Yen May Overtake CHF

Despite the headline-grabbing credit downgrade of the US rating, the USD continues to find support during market sell-offs. The fundamental rationale is always attributed to recurring problems in Europe during risk aversion, but quickly switches over to US rates will remain low for some time whenever risk appetite is on the rise. Gold, silver and the Japanese yen remain the consistent winners, alongside the Swiss franc. But the latter will encounter much volatility, in which case JPY is to regain its safehaven luster. Over the past 1-month & 3 months, JPY is outperforming CHF vs most currencies. Wednesday's Premium trades focused on shorting GBP based on our expectations that the BoE minutes would show a dovish surprise. We issued calls on shorting GBPUSD and GBPJPY, all of which hit the targets. Our long EURUSD call was stopped out by 6 pips. Our long in S&P futures issued last night hit the 1207 target, while silver & gold calls remain in progress.

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Ashraf