruments: policy rates (at -0.75%) arealready probably close to a lower bound, and the central bank doesnot want its balance sheet to grow much further. Unless EURweakness returns on a broader note and sends EUR/CHF

• Flows. Speculators were significantly short CHF ahead ofthe SNB move but positioning has moved to net long.

• Valuation. PPP is around 1.26, whereas our short-termfinancial models suggest a �fair� level around 0.99.

significantly lower, we think the SNB will accept things as they are,i.e. that the SNB will let the Swiss economy �sweat it out� ondeflation and await a recovery in the eurozone and a EUR reboundto alleviate pressure. Thus we expect the SNB to keep the keypolicy rates unchanged at -0.75% in June. With markets pricing


• Risks. �Grexit� risks are a potential source of CHF strength.In the event of a Greek exit the SNB should, however, be OKto intervene as this would be seen as an extraordinary thing.

15

policy rates unchanged at 0.75% in June. With markets pricingsome probability of a cut within 6M, we have upped our 1MEUR/CHF forecast slightly to 1.04 (from 1.03) but still see thecross higher further out but a 12M forecast of 1.10.


EUR/CHF � important issues to watchSNB headaches: reconciling a floating CHF with price stability?

Th SNB ill t t i l h t i it diti l

Transmission of negative rates has been strong− The SNB will most certainly have to revise its conditional

inflation forecast lower again in June: currently, annual CPIinflation is not set to return to positive territory before early2017 and this is based on an unchanged Libor target rate aswell as weaker CHF.

− CHF has been broadly stable both in EUR and in effectiveterms since the March meeting. Given the SNB�s reluctanceto add to its balance sheet, rates seem the only viable optionfor policy � except that these are probably close to a de-factolower bound (where adverse effects could start to dominate)lower bound (where adverse effects could start to dominate).

Transmission of negative rates working...

− The SNB has taken some comfort from the fact that thetransmission of negative rates has proved decent and is thusnot impaired to any great extent by the sustained move below Swiss real interest rates on the rise as inflation drops


not impaired to any great extent by the sustained move belowzero this year, but 10Y government-bond yields have felt thepain from higher eurozone yields recently.

...but real rates on the rise as inflation (actual/expected) drops

− The upward pressure on longer-dated rates coupled with a

Swiss real interest rates on the rise as inflation drops

marked drop in CPI inflation as well as in inflationexpectations (as judged from the SECO survey) highlights theSNB challenge of anchoring inflation expectations.

− In our view the SNB can do little but try to anchor inflationexpectations by signalling that negative rates are set to be a


expectations by signalling that negative rates are set to be anew Swiss normal for an extended period of time.

− Adjustments to the terms and conditions for sight-depositaccounts that are charged negative rates is also an option. Source: Macrobond Financial, Danske Bank Markets


Forecast: 1.24(1M), 1.26(3M), 1.27(6M) and 1.25 (12M)

USD/CAD �BoC done cutting as US growth and oil recover

• Growth. Canadian data have made a significant turn for the ( ), ( ), ( ) ( )better of late alongside the latest uptick in the oil price. The Mayemployment report was strong as were retail sales but CPI andGDP reports have been less upbeat. We stress that oil risks havebecome more two-sided as opposed to dominated by downsidepreviously and it should be positive for Canada that the OPEC 1.25

1.30

1.35

1.40 USD/CAD

p y pprice war seems to be fading somewhat. Canadian activity shouldbenefit from our call for US growth to recover in Q2 via positivespillover to the export sector.

• Monetary policy. Following its insurance rate cut in January, theB k f C d h ld t h d i i M I d d B C

1.05

1.10

1.15

1.20


75% f i 50% f i F d D k f C fBank of Canada held rates unchanged again in May. Indeed, BoCappears to have retreated somewhat on its participation in aglobal currency war and now suggests that risks to the inflationprofile are more balanced. The April MPR noted that the �impactof the oil price shock on growth will be more front-loaded than

di d i J b l � i h Q1Source: Danske Bank Markets

USD/CAD 1M 3M 6M 12M

Forecast (pct'ile) 1.24 (58%) 1.26 (71%) 1.27 (72%) 1.25 (62%)

Fwd. / Consensus 1.24 / 1.24 1.24 / 1.26 1.24 / 1.27 1.24 / 1.27

50% confidence int. 1.21 / 1.26 1.20 / 1.27 1.18 / 1.28 1.16 / 1.29

75% confidence int. 1.20 / 1.27 1.18 / 1.30 1.15 / 1.32 1.12 / 1.36


predicted in January but not larger�, suggesting that Q1weakness was the result of transitory factors. We expect theBoC to stay on hold in the near future, waiting for the impact ofFed policy normalisation.

• Flows Speculative CAD positioning is now less tight on shorts

Conclusion. While the market retains a slight easing bias for BoCwe believe Poloz and co. are done cutting rates for now, providedthat the oil price remains above the USD60/bbl for Brent and USactivity recovers. Near term our outlook for a first Fed hike inFlows. Speculative CAD positioning is now less tight on shorts.

• Valuation. Our PPP estimate for USD/CAD is around 1.18, whileour short-term financial model points to 1.23 as �fair�.

