Norwegian growth data has surprised substantially on the upside over the past few months, suggesting that the economy is gaining speed supported by a tight labour market and rising house prices.
The SEK is the only G10 currency that has lost versus the euro YTD.
Danske Bank's DKK Exchange Market Pressure Index (EMPI) indicates that the depreciation pressure on the DKK registered in March to May has abated and is currently in neutral territory.
Monetary policy divergence and portfolio flows set to drive the EUR/USD.
Despite recent softness in UK data, notably in the manufacturing sector, we expect the UK recovery to remain on track in H2.
We have also kept our medium-term targets for the USD/JPY unchanged as we still expect the cross to trade higher in the coming 6 to 12 months primarily supported by relative rates between Japan and the US.
We expect the RBA to remain sidelined for the remainder of 2014.
The significantly less hawkish tone of the RBNZ at the July meeting has reduced the upside potential in the NZD/USD.
We do not change our view on EUR/RUB and expect moderate and continuing weakening of the Russian currency from current levels.
The re-escalation of the Ukrainian crisis is clearly negative for the CEE countries, especially in the short term.
To Read the Entire Report Please Click on the pdf File Below