Morgan Stanley bullish EUR, CHF, GBP & bearish AUD and CAD

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We underline our bullish calls for the EUR and CHF based on our assessment of the capability of European financial institutions exporting capital.

The SNB's continued intervention adds to EUR support,explaining why downbeat EMU inflation data had a very limited impact on the EUR.

Our bullish GBP case is more of tactical nature based on better UK data readings. Upcoming PMI data should show a bounce back. Overnight saw UK August consumer confidence bouncing back from -12to -7.

Against long EUR, CHF and GBP positions we trade KRW, AUD and CAD shorts. Copper prices easing back to June levels and iron ore rolling over will support these trades too.

In its strategic portfolio, Morgan Stanley maintains a limit order to buy EUR/AUD*, and as its trade of the week, MS recommends buying EUR/CAD.


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