• Commodities. Oil constitutes a substantial part of Canadianactivity and is generally high-cost; Canada thus stands to lose

September leaves room for upside to USD rates and greenbackstrength in turn. This suggests that USD/CAD should seeanother leg higher in coming months. On a 12M horizon wenevertheless project that USD/CAD will stabilise again driven byan oil recovery and the market retreating on the need for further


activity and is generally high cost; Canada thus stands to losefrom a new and lower normal level for the oil price.

• Risks. Risks to our USD/CAD forecasts are skewed to the downsideif oil prices surge again near term.

BoC easing. We have upped our near-term USD/CAD profileslightly and now see 1.26 in 3M (previously 1.24). However, wemaintain a peak at 1.27 in 6M.


Forecast: 0.76 (1M), 0.74 (3M), 0.73 (6M) and 0.73 (12M)

AUD/USD � lower still• Growth. In the past month economic data have generally

surprised to the upside. GDP figures for Q1 showed a quarterlygrowth of 0.9% (consensus 0.7%) driven by not least higher 0.95

1.00 AUD/USD

g ( ) y gexport volumes . The headline figure, however, conceals thefact that non-mining investments remain weak. The latestlabour market statistics showed a large increase inemployment, which has sent the unemployment level to thelowest level in a year albeit still at a historically high level 0 70

0.75

0.80

0.85

0.90

0.95

lowest level in a year � albeit still at a historically high level.

• Monetary policy. As expected, the Reserve Bank of Australia(RBA) kept the interest rate unchanged at 2.00% at the Junemonetary policy meeting. In the accompanied statement theboard expected a further depreciation of the AUD and stated

AUD/USD 1M 3M 6M 12M

Forecast (pct'ile) 0.76 (31%) 0.74 (24%) 0.73 (25%) 0.73 (32%)

k

0.65

0.70



board expected a further depreciation of the AUD and statedthat future monetary policy will remain data dependent.Governor Stevens has since expressed that while the RBA �isopen to the possibility of further policy easing� the board is stillconcerned about Sydney house price increases. Conclusion. Financial markets are currently confused as to

th t t f th i bi f th RBA W t RBA t


Fwd. / Consensus 0.77 / 0.77 0.77 / 0.75 0.77 / 0.74 0.76 / 0.73

50% confidence int. 0.75 / 0.79 0.74 / 0.80 0.73 / 0.81 0.71 / 0.82

75% confidence int. 0.74 / 0.80 0.72 / 0.82 0.69 / 0.84 0.65 / 0.85

• Flows. According to the latest CFTC IMM data speculativeAUD bets are close to stretched levels at the 19thpercentile. Historically, however, this has not been a barrierfor more downside unfolding.

the extent of the easing bias of the RBA. We expect RBA toleave the cash rate target unchanged in the coming 12M andindeed the recent positive data surprises have also limited theneed for further imminent easing. We do, however, still expectmore AUD/USD downside to play: the AUD still suffers from a

• Valuation. Fundamentally, the AUD is overvalued with ourPPP model estimate for AUD/USD at c.0.76.

• Commodities. Iron ore prices have partly recovered fromthe multi year record low in start-April.

/ p ysignificant terms of trade shock and with the September Fedhike looming we expect the cross to depreciate further.

We target AUD/USD at 0.76 in 1M (previously 0.78) andexpect a Fed re-pricing to drive the cross down to 0.74 (0.75)


• Risks. The AUD remains exposed to global risk sentimentand a further slowdown in China. Recently, the risk of an �ElNiño�-caused drought has increased.

in 3M. We still expect the cross to stabilise in 6-12M, when aFed hiking cycle has been priced and the �Aussie� economyrecovers. We still target the cross at 0.73 in 6M and 12M.

Kristoffer Kjær Lomholt, Analyst, [email protected], +45 45 12 85 29

�

Forecast: 0.68(1M), 0.65(3M), 0.67 (6M) and 0.70(12M)

NZD/USD �RBNZ in easing mode as �lowflation� looms• Growth. Data surprises out of New Zealand have stayed

mediocre lately but notably CPI inflation has dropped while 0.90 NZD/USD

unemployment has jumped higher. Crucially, dairy prices aresoftening yet again, putting New Zealand�s producers underpressure still. However, the sustained weakness in NZD thisyear should help exporters from here.

• Monetary policy The Reserve Bank of New Zealand (RBNZ) 0 65

0.70

0.75

0.80

0.85

Monetary policy. The Reserve Bank of New Zealand (RBNZ)surprisingly cut its official cash rate by 25bp to 3.25% at theJune meeting. The RBNZ introduced an easing bias already atthe April meeting and kept this in June stating �we expectfurther easing may be appropriate�. We expect the RBNZ todeliver one cut � likely at the September meeting - but reckon NZD/USD 1M 3M 6M 12M

k

0.55

0.60

0.65



deliver one cut � likely at the September meeting - but reckonthat general USD strength will alleviate some of the currentpressure on RBNZ in sending USD/NZD higher. Thus, theRBNZ will be done by Q4 in our view.

