We launch Danske Bank’s FX Trading Portfolio, which will include all our directional FX trade recommendations focusing on our footprint markets in Scandinavia, EMEA and G10.
The FX Trading Portfolio is aimed at leveraged funds, currency overlay managers and trading corporates. The portfolio will showcase our strategic FX views but the timing of trade recommendations is 100% discretionary.
We currently have one live trading recommendation: short EUR/USD, target 1.25, stop-loss 1.30.
Introducing Danske Bank’s FX Trading Portfolio
We launch Danske Bank’s FX Trading Portfolio. The FX Trading Portfolio will include all our spot and outright FX trading recommendations with special focus on our footprint currencies in Scandinavia, EMEA and G10. The portfolio is aimed at leveraged funds, currency overlay managers and trading corporates. Every research piece where we introduce a new trade will include an entry, target and stop-loss level and a list of closed and open trades. All trades that are closed before a target or stop-loss have been reached or where we change the target or stop-loss level will be published.
The trade recommendations in the FX Trading Portfolio will showcase our strategic FX views but the timing of trade recommendations is 100% discretionary. Specifically, trades will be evaluated on the following criteria: 1) fundamentals (growth, inflation/monetary policy and external balances; 2) valuation; 3) positioning; 4) technicals; and 5) risk appetite. While it is not a criteria in itself that trades must fulfil all of the above, we will consistently consult this framework when evaluating new and existing trading recommendations in the portfolio.
The FX Trading Portfolio incorporates our existing open trade recommendations that have not been closed prior to this publication. Hence, we book a profit of 7.02% on our long GBP/JPY trade recommendation, which hit the target of 180 on 19 September. We maintain our short EUR/USD trade recommendation, at a target of 1.25, where we lower our stop-loss level to 1.30 from 1.35. To be short EUR/USD is the biggest consensus macro trade but it is still right. The USD’s role as an asset currency is increasing as the US simply delivers higher expected returns regardless of whether one invests in equities, fixed income or real estate. We favour expressing our bullish USD view versus EUR as FX hedging flows on the back of ECB easing will weaken the common currency.
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