The latest weekly update from Morgan Stanley
On the ECB:
"ECB to remain dovish for now. We think that Draghi did little today to provide markets with more guidance on whether the ECB is looking to remove monetary accommodation at the end of this year. The only policy that was concrete was no longer having the TLTRO facility for banks. Many years ago that would have suggested that money supply growth would have slowed, thus strengthening the EUR; however, today the policy was likely removed because of the lack of take-up by banks for business lending. On the dovish side was the stance towards underlying inflation. Draghi said that there are no signs yet of a convincing upward trend in underlying inflation, and that the upward revisions to headline inflation were due to higher energy prices. Core inflation releases will become closer market focus than the headline. Overall we still like to sell the rally in EURUSD, with the Fed meeting becoming the next near-term driver for the pair."
Morgan Stanley are holding the following trades, among others;
EURGBP short at 0.8480 TP 0.8000 SL 0.8800
EURUSD short at 1.0650 TP 0.9900 SL 1.0850
AUDUSD short at 0.7540 TP 0.6900 SL 0.7800
Here's their view of 5 currencies;
Morgan Stanley's currency review