• Flows. NZD positioning is broadly neutral from a historical Conclusion. The significant terms-of-trade shock which NZD hasSource: Danske Bank Markets

/

Forecast (pct'ile) 0.68 (27%) 0.65 (17%) 0.67 (35%) 0.70 (58%)

Fwd. / Consensus 0.70 / 0.73 0.69 / 0.71 0.69 / 0.70 0.68 / 0.69

50% confidence int. 0.68 / 0.72 0.66 / 0.72 0.65 / 0.73 0.63 / 0.73

75% confidence int. 0.66 / 0.73 0.64 / 0.74 0.61 / 0.76 0.58 / 0.77

perspective.

• Valuation. Fundamentally, the NZD remains overvalued, withour PPP model suggesting fair value at around 0.67. Our FXshort-term financial model suggests 0.71 as fair.

suffered during the course of the past year is now feeding through to thegrowth and inflation picture for New Zealand. RBNZ is in easing modewhich will weigh on NZD near term. But with some 40bp cuts alreadypriced on RBNZ we see limited downside pressure on NZD from thisfront. But, as we see USD strength returning in the near future ahead of a

• Commodities. Dairy prices have edged lower again, which is akey worry for the agricultural sector.

• Risks. The NZD remains exposed to global risk sentiment andcommodity prices: should the former make a turn for thebetter pressure on RBNZ to cut would ease

first Fed hike in September, NZD/USD is set to move lower on a cleardivergence in monetary policy. We have lowered our near-term forecastsand now see the cross hitting 0.65 in 6M (prev. 0.69). On a 12M horizonwe do, however, expect USD strength to fade, and with upside risks toagricultural prices from a structural point of view, we expect NZD/USD


better, pressure on RBNZ to cut would ease. g p p p /to stabilise around the 0.70 mark and keep our 12M forecast unchangedat this level.


F t 57 00(1M) 60 00(3M) 63 00 (6M) d 70 00 (12M)

USD/RUB � taming the strong rouble

Forecast: 57.00(1M), 60.00(3M), 63.00 (6M) and 70.00 (12M)• Growth. According to preliminary data, Russia�s GDP shrank1.9% y/y in Q1 15, less than consensus expected (-2.6%). TheApril demand data showed that the economy is approaching thebottom and should reach it in Q2 15. The recovering oil price,floating rouble, inflation moderating, the dovish CBR, the 60

65

70

75

government bank recapitalisation programme and additionalfiscal spending should alleviate the freefall of the economy in themedium term.

• Monetary policy. On 15 June Russia�s central bank (the CBR)i k b 100b 11 5% d h

35

40

45

50

55

cut its key rate by 100bp to 11.5% as we and the consensusexpected. It continues to follow the dovish path on slower pricegrowth.

• Flows. Capital outflows in Q1 15 slowed to USD32.6bn fromUSD77 4bn a quarter earlier as we saw a reversal move into

1M 3M 6M 12M

Forecast 57.00 60.00 63.00 70.00

Fwd. / Consensus 55.61 / 54.75 56.78 / 56.04 58.43 / 56.89 61.53 / 55.25

30Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15

USD/RUB Forward Forecast

USD77.4bn a quarter earlier as we saw a reversal move intothe rouble which was previously oversold. We expect outflowsto post USD100bn in 2015.

• Valuation. USD/RUB is trading below the level we estimate tobe the equilibrium (57.8) as long as the Brent oil price stays at

• Conclusion. Looking at the average USD/RUB level and theaverage oil price within the last 30 days, the overvaluedrouble poses fiscal risks to the Russian budget. Thus,Russia�s economic authorities the Bank of Russia (CBR)


USD64/bl on average, geopolitical risk excluded. Yet, ongeopolitical escalation we saw USD/RUB going over 57.00 in asudden move within the last 30 days.

• Risks: Sudden CBR rate cuts or hikes and juggling with RUBliquidity increasing interventions; escalation of sanctions and

Russia s economic authorities - the Bank of Russia (CBR)and Finance Ministry � have been on the market buying FX�to replenish reserve funds�, but practically taming therouble�s strengthening.

• Looking ahead we expect rouble weakness to resume driven


liquidity, increasing interventions; escalation of sanctions andgrowing �fear premium�; oil-price collapse.

20

Looking ahead, we expect rouble weakness to resume, drivenby significantly higher Russian inflation than in the outsideworld and a weak macro situation.

Vladimir Miklashevsky, Economist/Trading Desk Strategist, [email protected], +358 10 546 75 22

USD/RUB � important issues to watch

• CBR�s comeback• CBR s comeback

− Remaining the best performer among 155 foreigncurrencies for spot returns against the USD YTD, theRussian rouble has entered a new zone of turbulence. Again.Returning 10 9% YTD against the USD the rouble has lostReturning 10.9% YTD against the USD, the rouble has lost6.5% within the last 30 days as news about escalatingtensions in Eastern Ukraine has started to hit the wires.

− Despite denying any currency targeting, the CBR and FinanceMinistry continue to pursue policies which weigh further onMinistry continue to pursue policies which weigh further onthe rouble. With pressure from outstanding external FXcorporate debt easing, the CBR has suspended its one year FXrepo auctions introduced in Q4 14 to address the acuteshortage of FX funding caused by financial sanctions from 20

40 Russian private sector's capital net f lows, USD bn

g g yWestern countries against Russia. In May 2015, the CBR andFinance Ministry started to buy currency to replenish FXreserves, which had dropped to levels lower than during the2009 crisis year. The CBR�s daily purchases have been

d USD150 200 hi h d � id ffi i 60

-40

-20

0

around USD150-200m, which we don�t consider sufficient ontheir own to weigh on the rouble. However, used incombination with other tools, the purchases have beencalming the rouble�s appreciation.

