Shorting The EUR Is Like Owning Fools Gold
What a shift of opinion in such a short time 
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Just when you thought it was safe to go out and sell that 17-member single currency, all things turn pear-shape for the remaining ‘bear’ as the EUR takes on a new big figure level with gusto, touching $1.31 for the first time since mid of last-month. Investors to date have diligently been pairing back their anti-EUR position, ever since Governor Kuroda from the Bank of Japan announced his aggressive new easing intentions last week. Japan’s surprise policy shift has raised expectations that real money investors will continue to pull money out of Japan and go Euro asset bargain hunting. The diligent single currency bull is trying to stay ahead of the heard. The currency has not yet broken the back of the 2-month bear trend, but its close!
The significance of the Yen move is not lost on the average Japanese investor. The euphoria over Japan’s aggressive easing measure remains very much intact. The relationship between both equities and the currency value is important – a weaker Yen remains a key “wealth creation mechanism.” Governor Kuroda’s new stimulus package has certainly supported domestic equities over the past few sessions, but even with the run, the Nikkei continues to lag the US’s S&P performance over the past three-years. The market is know beginning to comprehend that to erase some of this equity gap will require USD/JPY to be trading in the 108-115 currency range – a minimum target that is very doable in the medium term.
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