-100

-80

-60

Other sectors

Banks

21www.danskebank.com/CIVladimir Miklashevsky, Economist/Trading Desk Strategist, [email protected], +358 10 546 75 22

Source: Bank Rossii, Macrobond Financial, Danske Bank Markets

Forecast: 4 20 (1M) 4 20 (3M) 4 15 (6M) and 4 15 (12M)

EUR/PLN � political uncertainty biggest near-term risk

• Growth The signs that Polish growth is picking up are fairly Forecast: 4.20 (1M), 4.20 (3M), 4.15 (6M) and 4.15 (12M)Growth. The signs that Polish growth is picking up are fairlyclear on the back of the positive spill-over from monetaryeasing in the eurozone. We expect real GDP growth of2.9% in 2015 and 3.2% in 2016 and we currently believethat the risks to our forecasts are mostly on the upside.Th t s id politi l risks h r ntl ris n sh rpl in 4 20

4.40

4.60 EUR/PLN

That said, political risks have recently risen sharply inPoland and that on its own could weigh on economicgrowth.

• Monetary policy. Polish inflation continues to undershootsignificantly the central bank�s (NBP) 2 5% target and we

3.80

4.00

4.20


significantly the central bank s (NBP) 2.5% target and weare likely to see continued deflation in the coming months.That theoretically should leave some room for rate cuts,but the pick-up in Polish growth is likely to reduce thefeeling of urgency in regard to further rate cuts.


EUR/PLN 1M 3M 6M 12M

Forecast (pct'ile) 4.20 (71%) 4.20 (63%) 4.15 (51%) 4.15 (49%)

Fwd. / Consensus 4.16 / 4.08 4.17 / 4.09 4.18 / 4.10 4.22 / 4.10

50% confidence int. 4.09 / 4.21 4.05 / 4.25 4.02 / 4.29 3.99 / 4.36

75% confidence int. 4.05 / 4.27 3.98 / 4.35 3.93 / 4.44 3.85 / 4.56


• Valuation. The zloty is currently trading close to what wewould consider fair value levels.

• Risks. Currently the risk to the zloty is shifting from globalfactors � such the Russia-Ukrainian crisis � to domestic

Conclusion. We believe that the increased political uncertaintyin Poland will cause more zloty volatility in the near-term andsee a risk that EUR/PLN could inch up further in the next 1-3months. However, the zloty is supported by both a moderately


factors, as the Polish government has been significantlyweakened by the resignation of five ministers and thespeaker of the parliament.

more positive outlook for growth and the ECB�s QE programme.Combined with solid fundamentals this should support the zlotyon a 6-12 month horizon. To reflect the increased political riskin Poland we have raised our 1-3M EUR/PLN forecasts to 4.20(4.10) and our 6-12M forecasts to 4.15 (4.05).

22www.danskebank.com/CI 22

(4.10) and our 6 12M forecasts to 4.15 (4.05).

Thomas Harr, Global Head of FICC Research [email protected], +45 45 13 67 31

EUR/CZK �CNB�s EUR/CZK �floor� could come under pressure

Forecast: 27.4 (1M) 27.3 (3M), 27.2 (6M) and 27.2 (12M)• Growth. We continue to forecast 2.7% y/y GDP growth in 2015

and 3.1% y/y in 2016. We expect GDP to be supported in 2015 bystronger external demand, low oil prices and expansionary fiscalpolicy.

27.5

28.0

28.5 EUR/CZK

• Inflation. Headline CPI growth was 0.7% y/y in May, up from 0.5%y/y in April. This was 0.4 percentage points higher than expected bythe Czech central bank (CNB). However, the monetary-policyrelevant inflation, i.e. inflation adjusted for the first-round effect ofindirect taxes was lower than headline CPI (0 5% y/y in May)

26.0

26.5

27.0

Jun 14 Sep 14 Jan 15 Apr 15 Jul 15 Oct 15 Feb 16 May 16indirect taxes, was lower than headline CPI (0.5% y/y in May).Inflation is thus still below the lower boundary of the tolerance bandaround the CNB�s target.

• Monetary policy. The CNB has been trying to increase inflation bykeeping a floor under EUR/CZK at 27. We believe the CNB will

EUR/CZK 1M 3M 6M 12M

Forecast (pct'ile) 27.40 (73%) 27.30 (59%) 27.20 (53%) 27.20 (56%)

Fwd. / Consensus 27.28 / 27.44 27.28 / 27.41 27.28 / 27.32 27.28 / 27.30

50% confidence int. 27.09 / 27.41 26.92 / 27.51 26.77 / 27.58 26.57 / 27.63

75% fid i t 26 96 / 27 60 26 69 / 27 86 26 45 / 28 05 26 11 / 28 28

k



defend the floor, but there is also a risk that political pressure togive it up could mount if there are substantial inflows into the CZK.

• Valuation. From a longer-term perspective the Czech koruna issomewhat undervalued, in our view. However, this assumescontinued sub target inflation To hit the 2% inflation target the

Conclusion. Given the undervaluation of the CZK, we arelikely to see EUR/CZK move close to the 27 floor over the next


75% confidence int. 26.96 / 27.60 26.69 / 27.86 26.45 / 28.05 26.11 / 28.28

continued sub-target inflation. To hit the 2% inflation target, theCNB will have to keep the koruna undervalued, in our view.

• Risks. The biggest risk is a prolonged and significant test of theEUR/CZK floor, which could trigger a kneejerk change in monetarypolicy.

likely to see EUR/CZK move close to the 27 floor over the next12 months.

Compared to last month, we have lowered our EUR/CZKforecasts on 1M to 27.4 (27.5), 3M 27.3 (27.5), 6M 27.2(27.3) and 12M 27.2 (27.3).


p y

23Thomas Harr, Global Head of FICC Research, [email protected], +45 45 13 67 31

Forecast: 315 (1M) 315 (3M) 315 (6M) and 310 (12M)

EUR/HUF � carry keeps the forint attractive

Forecast: 315 (1M), 315 (3M), 315 (6M) and 310 (12M)• Growth. Growth has been picking up in Hungary and, after

years of stagnation, it is becoming one of the fastest-growingeconomies in central and eastern Europe. However,structural problems and weak domestic demand continue toweigh on economic activity We now estimate real GDP 310

320

330

340 EUR/HUF

weigh on economic activity. We now estimate real GDPgrowth was 4.0% in 2014 � up from 1.2% in 2013. Weexpect growth of 3.3% in 2015.

• Monetary policy. The Hungarian central bank (MNB) hasbeen cutting interest rates in small steps. This has been

280

290

300

310

Jun-14 Sep-14 Jan-15 Apr-15 Jul-15 Oct-15 Feb-16 May-16g pjustified as there is actually deflation now in Hungary(despite higher growth) and there is certainly a risk offurther deflation in coming months. This said, we expectinflation to pick up somewhat � mostly on base effects. Thislimits the scope for further rate cuts although continued

EUR/HUF 1M 3M 6M 12M

Forecast (pct'ile) 315.00 (66%) 315.00 (62%) 315.00 (63%) 310.00 (52%)

Fwd. / Consensus 312.95 / 304.33 312.96 / 305.67 312.97 / 305.17 312.99 / 313.35

50% confidence int. 307.99 / 316.97 304.43 / 319.26 301.12 / 320.78 296.73 / 322.51

75% confidence int. 304.62 / 321.21 299.24 / 326.44 294.02 / 331.06 286.62 / 336.67


limits the scope for further rate cuts, although continuedforint appreciation could reopen the door to such action.

• Valuation. The HUF has fairly attractive long-termfundamentals and the relatively large current accountsurplus is particularly helpful.

Conclusion. HUF has weakened recently on broader EURstrength and higher global yields. As a result, we have lifted ourEUR/HUF forecasts moderately. We continue to believe thatHungary�s fairly strong external position is likely to be supportive


u p u pa cu a y e p u

• Risks. Currently risks to the forint seem fairly small and well-balanced to the up and the downside.

Hungary s fairly strong external position is likely to be supportivefor the HUF in the medium term. Furthermore, fairly stronggrowth and an expected pickup in inflation are likely to keep thecarry on the forint relatively attractive. Therefore, we continueto expect medium-term appreciation of the forint.

24www.danskebank.com/CI 24Thomas Harr, Global Head of FICC Research, [email protected], +45 45 13 67 31

Forecast: 2 75 (1M) 2 80 (3M) 2 65 (6M) and 2 60 (12M)

USD/TRY � political uncertainty, but solid fundamentals

• Growth. The Turkish economy continues to expand better than Forecast: 2.75 (1M), 2.80 (3M), 2.65 (6M) and 2.60 (12M)Growth. The Turkish economy continues to expand better thanexpected, growing 2.3% y/y during Q1 15 versus 2.6% y/y aquarter earlier. Yet the path is slowing down, as the currentexpansion remains far from almost 5% y/y growth in Q1 14.Mining, quarrying and construction saw a significant drop. Weexpect the economy to grow 2 8% y/y in 2015

3.00

3.50 USD/TRY

expect the economy to grow 2.8% y/y in 2015.

• Monetary policy. The Turkish central bank has been underconsiderable political pressure to cut interest rates to revive theeconomy before the June parliamentary elections. Yet, as the liradrops further on political uncertainty the ability to cut vanishes.

2.00

2.50


75% conf int 50% conf int Forward Danske fcst Consensus fcstp p y yAll rates were kept unchanged in May, but pressure for anemergency hike may increase anytime.

• Valuation. A �fear premium� remains to be priced into TRY spot inour view due to post-elections uncertainty . However, we expect it Source: Danske Bank Markets

USD/TRY 1M 3M 6M 12M

Forecast (pct'ile) 2.75 (60%) 2.80 (70%) 2.65 (44%) 2.60 (45%)

Fwd. / Consensus 2.74 / 2.71 2.74 / 2.73 2.74 / 2.75 2.74 / 2.79

50% confidence int. 2.65 / 2.81 2.59 / 2.83 2.53 / 2.84 2.40 / 2.85

75% confidence int. 2.60 / 2.88 2.50 / 2.95 2.37 / 3.00 2.17 / 3.06


to be a short-run event. At the same time, the market will start toprice the Fed�s upcoming rate hike in the medium-term.

• Risks. Extended coalition negotiations could fuel further politicaluncertainty. The strengthening of the US dollar and a Fed rate hike

f

Conclusion. Lira sentiment has been more politically thanfundamentally driven since the beginning of 2015. As thepresident�s party has lost the majority in the parliament, it willease pressure on the central bank and in the long-run solid


are clear risks to the TRY versus the dollar, as appetite foremerging market assets is likely to decrease. A rising oil pricewould put renewed pressure on the current account. Unexpectedcentral bank rate hikes to curb inflation and support the lira wouldalso be a risk.

fundamentals will prevail in the impact on the lira. The currentaccount deficit is shrinking on the low oil price. We continue toexpect the lira to weaken in 3M, but strengthening in the longerrun. Hence, we have raised our 1-3M forecasts but lowered our6-12M forecasts.

25www.danskebank.com/CI 25

6 12M forecasts.

Vladimir Miklashevsky, Economist/Trading Desk Strategist, [email protected], +358 10 546 7522

Forecast: 6.21 (1M) 6.20 (3M), 6.18 (6M) and 6.10 (12M)

USD/CNY �Stable ahead of SDR decision this autumn • Monetary policy. The hard data in 2015 has so far been weaker

than we expected, suggesting that growth is poised to drop belowthe government�s 7% target for GDP growth in 2015. We expectgrowth to recover slightly in H2 15 on the back of monetaryeasing. We expect inflation to increase to around 2% y/y in H2from 1.2% y/y in May as the effect of the drop in the oil priceeases. The People�s Bank of China (PBoC) currently has a strongeasing bias. We expect it to cut the reserve requirement by atleast 100bp and its leading interest rates by at least another25bp.

• FX policy. In our view, PBoC is not targeting a weaker CNY tosupport growth. However, the long-term goal remains a floatingexchange rate and a convertible currency Hence interventionexchange rate and a convertible currency. Hence, interventionwill be reduced and the daily trading band gradually widenedfurther. Consequently, there will be more two-way volatility in theexchange rate in the future and it will be increasingly difficult toregard the CNY as a USD risk. We expect CNY to be included inthe SDR in connection with the IMF review of SDR weights this


the SDR in connection with the IMF review of SDR weights thisautumn but no �big bang� liberalisation of the capital accountahead of this decision.

• Valuation. Despite the appreciation of the CNY in recent years, wedo not regard it as overvalued as 1) China�s market share of global

Conclusion. It is still our view that China will not allow CNY todepreciate substantially despite data suggesting that growthcontinued to slow in early 2015. In our view, CNY remainswell supported by an increasing trade balance surplus in thewake of a sharp decline in import prices and China�s relativelyg ) g

export markets continues to improve; 2) markedly lower crude oiland commodity prices represent a substantial terms of trade gainfor China and have increased its trade surplus markedly.

• Risks. If growth slows substantially below 7%, it becomes morelik l h Chi ill i k CNY

closed capital account, which limits capital outflow. China�sambition to have CNY included in the SDR later in 2015 alsosuggests that it will behave like a responsible stakeholderahead of the IMF decision this autumn. We do not expect thedaily trading band to be widened until after the IMF decision.


likely that China will start targeting a weaker CNY to supportgrowth. In the medium term, gradual liberalisation of the capitalaccount will probably also be negative for CNY.

26

y gWe still expect a moderate appreciation of CNY within thecurrent trading band but a generally stronger USD limits theappreciation potential in the short run.

Flemming Jegbjærg Nielsen, Senior Analyst, [email protected], +45 45 12 85 35

Danske Bank Markets FX forecasts vs EUR and USD

Spot +1m +3m +6m +12m +1m +3m +6m +12mForecast Forecast vs forward outright, %

Exchange rates vs EURUSD 1.121 1.10 1.04 1.06 1.10 -1.9 -7.3 -5.7 -2.6JPY 138.5 135 130 134 140 -2.3 -6.1 -3.5 1.0GBP 0.723 0.72 0.70 0.70 0.71 -0.5 -3.4 -3.6 -2.7CHF 1.050 1.04 1.04 1.05 1.10 -0.9 -0.7 0.5 5.9

DKK 7.4600 7.4610 7.4550 7.4550 7.4550 0.0 0.1 0.1 0.3NOK 8.73 8.60 8.45 8.25 8.15 -1.6 -3.5 -6.1 -7.8SEK 9.17 9.30 9.30 9.20 9.00 1.4 1.4 0.4 -1.7

Exchange rates vs USDJPY 123.5 123 125 126 127 -0.4 1.3 2.3 3.7GBP 1.55 1.53 1.49 1.51 1.55 -1.4 -4.1 -2.2 0.0CHF 0.94 0.95 1.00 0.99 1.00 1.1 7.1 6.6 8.7

DKK 6.65 6.78 7.17 7.03 6.78 2.0 8.0 6.2 3.0NOK 7.78 7.82 8.13 7.78 7.41 0.4 4.1 -0.4 -5.3SEK 8.18 8.45 8.94 8.68 8.18 3.4 9.5 6.5 0.9

CAD 1 24 1 24 1 26 1 27 1 25 0 3 1 8 2 5 0 8CAD 1.24 1.24 1.26 1.27 1.25 0.3 1.8 2.5 0.8AUD 0.77 0.76 0.74 0.73 0.73 -1.7 -3.9 -4.8 -4.0NZD 0.70 0.68 0.65 0.67 0.70 -2.3 -6.1 -2.6 3.1

RUB 54.80 57.00 60.00 63.00 70.00 2.9 6.1 8.2 14.2CNY 6 21 6 21 6 20 6 18 6 10 -0 2 -0 7 -1 5 -3 7



CNY 6.21 6.21 6.20 6.18 6.10 0.2 0.7 1.5 3.7Note: GBP, AUD and NZD are denominated in local currency rather than USD

Danske Bank Markets FX forecasts vs DKK

S t +1 +3 +6 +12 +1 +3 +6 +12Forecast Forecast vs forward outright, %

Spot +1m +3m +6m +12m +1m +3m +6m +12mExchange rates vs DKKEUR 7.4600 7.4610 7.4550 7.4550 7.4550 0.0 0.1 0.1 0.3USD 6.65 6.78 7.17 7.03 6.78 2.0 8.0 6.2 3.0JPY 5.39 5.51 5.73 5.58 5.34 2.4 6.6 3.8 -0.7GBP 10 32 10 36 10 65 10 65 10 50 0 5 3 6 3 9 3 0GBP 10.32 10.36 10.65 10.65 10.50 0.5 3.6 3.9 3.0CHF 7.11 7.17 7.17 7.10 6.78 0.9 0.8 -0.4 -5.3

NOK 0.86 0.87 0.88 0.90 0.91 1.6 3.7 6.6 8.7SEK 0.81 0.80 0.80 0.81 0.83 -1.3 -1.3 -0.2 2.0

CAD 5.39 5.47 5.69 5.54 5.42 1.7 6.0 3.6 2.1AUD 5.15 5.15 5.30 5.13 4.95 0.3 3.7 1.1 -1.2NZD 4.65 4.61 4.66 4.71 4.74 -0.4 1.4 3.5 6.1

PLN 1 80 1 78 1 78 1 80 1 80 0 9 0 6 1 1 2 2PLN 1.80 1.78 1.78 1.80 1.80 -0.9 -0.6 1.1 2.2CZK 0.27 0.27 0.27 0.27 0.27 -0.4 0.0 0.4 0.5HUF 0.24 0.24 0.24 0.24 0.24 -0.5 -0.3 0.0 2.4RUB 0.12 0.12 0.12 0.11 0.10 -0.9 1.9 -1.6 -9.8

CNY 1 07 1 09 1 16 1 14 1 11 2 2 8 7 7 8 7 0


CNY 1.07 1.09 1.16 1.14 1.11 2.2 8.7 7.8 7.0


Danske Bank Markets FX forecasts vs SEK


Spot +1m +3m +6m +12m +1m +3m +6m +12mExchange rates vs SEKEUR 9.17 9.30 9.30 9.20 9.00 1.4 1.4 0.4 -1.7USD 8.18 8.45 8.94 8.68 8.18 3.4 9.5 6.5 0.9JPY 6.63 6.87 7.15 6.89 6.44 3.7 8.0 4.1 -2.7GBP 12 69 12 92 13 29 13 14 12 68 1 9 5 0 4 1 1 0GBP 12.69 12.92 13.29 13.14 12.68 1.9 5.0 4.1 1.0CHF 8.74 8.94 8.94 8.76 8.18 2.3 2.2 -0.1 -7.2

NOK 1.05 1.08 1.10 1.12 1.10 3.0 5.1 6.9 6.5DKK 1.23 1.25 1.25 1.23 1.21 1.3 1.4 0.2 -2.0

CAD 6.62 6.82 7.10 6.83 6.55 3.0 7.5 3.8 0.1AUD 6.34 6.43 6.62 6.34 5.97 1.6 5.2 1.4 -3.2NZD 5.71 5.75 5.81 5.82 5.73 1.0 2.7 3.8 4.0

PLN 2 21 2 21 2 21 2 22 2 17 0 4 0 7 1 3 0 1PLN 2.21 2.21 2.21 2.22 2.17 0.4 0.7 1.3 0.1CZK 0.34 0.34 0.34 0.34 0.33 0.9 1.3 0.7 -1.5HUF 0.29 0.30 0.30 0.29 0.29 0.8 1.0 0.3 0.4RUB 0.15 0.15 0.15 0.14 0.12 0.4 3.3 -1.3 -11.6

CNY 1 32 1 36 1 44 1 40 1 34 3 5 10 2 8 1 4 8


CNY 1.32 1.36 1.44 1.40 1.34 3.5 10.2 8.1 4.8


Danske Bank Markets FX forecasts vs NOK


Spot +1m +3m +6m +12m +1m +3m +6m +12mExchange rates vs NOKEUR 8.73 8.60 8.45 8.25 8.15 -1.6 -3.5 -6.1 -7.8USD 7.78 7.82 8.13 7.78 7.41 0.4 4.1 -0.4 -5.3JPY 6.30 6.36 6.50 6.18 5.83 0.7 2.8 -2.6 -8.7GBP 12 07 11 94 12 07 11 79 11 48 -1 1 -0 1 -2 6 -5 2GBP 12.07 11.94 12.07 11.79 11.48 1.1 0.1 2.6 5.2CHF 8.31 8.27 8.13 7.86 7.41 -0.7 -2.8 -6.6 -12.9

SEK 0.95 0.92 0.91 0.90 0.91 -2.9 -4.9 -6.4 -6.1DKK 1.17 1.15 1.13 1.11 1.09 -1.6 -3.6 -6.2 -8.0

CAD 6.30 6.30 6.45 6.13 5.93 0.1 2.3 -2.9 -6.1AUD 6.03 5.94 6.01 5.68 5.41 -1.3 0.1 -5.2 -9.1NZD 5.43 5.32 5.28 5.21 5.19 -2.0 -2.2 -2.9 -2.4

PLN 2.10 2.05 2.01 1.99 1.96 -2.5 -4.1 -5.2 -6.0CZK 0.32 0.31 0.31 0.30 0.30 -2.0 -3.6 -5.8 -7.6HUF 0.28 0.27 0.27 0.26 0.26 -2.1 -3.9 -6.2 -5.8RUB 0.14 0.14 0.14 0.12 0.11 -2.5 -1.7 -7.7 -17.1

CNY 1.25 1.26 1.31 1.26 1.21 0.5 4.9 1.1 -1.6



Danske Bank EMEA FX forecasts

Danske Forward Danske Forward Danske Forward Danske Forward Danske ForwardEUR USD DKK SEK NOK

Danske Forward Danske Forward Danske Forward Danske Forward Danske ForwardPLN 15-Jun-15 4.16 3.71 180 221 210

+1M 4.20 4.16 3.82 3.71 178 179 221 220 205 210+3M 4.20 4.17 4.04 3.72 178 179 221 220 201 210+6M 4.15 4.19 3.92 3.73 180 178 222 219 199 210

+12M 4 15 4 23 3 77 3 74 180 176 217 217 196 209+12M 4.15 4.23 3.77 3.74 180 176 217 217 196 209HUF 15-Jun-15 313 279 23.8 2.93 2.79

+1M 315 313 286 279 23.7 23.8 2.95 2.93 2.73 2.79+3M 315 314 303 280 23.7 23.7 2.95 2.92 2.68 2.79+6M 315 315 297 280 23.7 23.7 2.92 2.91 2.62 2.7912M 310 317 282 280 24 0 23 5 2 90 2 89 2 63 2 79+12M 310 317 282 280 24.0 23.5 2.90 2.89 2.63 2.79

CZK 15-Jun-15 27.3 24.3 27.3 33.6 32.0+1M 27.4 27.3 24.9 24.3 27.2 27.3 33.9 33.6 31.4 32.0+3M 27.3 27.3 26.3 24.3 27.3 27.3 34.1 33.6 31.0 32.1+6M 27.2 27.3 25.7 24.3 27.4 27.3 33.8 33.6 30.3 32.2

+12M 27.2 27.3 24.7 24.1 27.4 27.3 33.1 33.6 30.0 32.4RUB 15-Jun-15 61.4 54.8 12.2 14.9 14.2

+1M 62.7 62.1 57.0 55.4 11.9 12.0 14.8 14.8 13.7 14.1+3M 62.4 63.6 60.0 56.6 11.9 11.7 14.9 14.4 13.5 13.8+6M 66.8 65.6 63.0 58.2 11.2 11.3 13.8 14.0 12.4 13.4

+12M 77.0 69.2 70.0 61.3 9.7 10.7 11.7 13.2 10.6 12.8TRY 15-Jun-15 3.07 2.74 243 299 284

+1M 3.03 3.10 2.75 2.76 247 240 307 296 284 281+3M 2.91 3.16 2.80 2.81 256 236 319 290 290 277+6M 2.81 3.24 2.65 2.89 265 229 328 282 294 271



+12M 2.86 3.42 2.60 3.02 261 218 315 268 285 259

Disclosures

This research report has been prepared by Danske Bank Markets, a division of Danske Bank A/S (�Danske Bank�). The authors of this research report are Thomas Harr (Chief Analyst), p p p y / ( ) p ( y )Stefan Mellin (Senior Analyst), Christin Tuxen (Senior Analyst), Morten Helt (Senior Analyst), Jens Naervig Pedersen (Analyst), Lars Christensen (Chief Analyst), Kristoffer Lomholt (Analyst), and Vladimir Miklashevsky (Analyst).

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FX Forecast Update - Danske Bank · Forecast: 9.30 (1M), 9.30 (3M), 9.20 (6M), 9.00 (12M) EUR/SEK...

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Transcript of FX Forecast Update - Danske Bank · Forecast: 9.30 (1M), 9.30 (3M), 9.20 (6M), 9.00 (12M) EUR/SEK...